Azenta, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 48 Consolidated Balance Sheets as of September 30, 2024 and 2023 51 Consolidated Statements of Operations for the years ended September 30, 2024, 2023 and 2022 52 Consolidated Statements of Comprehensive Income (Loss) for the years ended September 30, 2024, 2023 and 2022 53 Consolidated Statements of Cash Flows for the years ended September 30, 2024, 2023 and 2022 54 Consolidated Statements of Changes in Stockholders’ Equity for the years ended September 30, 2024, 2023 and 2022 55 Notes to Consolidated Financial Statements 56 47 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Azenta, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Azenta, Inc. and its subsidiaries (the "Company") as of September 30, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income (loss), of changes in stockholders’ equity and of cash flows for each of the three years in the period ended September 30, 2024, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because a material weakness in internal control over financial reporting existed as of that date as the Company did not design and maintain effective controls related to the review of the statement of cash flows. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness referred to above is described in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. We considered this material weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management's report referred to above. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 48 Table of Contents Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill Impairment Interim Assessments - B Medical Systems Reporting Unit As described in Notes 2 and 8 to the consolidated financial statements, the Company’s consolidated goodwill balance was $691.4 million as of September 30, 2024, and the goodwill associated with the B Medical Systems reporting unit was zero. Goodwill is tested for impairment annually or more often if impairment indicators are present at the reporting unit level. An impairment loss is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. Changes to the Company’s operating segments effective October 1, 2023 resulted in a change to the Company’s reporting units, which are aligned to the Company’s operating and reportable segments. Management tested its reporting units for potential impairment immediately before and after the segment realignment and concluded that the estimated fair value of each reporting unit exceeded its respective carrying value. The B Medical Systems reportable segment was allocated $109 million of goodwill as of October 1, 2023. During the second quarter of fiscal year 2024, the Company concluded it was more likely than not the fair value of the Company’s B Medical Systems segment was less than its carrying amount and completed a quantitative goodwill impairment test. The results of the Company’s quantitative goodwill impairment analyses as of March 31, 2024 indicated an impairment of all of the goodwill allocated within its B Medical Systems reporting unit. The estimated fair value of the reporting unit was derived using the income approach, specifically the discounted cash flow method and reflect management’s assumptions regarding revenue growth rates, forecast gross profit margins, operating expenses, capital expenditures, discount rates, terminal period growth rates, economic and market trends, and other expectations about the anticipated operating results of its reporting units. 49 Table of Contents The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessments of the B Medical Systems reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the B Medical Systems reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, forecast gross profit margins, operating expenses, discount rates, and terminal period growth rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the B Medical Systems reporting unit. These procedures also included, among others (i) testing management’s process for developing the fair value estimates of the B Medical Systems reporting unit; (ii) evaluating the appropriateness of the discounted cash flow method used by management; (iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow method; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, forecast gross profit margins, operating expenses, discount rates, and terminal period growth rates. Evaluating management’s assumptions related to revenue growth rates, forecast gross profit margins, operating expenses, and terminal period growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the B Medical Systems reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow method and (ii) the reasonableness of the assumptions related to the discount rates and terminal period growth rates. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts November 26, 2024 We have served as the Company’s auditor since 2016. 50 Table of Contents AZENTA, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) September 30, September 30, 2024 2023 Assets Current assets Cash and cash equivalents $ 310,929 $ 678,910 Short-term marketable securities 151,162 338,873 Accounts receivable, net of allowance for expected credit losses ($ 6,558 and $ 8,057 , respectively) 172,711 156,535 Inventories 115,256 128,198 Derivative asset — 13,036 Short-term restricted cash 2,069 4,650 Prepaid expenses and other current assets 80,680 98,754 Total current assets 832,807 1,418,956 Property, plant and equipment, net 202,654 205,744 Long-term marketable securities 49,454 111,338 Long-term deferred tax assets 837 571 Operating lease right-of-use assets 63,992 66,580 Goodwill 691,409 784,339 Intangible assets, net 248,030 294,301 Other assets 10,858 3,891 Total assets $ 2,100,041 $ 2,885,720 Liabilities and stockholders' equity Current liabilities Accounts payable $ 44,433 $ 35,796 Deferred revenue 31,978 34,614 Accrued warranty and retrofit costs 10,129 10,223 Accrued compensation and benefits 30,713 33,911 Accrued customer deposits 22,324 17,707 Accrued VAT payable 106 20,595 Accrued income taxes payable 13,278 7,378 Accrued expenses and other current liabilities 51,878 50,704 Total current liabilities 204,839 210,928 Long-term tax reserves 398 380 Long-term deferred tax liabilities 54,177 67,301 Long-term operating lease liabilities 58,792 60,436 Other long-term liabilities 12,868 12,175 Total liabilities 331,074 351,220 Stockholders' equity Preferred stock, $ 0.01 par value - 1,000,000 shares authorized, no shares issued or outstanding — — Common stock, $ 0.01 par value - 125,000,000 shares authorized, 59,031,953 shares issued and 45,570,084 shares outstanding at September 30, 2024, 71,294,247 shares issued and 57,832,378 shares outstanding at September 30, 2023 590 713 Additional paid-in capital 505,958 1,156,160 Accumulated other comprehensive loss ( 13,464 ) ( 62,426 ) Treasury stock, at cost - 13,461,869 shares at September 30, 2024 and September 30, 2023 ( 200,956 ) ( 200,956 ) Retained earnings 1,476,839 1,641,009 Total stockholders' equity 1,768,967 2,534,500 Total liabilities and stockholders' equity $ 2,100,041 $ 2,885,720 The accompanying notes are an integral part of these consolidated financial statements. 51 Table of Contents AZENTA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Year Ended September 30, 2024 2023 2022 Revenue Products $ 243,407 $ 277,191 $ 180,950 Services 412,916 387,881 374,548 Total revenue 656,323 665,072 555,498 Cost of revenue Products 170,094 186,090 100,044 Services 222,862 215,842 199,870 Total cost of revenue 392,956 401,932 299,914 Gross profit 263,367 263,140 255,584 Operating expenses Research and development 33,525 33,956 27,542 Selling, general and administrative 302,737 316,282 251,465 Impairment of goodwill and intangible assets 115,975 — — Contingent consideration - fair value adjustments — ( 18,549 ) 600 Restructuring charges 11,808 4,577 712 Total operating expenses 464,045 336,266 280,319 Operating loss ( 200,678 ) ( 73,126 ) ( 24,735 ) Other income (expense) Interest income, net 33,177 43,735 15,697 Other income (expense), net 178 ( 1,042 ) ( 898 ) Loss before income taxes ( 167,323 ) ( 30,433 ) ( 9,936 ) Income tax (benefit) expense ( 3,153 ) ( 17,550 ) 1,350 Loss from continuing operations ( 164,170 ) ( 12,883 ) ( 11,286 ) Income (loss) from discontinued operations, net of tax — ( 1,374 ) 2,144,145 Net (loss) income $ ( 164,170 ) $ ( 14,257 ) $ 2,132,859 Basic net (loss) income per share: Loss from continuing operations $ ( 3.09 ) $ ( 0.19 ) $ ( 0.15 ) (Loss) income from discontinued operations, net of tax — ( 0.02 ) 28.63 Net (loss) income per share $ ( 3.09 ) $ ( 0.22 ) $ 28.48 Diluted net (loss) income per share: Loss from continuing operations $ ( 3.09 ) $ ( 0.19 ) $ ( 0.15 ) (Loss) income from discontinued operations, net of tax — ( 0.02 ) 28.63 Diluted net (loss) income per share $ ( 3.09 ) $ ( 0.22 ) $ 28.48 Weighted average shares used in computing net income (loss) per share: Basic 53,175 66,253 74,897 Diluted 53,175 66,253 74,897 The accompanying notes are an integral part of these consolidated financial statements. 52 Table of Contents AZENTA, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Year Ended September 30, 2024 2023 2022 Net (loss) income $ ( 164,170 ) $ ( 14,257 ) $ 2,132,859 Other comprehensive income (loss), net of tax: Foreign currency translation reclassification adjustments included in income from discontinued operations (Note 2) — — ( 16,567 ) Net investment hedge currency translation adjustment, net of tax effects of $ 3,541 , $( 21,228 ), and $ 31,769 for the fiscal years 2024, 2023, and 2022 respectively ( 10,019 ) ( 61,533 ) 93,020 Foreign currency translation adjustments 54,278 77,246 ( 169,266 ) Changes in unrealized losses on marketable securities, net of tax effects of $( 1,667 ), $ 1,992 , and $( 3,729 ) for the fiscal years 2024, 2023, and 2022 respectively 4,872 5,774 ( 10,908 ) Actuarial gain (loss) on pension plans, net of tax effects of $ 57 , $( 1 ), and $( 121 ) for the fiscal years 2024, 2023, and 2022, respectively ( 169 ) 3 454 Total other comprehensive income (loss), net of tax 48,962 21,490 ( 103,267 ) Comprehensive (loss) income $ ( 115,208 ) $ 7,233 $ 2,029,592 The accompanying notes are an integral part of these consolidated financial statements. 53 Table of Contents AZENTA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended September 30, 2024 2023 2022 Cash flows from operating activities Net (loss) income $ ( 164,170 ) $ ( 14,257 ) $ 2,132,859 Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Depreciation and amortization 90,744 85,584 53,702 Impairment of goodwill and intangible assets 115,975 — — Property, plant and equipment and other asset write-offs 4,430 — — Inventory write-downs 3,290 — — Other non-cash charges related to restructuring and transformation 4,317 — — Stock-based compensation 14,467 9,376 10,666 Contingent consideration adjustment — ( 18,549 ) 600 Amortization and accretion on marketable securities ( 6,032 ) ( 7,870 ) ( 1,894 ) Deferred income taxes ( 16,072 ) ( 28,654 ) 24,469 Loss on extinguishment of debt — — 632 Purchase accounting impact on inventory — 9,664 — Loss (gain) on disposals of property, plant and equipment 296 43 ( 21 ) Gain on divestiture, net of tax — — ( 2,130,265 ) Fees paid stemming from divestiture — — ( 52,461 ) Taxes paid stemming from divestiture — — ( 431,600 ) Changes in operating assets and liabilities: Accounts receivable ( 11,589 ) 33,992 ( 31,397 ) Inventories 16,350 8,253 ( 66,629 ) Accounts payable 9,196 ( 14,710 ) ( 3,926 ) Deferred revenue ( 3,558 ) ( 7,564 ) 16,599 Accrued warranty and retrofit costs ( 684 ) 4,560 303 Accrued compensation and tax withholdings ( 4,184 ) ( 19,055 ) 11,404 Other assets and liabilities ( 2,487 ) ( 33,655 ) 913 Net cash provided by (used in) operating activities 50,289 7,158 ( 466,046 ) Cash flows from investing activities Purchases of property, plant and equipment ( 37,392 ) ( 39,436 ) ( 73,435 ) Purchases of technology intangibles — — ( 4,000 ) Purchases of marketable securities and other investments ( 405,575 ) ( 236,194 ) ( 1,975,599 ) Sales and maturities of marketable securities 666,230 1,064,209 705,384 Proceeds from divestiture, net of cash transferred — — 2,939,116 Net investment hedge settlement 1,476 29,313 — Acquisitions, net of cash acquired — ( 386,508 ) ( 125,876 ) Net cash provided by investing activities 224,739 431,384 1,465,590 Cash flows from financing activities Proceeds from issuance of common stock 3,279 3,621 5,245 Principal payments on debt — — ( 49,725 ) Payments of finance leases ( 783 ) ( 578 ) ( 388 ) Payment for contingent consideration related to acquisition — — ( 10,400 ) Withholding tax payments on net share settlements on equity awards — ( 4,988 ) — Share repurchases ( 661,703 ) ( 838,514 ) — Common stock dividends — — ( 7,494 ) Net cash used in financing activities ( 659,207 ) ( 840,459 ) ( 62,762 ) Effects of exchange rate changes on cash and cash equivalents 21,124 44,666 ( 180,819 ) Net (decrease) increase in cash, cash equivalents and restricted cash ( 363,055 ) ( 357,251 ) 755,963 Cash, cash equivalents and restricted cash, beginning of period 684,045 1,041,296 285,333 Cash, cash equivalents and restricted cash, end of period $ 320,990 $ 684,045 $ 1,041,296 Supplemental disclosures: Cash paid for interest $ — $ — $ 469 Cash paid for income taxes, net 2,704 43,073 452,461 Purchases of property, plant and equipment included in accounts payable and accrued expenses 2,767 2,725 10,196 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets Cash and cash equivalents of continuing operations 310,929 $ 678,910 $ 658,274 Short-term restricted cash included in prepaid expenses and other current assets 2,069 4,650 382,596 Long-term restricted cash included in other assets 7,992 485 426 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 320,990 $ 684,045 $ 1,041,296 The accompanying notes are an integral part of these consolidated financial statements. 54 Table of Contents AZENTA, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (In thousands, except share and per share data) Common Accumulated Common Stock at Additional Other Total Stock Par Paid-In Comprehensive Retained Treasury Stockholders’ Shares Value Capital Income (Loss) Earnings Stock Equity Balance September 30, 2021 87,808,922 $ 878 $ 1,976,112 $ 19,351 $ ( 470,051 ) $ ( 200,956 ) $ 1,325,334 Shares issued under restricted stock and purchase plans, net of shares withheld for employee taxes 673,203 7 5,239 — — — 5,246 Stock-based compensation — — 10,666 — — — 10,666 Common stock dividends declared, at $ 0.10 per share — — — — ( 7,494 ) — ( 7,494 ) Unrealized gain on derivative asset, net of tax — — — 93,020 — — 93,020 Foreign currency translation adjustments reclassed out of accumulated other comprehensive income related to discontinued operations — — — ( 16,567 ) — — ( 16,567 ) Foreign currency translation adjustments — — — ( 169,266 ) — — ( 169,266 ) Changes in unrealized losses on marketable securities, net of tax — — — ( 10,908 ) — — ( 10,908 ) Actuarial gain on pension plans, net of tax — — — 454 — — 454 Net income — — — — 2,132,859 — 2,132,859 Other — — — — 42 — 42 Balance September 30, 2022 88,482,125 $ 885 $ 1,992,017 $ ( 83,916 ) $ 1,655,356 $ ( 200,956 ) $ 3,363,386 Shares issued under restricted stock and purchase plans, net of shares withheld for employee taxes 267,133 3 ( 1,371 ) — — — ( 1,368 ) Accelerated share repurchase ( 10,072,055 ) — — — — ( 501,637 ) ( 501,637 ) Open market repurchases ( 7,382,956 ) — — — — ( 342,400 ) ( 342,400 ) Retirement of treasury shares — ( 175 ) ( 843,862 ) — — 844,037 — Stock-based compensation — — 9,376 — — — 9,376 Net investment hedge currency translation adjustment, net of tax — — — ( 61,533 ) — — ( 61,533 ) Foreign currency translation adjustments — — — 77,246 — — 77,246 Changes in unrealized losses on marketable securities, net of tax — — — 5,774 — — 5,774 Net loss — — — — ( 14,257 ) — ( 14,257 ) Actuarial gain on pension plans, net of tax — — — 3 — — 3 Other — — — — ( 90 ) — ( 90 ) Balance September 30, 2023 71,294,247 $ 713 $ 1,156,160 $ ( 62,426 ) $ 1,641,009 $ ( 200,956 ) $ 2,534,500 Shares issued under restricted stock and purchase plans, net of shares withheld for employee taxes 255,683 3 3,277 — — — 3,280 Open market repurchases ( 12,517,977 ) ( 103 ) — — — ( 667,969 ) ( 668,072 ) Retirement of treasury shares — ( 23 ) ( 667,946 ) — — 667,969 — Stock-based compensation — — 14,467 — — — 14,467 Net investment hedge currency translation adjustment, net of tax — — — ( 10,019 ) — — ( 10,019 ) Foreign currency translation adjustments — — — 54,278 — — 54,278 Changes in unrealized losses on marketable securities, net of tax — — — 4,872 — — 4,872 Net loss — — — — ( 164,170 ) — ( 164,170 ) Actuarial loss on pension plans, net of tax — — — ( 169 ) — — ( 169 ) Balance September 30, 2024 59,031,953 $ 590 $ 505,958 $ ( 13,464 ) $ 1,476,839 $ ( 200,956 ) $ 1,768,967 The accompanying notes are an integral part of these consolidated financial statements. 55 Table of Contents AZENTA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Operations Azenta, Inc. (“Azenta”, or the “Company”) is a leading global provider of biological and chemical compound sample exploration and management solutions for the life sciences industry. The Company entered the life sciences market in 2011, leveraging its in-house precision automation and cryogenics capabilities that it was then applying in the semiconductor manufacturing market. This led the Company to develop and provide solutions for automated ultra-cold storage. Since then, the Company has expanded its life sciences offerings through internal investments and through a series of acquisitions. The Company now supports its customers from research and clinical development to commercialization with its sample management, automated storage, vaccine cold storage and transport, as well as genomic services expertise to help its customers bring impactful and breakthrough therapies to market faster. The Company understands the importance of sample integrity and offers a broad portfolio of products and services supporting customers at every stage of the life cycle of samples, including procurement, automated storage systems, genomic services and a multitude of sample consumables, informatics and data software, along with sample repository services. The Company's expertise, global footprint, and leadership positions enable it to be a trusted global partner to pharmaceutical, biotechnology, and life sciences research institutions. Discontinued Operations In the fourth quarter of fiscal year 2021, the Company entered into a definitive agreement to sell its semiconductor automation business to Thomas H. Lee Partners, L.P. (“THL”). The Company determined that the semiconductor automation business met the “held for sale” criteria and the “discontinued operations” criteria in accordance with Financial Accounting Standard Boards (“FASB”) Accounting Standards Codification (“ASC”) 205, Presentation of Financial Statements , (“FASB ASC 205” ) as of September 30, 2021. Please refer to Note 3, Discontinued Operations for further information about the discontinued businesses. The Consolidated Financial Statements were restated for all periods presented to reflect the discontinuation of the semiconductor automation business and the semiconductor cryogenics business in accordance with FASB ASC 205. The discussion in the notes to these Consolidated Financial Statements, unless otherwise noted, relate solely to the Company's continuing operations. On February 1, 2022, the Company completed the sale of the semiconductor automation business for $ 2.9 billion in cash. 2. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The accompanying Consolidated Financial Statements include the accounts of the Company and all entities where it has a controlling financial interest and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Revisions to Previously Issued Financial Statements and Financial Information In connection with the preparation of its fiscal year 2024 financial statements, the Company identified classification errors in its Consolidated Statement of Cash Flows for the year ended September 30, 2023 and the Condensed Consolidated Statements of Cash Flows for the interim periods ended March 31, 2023, June 30, 2023, December 31, 2023, March 31, 2024, and June 30, 2024. Specifically, the Company’s historical classification of the effects of exchange rate changes on the Company’s foreign denominated cash and cash equivalent balances was misclassified between the effects of exchange rate changes on cash and cash equivalents and cash flows from operating activities in its Consolidated Statement of Cash Flows for the year ended September 30, 2023 and its Condensed Consolidated Statements of Cash Flows for the interim periods ended June 30, 2023, December 31, 2023, March 31, 2024, and June 30, 2024. Additionally, the Company corrected for immaterial classification errors in between cash flows from operating activities, investing activities and financing activities, and supplemental disclosures for all revised periods. The Company's Condensed Consolidated Statements of Cash Flows for the interim periods ended March 31, 2023, June 30, 2023, December 31, 2023, March 31, 2024, and June 30, 2024 have been revised and disclosed in Note 21, Revision of Previously Issued Unaudited Quarterly Information below. 56 Table of Contents The Company assessed the effect of the errors on prior periods under the guidance of Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99, “Materiality,” codified in ASC 250, Accounting Changes and Error Corrections (“ASC 250” ). Based on its assessment, the Company determined that the error correction is not material to any previously issued financial statements. The correction has no impact on the Company's previously reported consolidated net income, financial position, net change in cash, cash equivalents, and restricted cash, or total cash, cash equivalents, and restricted cash as previously reported on the Company's Consolidated Statements of Cash Flows. Revisions of Previously Issued Audited Financial Statements As discussed above, the identified errors did not have a material impact on the previously issued financial statements for the year ended September 30, 2023. The Company has determined it appropriate to revise the following financial statement line items in the Consolidated Statement of Cash Flows for the year ended September 30, 2023 ( in thousands): Year ended September 30, 2023 As Reported Adjustments As Revised Cash flows from operating activities Accrued compensation and tax withholdings $ ( 15,434 ) $ ( 3,621 ) $ ( 19,055 ) Other current assets and liabilities ( 26,944 ) ( 6,711 ) ( 33,655 ) Net cash provided by operating activities $ 17,490 $ ( 10,332 ) $ 7,158 Cash flows from financing activities Proceeds from issuance of common stock $ - $ 3,621 $ 3,621 Net cash used in financing activities $ ( 844,080 ) $ 3,621 $ ( 840,459 ) Effects of exchange rate changes on cash and cash equivalents $ 37,955 $ 6,711 $ 44,666 Supplemental disclosures: Purchases of property, plant and equipment included in accounts payable and accrued expenses $ - $ 2,725 $ 2,725 The Company also added a supplemental disclosure of purchases of property, plant and equipment included in accounts payable and accrued expenses in the amount of $ 10.2 million to the Consolidated Statement of Cash Flows for the year ended September 30, 2022. 57 Table of Contents Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect amounts reported in the financial statements and notes thereto. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may differ from these estimates. Estimates are associated with recording accounts receivable, inventories, goodwill, intangible assets other than goodwill, contingent consideration liabilities related to business combinations, long-lived assets, derivative financial instruments, deferred income taxes, warranty obligations, revenue over time, stock-based compensation expense, and other accounts. The Company assesses the estimates on an ongoing basis and records changes in estimates in the period they occur and become known. Business Combinations The Company accounts for business acquisitions using the purchase method of accounting, in accordance with which, assets acquired (including identifiable intangible assets), and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed. Significant judgment is used in determining fair values of assets acquired and liabilities assumed and contingent consideration, as well as identified intangible assets and their estimated useful lives. Fair value and useful life determinations may be based on valuations that utilize among other factors, estimates of revenue growth rates, operating expenses, integration costs, obsolescence factors, future expected cash flows and discount rates attributable to completed technology and other acquired intangible assets. When estimating the assumptions to be used in the valuation, the Company includes a consideration of current industry information, market and economic trends, historical results of the acquired business, and other relevant factors. These assumptions are forward-looking and could be affected by future economic and market conditions. Adjustments to fair values of assets and liabilities made after the end of the measurement period are recorded within our operating results. Changes in the fair value of contingent consideration resulting from a change in the underlying inputs are recognized in results of operations until the arrangement is settled. Foreign Currency Translation and Transaction Accounting All assets and liabilities of the Company’s subsidiaries operating in non-U.S. dollar currencies are translated into the reporting currency at period-end exchange rates, while revenue, expenses, gains and losses are translated at the average exchange rates during the period. Resulting translation adjustments are reflected in the “Accumulated other comprehensive income (loss)” in the Company’s Consolidated Balance Sheets and presented as “Foreign currency translation adjustments” in the Company’s Consolidated Statements of Comprehensive Income (Loss). The determination of the functional currency of the Company’s subsidiaries is based on their financial and operational environment and is the local currency of the Company’s foreign subsidiaries. Certain transactions of the Company and its subsidiaries are denominated in currencies other than their functional currency. Foreign currency exchange gains (losses) generated from the settlement and remeasurement of these transactions are recognized in earnings and presented within “Other income (expense)” in the Company’s Consolidated Statements of Operations. Net foreign currency transaction and remeasurement losses totaled $ 3.2 million, $ 4.2 million and $ 1.7 million for the fiscal years ended September 30, 2024, 2023 and 2022 , respectively. The semiconductor automation business had foreign operations which had a cumulative translation adjustment balance of $ 16.6 million at the date of disposal of this business. This amount was removed from “Accumulated other comprehensive income (loss)” in the Company’s Consolidated Balance Sheet during the three months ended March 31, 2022, and included within the gain on the sale of the semiconductor automation business in “Income (loss) from discontinued operations, net of tax” in the Company’s Consolidated Statement of Operations. Derivative Financial Instruments The Company has transactions and balances denominated in currencies other than the functional currency of the transacting entity. Most of these transactions carry foreign exchange risk in Germany, the United Kingdom and China. The Company enters into foreign exchange contracts to reduce its exposure to currency fluctuations. The arrangements typically mature in three months or less and they do not qualify for hedge accounting. Net gains and losses related to foreign exchange contracts are recorded as a component of “Other income (expense)” in the accompanying Consolidated Statements of Operations. 58 Table of Contents The fair values of the forward contracts are recorded in the accompanying Consolidated Balance Sheets as “Prepaid expenses and other current assets” and “Accrued expenses and other current liabilities”. Foreign exchange contract assets and liabilities are measured and reported at fair value based on observable market inputs and classified within Level 2 of the fair value hierarchy described below due to a lack of an active market for these contracts. All derivatives, whether designated as a hedging relationship or not, are recorded in the Consolidated Balance Sheets at fair value. The accounting for changes in fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the Company must designate the hedging instrument as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation based on the exposure being hedged. Certain derivatives held by the Company are not designated as hedges but are used in managing exposure to changes in foreign exchange rates. A fair value hedge is a derivative instrument designated for the purpose of hedging the exposure to changes in fair value of an asset or a liability resulting from a particular risk. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are both recognized in the results of operations and presented in the same caption in the Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income. A cash flow hedge is a derivative instrument designated for the purpose of hedging the exposure to variability in future cash flows resulting from a particular risk. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in “Accumulated other comprehensive income (loss)” in the Consolidated Balance Sheets and recognized in the results of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in the results of operations. A hedge of a net investment in a foreign operation is achieved through a derivative instrument designated for the purpose of hedging the exposure of changes in value of investments in foreign subsidiaries. If the derivative is designated as a hedge of a net investment in a foreign operation, the effective portions of changes in the fair value of the derivative are recorded in “Accumulated other comprehensive income (loss)” as a part of the foreign currency translation adjustment. Ineffective portions of net investment hedges are recognized in the results of operations. For derivative instruments not designated as hedging instruments, changes in fair value are recognized in the Consolidated Statements of Operations as gains or losses consistent with the classification of the underlying risk. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash deposits and cash equivalents, marketable securities, derivative instruments, and accounts receivable. All of the Company’s cash and cash equivalents, restricted cash, marketable securities and derivative instruments are maintained by major financial institutions. The Company invests cash not used in operations in investment grade, high credit quality securities in accordance with the Company’s investment policy which provides guidelines and limits regarding investments type, concentration, credit quality and maturity terms aimed at maintaining liquidity and reducing risk of capital loss. The Company regularly monitors the creditworthiness of its customers and believes that it has adequately provided for exposure to potential credit losses. The Company’s ten largest customers accounted for approximately 26 %, 30 % and 20 % of its consolidated revenue for the fiscal years ended September 30, 2024, 2023 and 2022 , respectively. One customer accounted for 10 % and 13 % of the Company’s consolidated revenue for fiscal years 2024 and 2023 , respectively. This customer is related to the B Medical Systems segment and is a distributor shipping to end users in approximately 40 countries. There were no customers that accounted for more than 10% of the Company's consolidated revenue for fiscal year 2022 . Marketable Securities The Company invests in marketable securities that are classified as available-for-sale and records them at fair value in the Consolidated Balance Sheets. Marketable securities reported as current assets represent investments that mature within one year from the balance sheet date. Long-term marketable securities represent investments with maturity dates greater than one year from the balance sheet date. 59 Table of Contents Unrealized gains and losses are excluded from earnings and reported as a separate component of “Accumulated other comprehensive income (loss)” in the Consolidated Balance Sheets until the security is sold or matures. Gains or losses realized from sales of marketable securities are computed based on the specific identification method and recognized as a component of “Other income (expense)” in the accompanying Consolidated Statements of Operations. The Company reviews the marketable securities for impairment at each reporting date to determine if any of the securities have experienced an other-than-temporary decline in fair value. The Company considers factors, such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer, the Company’s intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of its amortized cost basis. If the Company believes that an other-than-temporary decline in fair value has occurred, it writes down the investment to its fair value and recognizes the credit loss in earnings and the non-credit loss in “Accumulated other comprehensive income (loss)” in the Consolidated Balance Sheets. Fair Value Measurement The Company measures certain financial assets and liabilities, including cash equivalents, available-for-sale securities, accounts receivable, accounts payable, contingent consideration liability, and derivative instruments at fair value. The Company applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following levels of inputs may be used to measure fair value: ● Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible 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. The fair value hierarchy gives the highest priority to Level 1 inputs. ● Level 2: Observable inputs other than prices included in Level 1, including quoted prices for similar assets or liabilities in active markets and 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 significant to the fair value of the assets or liabilities and reflect an entity’s own assumptions in pricing assets or liabilities since they are supported by little or no market activity. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, as well as considering counterparty credit risk in its assessment of fair value. The Company measures certain assets, including the cost and equity method investments, at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparable prices, and discounted cash flow projections. An impairment charge is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary Cash and Cash Equivalents, and Restricted Cash Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash. Cash equivalents are reported at fair value. The Company classifies long-term restricted cash balances within “Other assets” on the accompanying Consolidated Balance Sheets based upon the term of the remaining restrictions. Accounts Receivable and Allowance for Expected Credit Losses Trade accounts receivable do not bear interest and are recorded at the invoiced amount. The Company maintains an allowance for expected credit losses representing its best estimate of expected credit losses related to its existing accounts receivable and their net realizable value. The Company determines the allowance based on several factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends, historical experience and other information over the payment periods. The Company reviews and adjusts the allowance for expected credit losses on a quarterly basis. Accounts receivable balances are written off against the allowance for expected credit losses when the Company determines that the balances are not recoverable. Provisions for expected credit losses are recorded in “Selling, general and administrative” expenses in the Consolidated Statements of Operations. The Company does not have any off-balance-sheet credit exposure related to its customers. 60 Table of Contents Inventories Inventories are stated at the lower of cost or net realizable value determined on a first -in, first -out basis and include the cost of materials, labor and manufacturing overhead. The Company reports inventories at their net realizable value and provides reserves for excess, obsolete or damaged inventory based on changes in customer demand, technology and other economic factors. Fixed Assets, Intangible Assets and Impairment of Long-lived Assets Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation expense is computed based on the straight-line method and charged to results of operations to allocate the cost of the assets over their estimated useful lives, as follows: Buildings 10 - 40 years Computer equipment and software 3 - 5 years Machinery and equipment 2 - 7 years Furniture and fixtures 5 years Vehicles 3 - 7 years Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining terms of the respective leases. Equipment used for demonstrations to customers is included in machinery and equipment and depreciated over its estimated useful life. Repair and maintenance costs are expensed as incurred. The Company has developed software for internal use. Internal and external labor costs incurred during the application development stage of a project are capitalized. Costs incurred prior to application development and post implementation are expensed as incurred. Training and data conversion costs are expensed as incurred. Long lived assets and their associated accumulated depreciation are derecognized upon their retirement or at the time of disposal, and the resulting gain or loss is included in the Company’s results of operations. The Company identified finite-lived intangible assets other than goodwill as a result of acquisitions. Finite-lived intangible assets are valued based on estimated future cash flows and amortized over their estimated useful lives based on methods that approximate the pattern in which the economic benefits are expected to be realized. Finite-lived intangibles assets and fixed assets are tested for impairment when indicators of impairment are present. For purposes of this test, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If the Company determines that indicators of potential impairment are present, it assesses the recoverability of long-lived asset group by comparing its undiscounted future cash flows to its carrying value, and an impairment loss is recognized in operating results to the extent any finite-lived intangible asset’s carrying value exceeds its calculated fair value. The future cash flow period is based on the future service life of the primary asset within the long-lived asset group. Finite-lived intangible assets are amortized over their useful lives, as follows: Trademarks 13 years Patents 8 years Completed technology 7 - 15 years Customer relationships 10 - 15 years 61 Table of Contents Leases The Company has operating leases for real estate and non-real estate and finance leases for non-real estate. The classification of a lease as operating or finance and the determination of the right-of-use asset (“ROU asset”) and lease liability are determined at lease inception. The ROU asset represents the Company’s right to use an underlying asset for the lease term and the lease liability represents the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, an incremental borrowing rate is used based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company’s lease agreements may contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. Fixed payments for non-lease components are combined with lease payments and accounted for as a single lease component which increases the amount of the ROU asset and liability. The ROU asset for operating leases is included within “Operating lease right-of-use assets” and the ROU asset for finance leases is included within “Property, plant and equipment, net” in the Consolidated Balance Sheets. The short-term lease liabilities for both operating leases and finance leases are included within “Accrued expenses and other current liabilities” in the Consolidated Balance Sheets. The long-term lease liabilities for operating leases and finance leases are included within “Long-term operating lease liabilities”, and “Other long-term liabilities”, respectively, in the Consolidated Balance Sheets. Goodwill Goodwill represents the excess of purchase price over the fair value of net tangible and identifiable intangible assets of businesses acquired by the Company. Goodwill is tested for impairment annually or more often if impairment indicators are present at the reporting unit level. The Company elected April 1 st as its annual goodwill impairment assessment date. If the existence of events or circumstances indicates that it is more likely than not that fair values of the reporting units are below their carrying values, the Company performs additional impairment tests during interim periods to evaluate goodwill for impairment. Application of the goodwill impairment test requires significant judgment based on market and operational conditions at the time of the evaluation, including management’s best estimate of future business activity and the related estimates of future cash flows from the reporting units that include the associated goodwill. These periodic evaluations could cause management to conclude that impairment factors exist, requiring an adjustment of these assets to their then-current fair market values. Future business conditions and/or activity could differ materially from the projections made by management which could result in impairment charges. The goodwill impairment test is performed at the reporting unit level. A reporting unit is either an operating segment or one level below it, which is referred to as a “component”. The level at which the impairment test is performed requires an assessment of whether the operations below an operating segment constitute a self-sustaining business, in which case testing is generally performed at this level. The Company first assesses qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company determines, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying value, management performs a quantitative goodwill impairment test by comparing the reporting unit’s fair value with its carrying value. An impairment loss is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. We determine fair values of our reporting units based on an income approach in accordance with the discounted cash flow method, (the “DCF Method”). The DCF Method is based on projected future cash flows and terminal value estimates discounted to their present values. Terminal value represents the present value an investor would pay on the valuation date for the rights to the cash flows of the business for the years subsequent to the discrete cash flow projection period. We consider the DCF Method to be the most appropriate valuation technique since it is based on management’s long-term financial projections. In addition to determining the fair value of our reporting units based on the DCF Method, we also compare the aggregate values of our net corporate assets and reporting unit fair values to our overall market capitalization and use certain market-based valuation techniques to assess the reasonableness of the reporting unit fair values determined in accordance with the DCF Method. 62 Table of Contents Warranty Obligations The Company establishes reserves for estimated costs of product warranties based on historical information. Product warranty reserves are recorded at the time product revenue is recognized, and retrofit accruals are recorded at the time retrofit programs are established. 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 by the Company. Revenue Recognition The Company generates revenue from the following sources: ● Products, including sales of automated cold sample management systems, vaccine cold storage and transport systems, consumables, instruments, spare parts, and software. ● Services, including repairs, upgrades, diagnostic support, installation, as well as biological sample services such as DNA sequencing, gene synthesis, molecular biology, bioinformatics, biological sample storage, sample acquisition, and other support services. The Company recognizes revenue for the transfer of such promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those products or services. Under ASC 606, Revenue from Contracts with Customers (“ASC 606” ), revenue is recognized when, or as, the transfer of control of the underlying performance obligation occurs. To determine the amount of consideration the Company expects to be entitled to and whether transfer of control has occurred, the Company applies the following five -step model: ● Identify the contract with a customer. Contracts are accounted for when approval and commitment has been received from both parties, the rights of each party are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration to which the Company is entitled is probable. Contracts are generally evidenced through receipt of an approved purchase order or execution of a binding arrangement and can be both short and long-term. Long-term contracts within the segments relate to the sale of products with attached service-type warranty contracts that generally have a stated contract term that is greater than one year. Contracts may contain acceptance provisions where the Company is required to obtain technical acceptance from the customer upon completion of installation services and evidence of the system’s functional performance within the customer’s operating environment. The Company has concluded that acceptance criteria within its contracts can be objectively evaluated and will not impact the Company’s transfer of control assessment under ASC 606. ● Identify the performance obligations in the contract. Performance obligations include the sale of products and services. Certain customer arrangements related to the sale of automated cold sample management systems generally include more than one performance obligation and may include a combination of goods and/or services, such as products with installation services or service-type warranty obligations. These contracts include multiple promises and as a result, the Company is required to evaluate each promise and determine whether the promise qualifies as a performance obligation within the contract. Contracts may contain the option to acquire additional products or services at defined prices. The Company reviews the pricing of these options to determine whether the option would exist independently of the current contract. If the pricing of contract options provides a material right to the customer that it would not receive without entering into the current contract, the Company accounts for the option as a separate performance obligation. ● Determine the transaction price. The transaction price of the Company’s contracts with its customer is generally fixed, based on the amounts to be contractually billed to the customer. Although uncommon, certain contracts may contain variable consideration in the form of customer allowances and rebates that consist primarily of retrospective volume-based discounts and other incentive programs. Variable consideration is estimated at contract inception and included in the transaction price if it is probable that a subsequent change in the estimate would not result in a significant revenue reversal. The period between transfer of control of the performance obligations within a customer contract and timing of payment is generally within one year. As a result, the Company’s contracts typically do not include significant financing components. 63 Table of Contents ● Allocate the transaction price to the performance obligations in the contract. For customer contracts that contain more than one performance obligation, the Company allocates the total transaction consideration to each performance obligation based on the relative stand-alone selling price of each performance obligation within the contract. The Company relies on either observable standalone sales or an expected cost-plus margin approach to determine the standalone selling price of offerings, depending on the nature of the performance obligation. Performance obligations whose standalone selling price is estimated using an expected cost-plus margin approach relate to the sale of customized automated cold sample management systems, services, and service-type warranties. ● Recognize revenue when or as the Company satisfies a performance obligation . The Company satisfies its performance obligations by transferring a product or service either at a point in time or over time, when the transfer of control of the underlying performance obligation has occurred. Control is evidenced by the customer’s ability to direct the use of and obtain substantially all the remaining benefits from the performance obligation. Revenue from third -party sales for which the Company does not meet the criteria for gross revenue recognition is recognized on a net basis. All other revenue is recognized on a gross basis. The Company excludes from the transaction price all sales taxes assessed by governmental authorities and as a result, revenue is presented net of tax. As a result of applying this five -step model under ASC 606, the Company recognizes revenues from its sale of products and services as follows: ● Products: Revenue from the sale of standard products is recognized upon their transfer of control to the customer, which is considered complete at either the time of shipment or arrival at destination, based on the agreed upon terms within the contract. The Company’s payment terms for the sale of standard products are typically 30 to 60 days. Revenue from the sales of certain products that involve significant customization, which include primarily automated cold sample management systems is recognized over time as the asset created by the Company’s performance does not have alternative use to the Company and an enforceable right to payment for performance completed to date is present. The Company recognizes revenue as work progresses based on a percentage of actual labor hours incurred on the project to-date and total estimated labor hours expected to be incurred on the project. The selection of the method to measure progress towards completion requires judgment. The Company has concluded that using the percentage of labor hours incurred to estimated labor hours needed to complete the project most appropriately depicts the Company’s efforts towards satisfaction of the performance obligation. The Company develops profit estimates for long-term contracts based on total revenue expected to be generated from the project and total costs anticipated to be incurred in the project. These estimates are based on a number of factors, including the degree of required product customization and the work required to be able to install the product in the customer’s existing environment, as well as the Company’s historical experience, project plans and an assessment of the risks and uncertainties inherent in the contract related to implementation delays or performance issues that may or may not be within the Company’s control. The Company estimates a loss on a contract by comparing total estimated contract revenue to the total estimated contract costs and recognizes a loss during the period in which it becomes probable and can be reasonably estimated. The Company reviews profit estimates for long-term contracts during each reporting period and revises the estimate based on changes in circumstances. Revenue for certain arrangements that involve significant product customization but do not provide the Company with an enforceable right to payment for performance completed to date are recognized at a point in time, upon completion or substantial completion of the project, provided transfer of control has occurred. The project is considered substantially complete when the Company receives acceptance from the customer and remaining tasks are perfunctory or inconsequential and in control of the Company. Generally, the terms of long-term contracts provide for progress billings based on completion of milestones or other defined phases of work. In certain instances, payments collected from customers in advance of recognizing the related revenue are recorded and presented as contract liabilities within “Deferred revenue” on the Company’s Consolidated Balance Sheet. Additionally, due to certain billing constraints within contracts, the customer may retain a portion of the contract price until completion of the contract. In these contracts, an unbilled receivable is recorded when revenue recognized may exceed billings, which the Company presents as a contract asset on the balance sheet, which is included within the “Prepaid expenses and other current assets” on the Company’s Consolidated Balance Sheet. 64 Table of Contents ● Services: Service revenue is generally recognized ratably over time or on an output method, as the customer simultaneously receives and consumes the benefit of these services as they are performed. Payments related to service-type warranties may be made up front or proportionally over the contract term. Revenue for sample management and storage are recognized over the period the services are rendered or samples are stored. Revenue from genomic services is recognized over time and is based upon the fact that transfer of control takes place over time as determined using the input method of costs incurred. Payment due or received from the customers prior to rendering the associated services are recorded as a contract liability. Government Assistance The Company receives government assistance from various domestic and foreign, local, regional and national governments which vary in size and duration in the form of cash grants or refundable tax credits. The government assistance typically specifies conditions that must be met in order for it to be earned, such as employee retention targets, completion of employee training, or the construction or acquisition of property and equipment and are often time bound. If conditions are not satisfied or if the duration period for the arrangement is not met, the government assistance is often subject to reduction, repayment, or termination. The Company’s policy is to recognize a benefit in the Consolidated Statements of Operations in “ Other, net ” over the life of the asset or duration of the program when the Company has reasonable assurance that it will comply with the conditions under the government assistance and the government assistance will be received, refundable tax credits may also result in a reduction in “Accrued income taxes payable” in the Consolidated Balance Sheets. If government assistance is received or is probable of receipt and the amount is determinable by the Company in advance of completion of the conditions, the government assistance is recognized in “Accrued expenses and other current liabilities” or “Other long-term liabilities” in the Consolidated Balance Sheets, as appropriate. In fiscal year 2024 , approximately $ 2.1 million of government assistance was recognized in “Other, net” in the Company’s Consolidated Statement of Operations. The Company also received advance cash government assistance of $ 1.4 million, which was recognized within “Other long-term liabilities” in the Consolidated Balance Sheet. In fiscal year 2023, approximately $ 4.3 million of government assistance was recognized in “ Other, net ” and approximately $ 0.9 million was recognized as a reduction to “ Cost of Revenue – Products ” in the Company’s Consolidated Statement of Operations. The Company also received advance cash government assistance in fiscal year 2023 of $ 6.6 million, of which $ 4.7 million is recognized within “Other long-term liabilities”, and $ 1.9 million is recognized within “ Accrued expenses and other current liabilities ” in the Consolidated Balance Sheet. Research and Development Expense Research and development costs are expensed as incurred. Research and development costs consist primarily of personnel expenses related to development of new products, as well as enhancements and engineering changes to existing products and development of hardware and software components. Restructuring Charges Accounting for the timing and amount of termination benefits provided by the Company to employees is determined based on whether: (a) the Company has a substantive plan to provide such benefits, (b) the Company has a written employment contract with the affected employees that includes a provision for such benefits, (c) the termination benefits are due to the occurrence of an event specified in an existing plan or agreement, or (d) the termination benefits are a one -time benefit. In certain circumstances, employee termination benefits may meet more than one of the characteristics listed above and therefore, may have individual elements that are subject to different accounting models. From time to time when executing a restructuring or exit plan, the Company also incurs costs other than termination benefits, such as impairments of long-lived assts that are no longer used in operations (including right-of-use assets, facility-related property and equipment) and termination costs or penalties to cancel a contractual obligation. Such costs are recognized when incurred, which generally occurs at the contract termination or over the period from when a plan to abandon a leased facility is approved through the cease-use date but charges may continue over the remainder of the original contractual period. 65 Table of Contents Stock-Based Compensation The fair value of restricted stock units is determined based on the number of shares granted and the closing price of the Company’s common stock quoted on the Nasdaq Stock Market on the date of grant. For awards that vest based on service conditions, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. For awards that vest subject to performance conditions, the Company recognizes stock-based compensation expense ratably over the performance period if it is probable that performance condition will be met and adjusts for the percentage of shares probable of achieving the performance goals. Each quarter, management assesses the probability of achieving the performance goals. The Company makes estimates of stock award forfeitures and the number of awards expected to vest. The Company considers many factors in developing forfeiture estimates, including award types, employee classes and historical experience. Current estimates may differ from actual results and future changes in estimates. Income Taxes The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, as well as operating loss and tax credit carryforwards. The Company’s Consolidated Financial Statements contain certain deferred tax assets that were recorded as a result of operating losses, as well as other temporary differences between financial and tax accounting. A valuation allowance is established against deferred tax assets if, based upon the evaluation of positive and negative evidence and the extent to which that evidence is objectively verifiable, it is more likely than not that some or all of the deferred tax assets will not be realized. Significant management judgment is required in determining the Company’s income tax (benefit) expense, the Company’s deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. The Company evaluates the weight of all available evidence to determine whether it is more likely than not that some portion or all of the net deferred income tax assets will not be realized. The calculation of the Company’s income tax liabilities involves consideration of uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two -step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon an audit conducted by taxing authorities, including resolution of related appeals or litigation processes, if any. If the Company determines that a tax position will more likely than not be sustained, the second step requires the Company to estimate and measure the tax benefit as the largest amount that is more likely than not to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as the Company must determine the probability of various possible outcomes. The Company re-evaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors, such as changes in facts or circumstances, tax law, new audit activity and effectively settled issues. Determining whether an uncertain tax position is effectively settled requires judgment. A change in recognition or measurement may result in the recognition of a tax benefit or an additional charge to the tax expense. Net Income (Loss) per Share Basic income or loss per share is determined by dividing net income or loss by the weighted average common shares outstanding during the period. Diluted income or loss per share is determined by dividing net income or loss by diluted weighted average shares outstanding during the period. Diluted weighted average shares reflect the dilutive effect, if any, of potential common shares. To the extent their effect is dilutive, employee equity awards and other commitments to be settled in common stock are included in the calculation of diluted income or loss per share based on the treasury stock method. Potential common shares are excluded from the calculation of dilutive weighted average shares outstanding if their effect would be anti-dilutive at the balance sheet date based on a treasury stock method or due to a net loss. Recently Adopted Accounting Pronouncements In October 2023, the FASB issued Accounting Standards Update (“ASU”) 2023 - 06, Disclosure Improvements: Codification Amendments in Response to the SEC ’ s Disclosure Update and Simplification Initiative . The ASU aligns the requirements in FASB’s ASC with SEC regulations. The effective date for each amendment is the date on which the SEC removal of the related disclosure requirement from Regulation S- X or Regulation S-K becomes effective, or if the SEC does not remove the requirement by June 30, 2027, the amendment will not become effective for any entity. Early adoption is prohibited. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements or disclosures. 66 Table of Contents In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures . The ASU requires the disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures pertaining to significant segment expenses. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the standard to determine the impact of adoption on its disclosures. The Company does not expect that the standard will have an impact on its consolidated financial statements. In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures . The ASU is intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. The Company does not expect the adoption of this standard to impact its consolidated financial statements until fiscal year 2026. In March 2024, the SEC issued final rules under SEC Release No. 33 - 11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors . Effective fiscal year 2026, the Company is required to disclose climate-related risks that are reasonably likely to have a material impact on the Company’s business strategy, results of operations, or financial condition. Additionally, the Company will be required to disclose the effects of severe weather events and other natural conditions within the notes to the financial statements, subject to certain materiality thresholds. Effective fiscal year 2027, required disclosures will also include disclosure of material direct greenhouse gas emissions from operations owned or controlled (Scope 1 ) and material indirect greenhouse gas emissions from purchased energy consumed in owned or controlled operations (Scope 2 ). In April 2024, the SEC issued an order voluntarily staying the effectiveness of the new rules pending the completion of judicial review of certain legal challenges to their validity. The Company is currently evaluating the impact of these rules assuming adoption as well as monitoring the status of the related litigation and the SEC’s stay which remains in effect as of September 30, 2024. In 2021, the Organization of Economic Cooperation and Development (“OECD”) introduced its Pillar II Framework Model Rules (“Pillar 2” ), which are designed to impose a 15% global minimum tax on the earnings of in-scope multinational corporations on a country-by-country basis. Certain aspects of Pillar 2 took effect on January 1, 2024 while other aspects go into effect on January 1, 2025. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements as the Company does not expect to meet the consolidated revenue threshold of €750 million over the next twelve months. 3. Discontinued Operations Disposition of the Semiconductor Automation Business On September 20, 2021, the Company entered into a definitive agreement to sell its semiconductor automation business to Thomas H. Lee Partners, L.P. (“THL”) and the Company determined that the semiconductor automation business met the criteria to be classified as a discontinued operation and, as a result, its historical financial results are reflected in the consolidated financial statements as a discontinued operation, and assets and liabilities were classified as assets and liabilities held for sale. On February 1, 2022, the Company completed the sale of the semiconductor automation business for $ 2.9 billion in cash. Following the completion of the sale, the Company no longer serves the semiconductor market. In connection with the closing of the sale, the Company and THL entered into a transition services agreement under which both the Company and THL provide each other certain transition services related to finance and accounting, information technology, human resources, compliance, facilities, legal and research and development support, for time periods which ranged from three to 24 months. In addition, the Company agreed to lease back a portion of the facilities in Chelmsford, Massachusetts, that were sold to THL as part of the sale agreement. As of September 30, 2024 , neither party was providing the other services under the transition services agreement and the two original leases were terminated. The transition services approximated fair value and did not have a material impact on the Company’s financial results or operations. 67 Table of Contents During the twelve months ended September 30, 2023 , the Company recorded a $ 1.4 million loss on divestiture. The following table presents the financial results of automation business discontinued operations with respect to the automation business (in thousands) for the twelve months ended September 30, 2022: Year Ended September 30, 2022 Revenue Products $ 244,962 Services 19,468 Total revenue 264,430 Cost of revenue Products 141,165 Services 11,159 Total cost of revenue 152,324 Gross profit 112,106 Operating expenses Research and development 18,486 Selling, general and administrative 30,622 Restructuring charges - Total operating expenses 49,108 Operating income 62,998 Gain on divestiture 2,561,820 Income before income taxes 2,624,818 Income tax expense 480,673 Net income from discontinued operations $ 2,144,145 The following table presents the significant non-cash items and capital expenditures for the discontinued operations with respect to the semiconductor automation business that are included in the Consolidated Statements of Cash Flows (in thousands): Year Ended September 30, 2022 Capital expenditures 2,862 There were no significant non-cash items and or capital expenditures related to discontinued operations during the fiscal years ended September 30, 2024 and 2023. 4. Business Combinations The Company recorded the assets acquired and liabilities assumed related to the following acquisitions at their fair values as of the acquisition date, from a market participant’s perspective. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed on the acquisition date, its estimates and assumptions are subject to refinement. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations. The measurement period to finalize the fair values is completed within one year after the respective acquisition date. 68 Table of Contents Acquisitions Completed in Fiscal Year 2023 Ziath Ltd On February 2, 2023, the Company acquired Ziath, Ltd. and its subsidiaries (“Ziath”). Based in Cambridge, United Kingdom, Ziath is a leading provider of 2D barcode readers for life science applications. Founded in 2005, Ziath’s innovative 2D barcode readers are a key component of the laboratory automation workflow serving pharmaceutical, biotechnology and academic customers worldwide. Ziath is expected to enhance the Company’s offerings, which support the entire lifecycle of sample management from specimen collection to sample registration, storage and processing. The acquisition was completed at a purchase price of $ 16.0 million, net of cash acquired. The acquired business is included in the Sample Management Solutions segment. The allocation of the consideration included $ 12.0 million of goodwill, $ 4.1 million of technology, $ 1.1 million of deferred tax liability, $ 0.6 million of customer relationships, $ 0.3 million of trademarks, and several other assets and liabilities. The weighted average life of completed technology is 10 years, customer relationships is 13 years, and trademarks is 13 years. The goodwill represents the Company’s ability to provide differentiated technology enabling high throughput scanning of varied formats of consumables. The goodwill is not expected to be deductible for income tax purposes. The Company did not present pro forma financial information for its consolidated results of operations for the acquisition because such results are immaterial. B Medical Systems S. á . r.l. On October 3, 2022, the Company acquired B Medical Systems S.á r.l. and its subsidiaries ("B Medical"), for a purchase price of $ 432.2 million including contingent consideration, which the Company estimated to be $ 17.0 million as of the measurement date. B Medical is a market leader in temperature-controlled storage and transportation solutions that enables the delivery of life-saving treatments to more than 150 countries worldwide. B Medical’s results of operations are reported in the Company’s Life Sciences Products segment from the date of acquisition. The Company paid a total initial cash purchase price at closing of $ 424.0 million, as adjusted for cash acquired and other items pursuant to the acquisition agreement. B Medical Systems Holdings S.A (the “Seller”) was eligible to earn up to €50.0 million in contingent consideration based upon achievement of certain financial metrics by B Medical. The Company repaid B Medical’s outstanding debt of $ 43.1 million prior to September 30, 2022 which was included in the purchase price and was classified in prepaid assets as of September 30, 2022. In addition, the Company recorded $ 381.0 million in short-term restricted cash as of September 30, 2022, which was reserved to complete the acquisition which occurred on October 3, 2022. The contingent consideration payment from the Company to the Seller was based on achievement of certain revenue targets over the one -year period from October 3, 2022 to September 30, 2023. The Company recorded the estimated fair value of the contingent consideration liability utilizing a Monte Carlo simulation that incorporates revenue projections, revenue growth rates of comparable companies, implied volatility and a risk adjusted discount rate. Each quarter, the Company was required to remeasure the fair value of this liability as assumptions changed over time and any resulting adjustments in the fair value of this liability were recorded in “Operating expenses” in the Consolidated Statements of Operations. This fair value measurement was based on significant inputs not observable in the market and thus represented a Level 3 measurement. This fair value measurement was directly impacted by the Company’s estimate of future incremental revenue growth of the business. Accordingly, if actual revenue growth was higher or lower than the estimates within the fair value measurement, the Company would record additional charges or gains. This liability was revalued from $ 18.5 million as of December 31, 2022 to zero as of June 30, 2023. The purchase price was allocated to B Medical’s tangible and identifiable intangible assets acquired and liabilities assumed based on the estimated fair values as of October 3, 2022, as set forth below (in thousands): 69 Table of Contents Fair Value Accounts receivable $ 19,549 Inventory 51,978 Other assets 10,769 Property plant and equipment 54,149 Identifiable Intangible Assets: Completed technology 100,600 Trademarks 5,500 Customer relationships 36,700 Backlog 600 Other liabilities ( 32,533 ) Deferred income taxes, net ( 43,393 ) Goodwill 228,241 Total purchase price, net of cash acquired $ 432,160 During the twelve months ended September 30, 2023 the Company recorded adjustments which resulted in a net increase to goodwill of $ 9.2 million since the initial preliminary purchase price allocation. These adjustments include a $ 1.0 million decrease to property, plant and equipment, a $ 0.4 million increase to intangible assets, a $ 9.6 million decrease to other assets, a $ 2.3 million increase to inventory, a $ 0.8 million decrease in other liabilities, and a $ 0.4 million decrease to deferred taxes. The Company finalized purchase accounting for B Medical in the fourth quarter of fiscal year 2023 and there have been no adjustments to the purchase price allocation. In performing the purchase price allocation, the Company considered, among other factors, the intended future use of acquired assets, and historical financial performance and estimates of future performance of B Medical’s business. As part of the purchase price allocations, the Company determined the identifiable intangible assets were completed technology value, trademarks, customer relationships and backlog. The fair value of the intangible assets was estimated using the income approach, specifically the multi-period excess earnings method, and the cash flow projections were discounted using a rate of 13 %. The cash flows were based on estimates used to price the transaction, and the discount rate applied was benchmarked to the implied rate of return from the transaction and the weighted average cost of capital. The weighted average life of completed technology is 10 years, customer relationships is 16 years, trademarks is five years and backlog is one year. The intangible assets acquired are amortized over their respective weighted average life using methods that approximate the pattern in which the economic benefits are expected to be realized. The calculation of the excess of the purchase price over the estimated fair value of the tangible net assets and intangible assets acquired was recorded to goodwill. Goodwill of $ 228.2 million largely reflected the then potential expansion of the Company's cold chain capabilities by adding differentiated solutions for reliable and traceable transport of temperature-controlled specimens. The goodwill is not deductible for income tax purposes. The acquired intangible assets and goodwill are subject to review for impairment if indicators of impairment develop and otherwise at least annually. See Note 8, Goodwill and Intangible Assets below for information about the impairment of this goodwill during the second quarter of fiscal year 2024. The following financial information reflects the Company's consolidated results from B Medical (in thousands): Year Ended September 30, 2024 2023 Revenue $ 83,125 $ 113,122 Net loss $ ( 142,637 ) $ ( 26,463 ) 70 Table of Contents The results of the Company’s quantitative goodwill impairment analyses as of March 31, 2024 indicated an impairment of goodwill within its B Medical Systems reporting unit resulting in a non-cash impairment charge of $ 111.3 million recorded within "Impairment of goodwill and intangible assets" in the Company’s Consolidated Statements of Operations for fiscal year 2024. The Company incurred $ 4.9 million in transaction costs recognized in earnings and presented within “Selling, general and administrative” in the Company’s Consolidated Statements of Operations related to the acquisition for fiscal year 2023. The following unaudited pro forma financial information reflects the Company's consolidated results of operations as if the acquisition had taken place on October 1, 2021 ( in thousands). The unaudited pro forma financial information is not necessarily indicative of the results of operations that the Company would have reported had the transaction occurred at the beginning of these periods nor is it necessarily indicative of future results. Year Ended September 30, 2023 2022 Revenue $ 665,072 $ 672,151 Net income (loss) $ ( 5,356 ) $ 2,111,185 To present the Company's consolidated results of operations as if the acquisition had taken place on October 1, 2021, the unaudited pro forma earnings for the fiscal years 2023 and 2022 have been adjusted to exclude $ 5.3 million and include $ 23.2 million, respectively, of property, plant and equipment, inventory, and intangible asset step-up depreciation and amortization expense. Non-recurring acquisition related items and significant GAAP adjustments in the fiscal years 2023 and 2022 exclude $ 3.6 million and include $ 4.9 million, respectively, of transaction costs, net. Additional adjustments for fiscal year 2022 exclude $ 6.1 million of debt interest expense, include $ 1.1 million expense of capitalized research and development costs, and include a $ 6.4 million tax benefit adjustment. The pro forma financial information does not include any anticipated cost savings or other effects of the integration of B Medical. Accordingly, the unaudited pro forma financial information does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations. Acquisition Completed in Fiscal Year 2022 Barkey Holding GmbH On July 1, 2022, the Company acquired Barkey Holding GmbH and its subsidiaries (“Barkey”), a leading provider of controlled-rate thawing devices for customers in the medical, biotechnology and pharmaceutical industries, headquartered in Leopoldshöhe, Germany. The financial results for Barkey are included within the Sample Management Solutions segment. The total cash purchase price of the acquisition was $ 84.8 million, net of cash acquired. The acquisition added innovative products and capabilities that extend the Company’s extensive cold chain of condition portfolio of products and services, while also expanding the Company’s customer reach in the fast-growing cell and gene therapy (“CGT”) space. The allocation of the consideration included $ 3.0 million of customer relationships, $ 29.0 million of technology, $ 60.5 million of goodwill, $ 9.8 million of deferred tax liabilities, and several other assets and liabilities. The weighted useful life of all the intangible assets acquired is 15 years. The goodwill and intangibles are not tax deductible. During the twelve months ended September 30, 2023 the Company recorded an adjustment which resulted in an increase to goodwill of $ 2.7 million since the initial preliminary purchase price allocation due to a $ 2.7 million increase to accrued liabilities. The Company did not present pro forma financial information for its consolidated results of operations for the acquisition because such results are immaterial. 71 Table of Contents 5. Marketable Securities During fiscal years 2024 and 2023 , the Company had sales and maturities of marketable securities of $ 0.7 billion and $ 1.1 billion, respectively. Realized gains on the sales of marketable securities were insignificant for the fiscal year ended September 30, 2024 and realized losses on the sales of marketable securities were $ 0.8 million for the fiscal year ended September 30, 2023 . The following is a summary of the amortized cost and the fair value, including accrued interest receivable, as well as unrealized gains (losses) on the short-term and long-term marketable securities as of September 30, 2024 and 2023 (in thousands): Gross Gross Amortized Unrealized Unrealized Cost Losses Gains Fair Value September 30, 2024: U.S. Treasury securities and obligations of U.S. government agencies $ 118,159 $ ( 119 ) $ 51 $ 118,091 Bank certificates of deposits 5,212 ( 13 ) 1 5,200 Corporate securities 77,580 ( 255 ) — 77,325 $ 200,951 $ ( 387 ) $ 52 $ 200,616 September 30, 2023: U.S. Treasury securities and obligations of U.S. government agencies $ 227,804 $ ( 2,573 ) $ — $ 225,231 Bank certificates of deposits 8,122 ( 170 ) — 7,952 Corporate securities 221,155 ( 4,127 ) — 217,028 $ 457,081 $ ( 6,870 ) $ — $ 450,211 The fair values of the marketable securities by contractual maturities at September 30, 2024 are presented below (in thousands). Amortized Cost Fair Value Due in one year or less $ 151,510 $ 151,162 Due after one year through five years 45,654 45,667 Due after five years through ten years — — Due after ten years 3,787 3,787 Total marketable securities $ 200,951 $ 200,616 Expected maturities could differ from contractual maturities because the security issuers may have the right to prepay obligations without prepayment penalties. Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. The Company does not believe any unrealized losses represent impairments based on the evaluation of the available evidence. 72 Table of Contents 6. Derivative Instruments Net gains and losses related to foreign exchange contracts are recorded as a component of “Other income (expense)” in the accompanying Consolidated Statements of Operations and are as follows for the fiscal years ended September 30, 2024, 2023 and 2022 (in thousands): Year Ended September 30, 2024 2023 2022 Realized (losses) gains on derivatives not designated as hedging instruments $ ( 2,808 ) $ ( 1,174 ) $ 991 The notional amounts of the Company’s derivative instruments as of September 30, 2024 and 2023 were as follows (in thousands): Year Ended September 30, Hedge Designation 2024 2023 Cross-currency swap Net Investment Hedge $ 75,978 $ 436,360 Foreign exchange contracts Undesignated 60,101 184,800 The fair value of derivative instruments are as follows at September 30, 2024 and 2023 (in thousands): Fair Value of Assets Fair Value of Liabilities As of September 30, 2024 2023 2024 2023 Derivatives designated as hedging instruments Cross-currency swap $ — $ 13,036 $ ( 1,915 ) $ — Derivatives not designated as hedging instruments Foreign exchange contracts $ 9 $ 44 $ ( 213 ) $ ( 421 ) Total fair value $ 9 $ 13,080 $ ( 2,128 ) $ ( 421 ) Hedging Activities On February 1, 2022, the Company entered into a cross-currency swap agreement to hedge the variability of exchange rate impacts between the U. S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $ 1.0 billion for €915.0 million at a weighted average interest rate of 1.20 %. The designated notional amount was $ 960.0 million, and the actual interest rate was 1.28 %. The 1.28 % rate was in the range of the market value for February 1, 2022 and was the true interest rate on the notional amount. The Company designated the cross-currency swap as a hedge of net investments against one of its Euro denominated subsidiaries requiring an exchange of the notional amounts at maturity. At the maturity of the cross currency-swap on February 1, 2023, the Company delivered a notional amount of €852.0 million and received a notional amount of $ 960.0 million at a Euro to U.S. dollar exchange rate of 1.13 , which included a gain of $ 29.3 million. On February 1, 2023, the Company entered into another cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $ 436.0 million for €400.0 million at a weighted average interest rate of 1.66 %. The Company designated the cross-currency swap as a hedge of net investments against one of its Euro denominated subsidiaries, which requires an exchange of the notional amounts at maturity. At the maturity of the cross currency-swap on February 1, 2024, the Company delivered a notional amount of €400.0 million and received a notional amount of $ 436.0 million at a Euro to U.S. dollar exchange rate of 1.09 , which included a gain of $ 1.4 million. On February 1, 2024, the Company entered into another cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $ 76.0 million for €70.0 million at a weighted average interest rate of 1.44 %. The Company designated the cross-currency swap as a hedge of net investments against one of its Euro denominated subsidiaries, which requires an exchange of the notional amounts at maturity on February 3, 2025. 73 Table of Contents The cross-currency swaps were recorded as a derivative liability within “Accrued expenses and other current liabilities” as of September 30, 2024 and a “Derivative asset” as of September 30, 2023 in the Consolidated Balance Sheets. The cross-currency swap is marked to market at each reporting period, representing the fair value of the cross-currency swap, any changes in fair value are recognized as a component of “Accumulated other comprehensive income (loss)” in the Consolidated Balance Sheets. The cross-currency swap is classified within Level 2 of the fair value hierarchy, described in Note 15, Fair Value Measurements below. Interest earned on the cross-currency swap is recorded within “Interest income, net” in the Consolidated Statements of Operations. For the fiscal years ended September 30, 2024 and 2023 , the Company recorded interest income of $ 3.1 million and $ 8.9 million, respectively, on these instruments. 7. Property, Plant and Equipment Property, plant and equipment were as follows as of September 30, 2024 and 2023 (in thousands): September 30, 2024 2023 Buildings, land, and land use right $ 47,330 $ 41,870 Computer equipment and software 45,353 38,623 Machinery and equipment 161,659 139,858 Furniture and fixtures 8,681 7,426 Leasehold improvements 59,834 52,670 Capital projects in process 27,122 33,915 Right-of-use asset 5,557 4,718 Vehicles 1,359 1,540 Property, plant and equipment, gross 356,895 320,620 Less: accumulated depreciation and amortization ( 154,241 ) ( 114,876 ) Property, plant and equipment, net $ 202,654 $ 205,744 Depreciation expense, which includes amortization expense on finance leases, was $ 37.5 million, $ 37.2 million and $ 21.9 million, respectively, for the fiscal years ended September 30, 2024 , 2023 , and 2022 . The Company recorded $ 1.0 million of additions to property, plant and equipment for which cash payments had not yet been made as of September 30, 2024 . As of September 30, 2024 and 2023 , the Company had cumulative capitalized direct costs of $ 32.8 million and $ 30.5 million, respectively, associated with the development of software for its internal use. As of September 30, 2024 , this balance included $ 5.1 million associated with software still in the development stage included within "Property, plant and equipment, net" in the accompanying Consolidated Balance Sheets. During fiscal year 2024 , the Company capitalized direct costs of $ 2.4 million associated with the development of software for its internal use. 74 Table of Contents 8. Goodwill and Intangible Assets The Company conducts an impairment assessment annually on April 1, or more frequently if impairment indicators are present. Changes to the Company’s operating segments effective October 1, 2023 resulted in a change to the Company’s reporting units, which are aligned to the Company’s operating and reportable segments (as further described in Note 18, Segment and Geographic Information below). As a result of this segment realignment, the Company allocated goodwill to the reporting units existing under the new organizational structure on a relative fair value basis as of October 1, 2023. The Company estimated the fair values of the affected businesses based upon the present value of their anticipated future cash flows. The Company's determination of fair value involved judgment and the use of significant estimates and assumptions. The Company tested its reporting units for potential impairment immediately before and after the segment realignment and concluded that the estimated fair value of each reporting unit exceeded its respective carrying value. As of October 1, 2023, the fair value of the B Medical Systems reporting unit exceeded its carrying value by approximately 5 percent. During the second quarter of fiscal year 2024, as part of the Company’s routine long-term planning process, the Company assessed several events and circumstances that could affect the significant inputs used to determine the fair value of its reporting units, including updates to forecasted cash flows, the impact of the Company’s planned transformation initiatives and the overall change in the economic climate since its last impairment assessment in October 2023. The Company concluded it was more likely than not the fair value of the Company’s B Medical Systems segment was less than its carrying amount resulting from the reduction in the Company’s anticipated revenue growth rates for the current and subsequent years as compared to prior projections. As a result, the Company completed a quantitative goodwill impairment test for its reporting units in accordance with ASC 350, Intangibles – Goodwill as of March 31, 2024. For the quantitative goodwill impairment analyses performed, the Company compared the estimated fair values of each of its reporting units to their respective carrying amounts. The estimated fair values of each of the reporting units were derived using the income approach, specifically the DCF method. The discounted cash flow models used in the DCF Method analysis reflected the Company’s assumptions regarding revenue growth rates, forecast gross profit margins, operating expenses, capital expenditures, discount rates, terminal period growth rates, economic and market trends, and other expectations about the anticipated operating results of its reporting units. As part of the goodwill impairment test, the Company also considered its market capitalization and guideline public companies in assessing the reasonableness of the combined fair values estimated for its reporting units. Goodwill impairment is measured as the excess of a reporting unit's carrying amount over its estimated fair value, not to exceed the carrying amount of goodwill for that reporting unit. The results of the Company’s quantitative goodwill impairment analyses as of March 31, 2024 indicated an impairment of goodwill within its B Medical Systems reporting unit resulting in a non-cash impairment charge of $ 111.3 million recorded within " Impairment of goodwill and intangible assets " in its Condensed Consolidated Statements of Operations during the three months ended March 31, 2024. The Company concluded that there was no impairment to goodwill for the Sample Management Solutions and Multiomics reporting units as of March 31, 2024 or the annual impairment testing date of April 1, 2024. In the event the financial performance of any of the reporting units does not meet management’s expectations in the future, the Company experiences a prolonged macroeconomic downturn, or there are other negative revisions to key assumptions used in the DCF method used to value the reporting units, the Company may be required to perform additional impairment analyses with respect to such reporting units and could be required to recognize additional impairment charges. 75 Table of Contents The following table sets forth the changes in the carrying amount of goodwill by reportable segment that is consistent with the Company's operating segments effective October 1, 2023 ( in thousands): Life Sciences Products Life Sciences Services Sample Management Solutions Multiomics B Medical Systems Total Balance - September 30, 2022 $ 154,612 $ 359,011 $ — $ — $ — $ 513,623 Acquisitions 242,789 — — — 242,789 Currency translation adjustments 27,903 24 — — — 27,927 Balance - September 30, 2023 $ 425,304 $ 359,035 $ — $ — $ — $ 784,339 Segment recast (1) ( 425,304 ) ( 359,035 ) 478,601 196,760 108,978 — Impairment — — — — ( 111,317 ) ( 111,317 ) Currency translation adjustments — — 16,048 — 2,339 18,387 Balance - September 30, 2024 $ — $ — $ 494,649 $ 196,760 $ — $ 691,409 Accumulated goodwill impairments, September 30, 2024 $ - $ - $ - $ - $ ( 111,317 ) $ ( 111,317 ) ( 1 ) Changes to the Company’s operating segments effective October 1, 2023 resulted in a change to the Company’s reporting units. As a result of this segment realignment, the Company allocated goodwill to the reporting units existing under the new organizational structure on a relative fair value basis as of October 1, 2023. The components of the Company’s identifiable intangible assets as of September 30, 2024 and 2023 are as follows (in thousands): September 30, 2024 September 30, 2023 Accumulated Net Book Accumulated Net Book Cost Amortization Value Cost Amortization Value Patents $ 1,227 $ 1,227 $ — $ 1,226 $ 1,175 $ 51 Completed technology 224,487 82,736 141,751 215,430 56,021 159,409 Trademarks and trade names 6,988 3,133 3,855 6,630 1,445 5,185 Non-competition agreements — — — 681 568 113 Customer relationships 289,821 187,397 102,424 290,800 161,257 129,543 Other intangibles 683 683 — 869 869 — Total $ 523,206 $ 275,176 $ 248,030 $ 515,636 $ 221,335 $ 294,301 For further details regarding the goodwill and intangible assets obtained from the B Medical and Ziath acquisitions, please refer to Note 4, Business Combinations . During the second quarter of fiscal year 2024 , the Company discontinued its sample sourcing product offering (a product line within the Sample Management Solutions segment). As a result, the Company recorded a $ 4.7 million impairment of intangible assets related to the sample sourcing business within “Impairment of goodwill and intangible assets” in its Condensed Consolidated Statements of Operations during the three months ended March 31, 2024. Amortization expense for intangible assets was $ 51.3 million, $ 48.4 million, and $ 32.3 million, respectively, for the fiscal years ended September 30, 2024, 2023 and 2022 . Estimated future amortization expense for the intangible assets as of September 30, 2024 is as follows (in thousands): 2025 $ 50,051 2026 45,502 2027 37,285 2028 30,793 2029 25,007 Thereafter 59,392 Total $ 248,030 76 Table of Contents 9. Restructuring 2024 Restructuring Plan In the second quarter of fiscal year 2024 , the Company launched initiatives designed to optimize resources for future growth and improve efficiency across its organization. The focus of the initiatives is to improve the Company’s profitability, which includes facilities consolidation, portfolio optimization, and organization structure simplification. The Company expects to complete the activities included in these initiatives by the end of fiscal year 2026 . As of the date of issuance of the financial statements for the fiscal year ended September 30, 2024, the Company has not identified restructuring actions related to these initiatives that will result in additional material charges. The Company expects to identify additional actions as it further refines its plan, and the related initiatives in future periods will be recorded when specified criteria are met, including but not limited to, communication of benefit arrangements or when the costs have been incurred. The majority of the restructuring expenses associated with the initiatives described above for the fiscal year ended September 30, 2024 are severance and related costs, operating lease related ROU asset abandonment, and fixed assets and other asset write-offs. Of the total restructuring expenses in the fiscal year ended September 30, 2024, $ 5.3 million is related to B Medical Systems segment; $ 3.2 million is related to Sample Management Solutions segment; $ 3.3 million is the Company’s headquarters operating lease related ROU asset abandonment and corporate related severance costs. 2023 Cost Savings Plan In the second and third quarters of fiscal year 2023, the Company announced cost savings plans designed to position the Company to meet the needs of its customers and accelerate growth of the business. The majority of the restructuring expenses for fiscal years 2023 and 2022 are related to severance and related costs. The cost savings plans were completed and costs from the actions were fully realized by the end of the first quarter of fiscal year 2024. The following table presents restructuring charges recognized for the fiscal years ended September 30, 2024 and 2023 (in thousands): Year Ended September 30, 2024 2023 Severance and related costs $ 5,297 $ 4,577 Property, plant and equipment and other asset write-offs 4,430 — ROU asset abandonment 901 — Other 1,180 — Total restructuring charges $ 11,808 $ 4,577 The following table sets forth the activity in the severance and related costs accruals for the fiscal years ended September 30, 2024 and 2023 (in thousands): Year Ended September 30, 2024 2023 Balance at beginning of period $ 1,011 $ 462 Provisions and adjustments 5,297 4,577 Payments ( 5,351 ) ( 4,028 ) Balance at end of period $ 957 $ 1,011 77 Table of Contents 10. Leases The Company has operating and finance leases for real estate and other assets in North America, Europe, and Asia. Non-real estate leases are primarily related to vehicles and office equipment. Lease expiration dates range between 2024 and 2043. The components of lease expense for fiscal years 2024 and 2023 are as follows (in thousands): Year Ended September 30, 2024 2023 Operating lease costs $ 12,998 $ 12,435 Finance lease costs: Amortization of assets 706 620 Interest on lease liabilities 89 40 Total finance lease costs 795 660 Total operating and finance lease costs 13,793 13,095 Variable lease costs 3,568 3,251 Short-term lease costs 298 1,920 Total lease costs $ 17,659 $ 18,266 Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate): September 30, 2024 September 30, 2023 Operating Leases: Operating lease right-of-use assets $ 63,992 $ 66,580 Accrued expenses and other current liabilities $ 9,718 $ 9,499 Long-term operating lease liabilities 58,792 60,436 Total operating lease liabilities $ 68,510 $ 69,935 Finance Leases: Property, plant and equipment, at cost $ 5,557 $ 4,718 Accumulated amortization ( 3,694 ) ( 2,780 ) Property, plant and equipment, net $ 1,863 $ 1,938 Accrued expenses and other current liabilities $ 828 $ 677 Other long-term liabilities 1,338 1,361 Total finance lease liabilities $ 2,166 $ 2,038 Weighted average remaining lease term (in years): Operating leases 10.61 10.92 Finance leases 2.97 3.41 Weighted average discount rate: Operating leases 4.68 % 4.26 % Finance leases 4.57 % 2.76 % 78 Table of Contents Supplemental cash flow information related to leases is as follows (in thousands): Year Ended September 30, 2024 2023 Cash paid for amounts included in measurement of liabilities: Operating cash flows - operating leases $ 13,242 $ 10,949 Operating cash flows - finance leases $ 88 $ 40 Financing cash flows - finance leases $ 783 $ 578 ROU assets obtained in exchange for lease liabilities: Operating leases $ 9,032 $ 15,038 Finance leases $ 808 $ 1,813 Future lease payments for operating leases as of September 30, 2024 are as follows for the subsequent five fiscal years and thereafter (in thousands): Finance Leases Operating Leases 2025 $ 907 $ 12,661 2026 741 9,727 2027 455 9,265 2028 198 8,772 2029 17 7,521 Thereafter 3 41,009 Total future lease payments 2,321 88,955 Less imputed interest ( 155 ) ( 20,445 ) Total lease liability balance $ 2,166 $ 68,510 11. Supplementary Balance Sheet Information The following is a summary of accounts receivable at September 30, 2024 and 2023 (in thousands): September 30, 2024 2023 Accounts receivable $ 179,269 $ 164,592 Less allowance for expected credit losses ( 6,558 ) ( 8,057 ) Accounts receivable, net $ 172,711 $ 156,535 79 Table of Contents The allowance for expected credit losses for the fiscal years ended September 30, 2024, 2023 and 2022 is as follows (in thousands): Year Ended September 30, 2024 2023 2022 Balance at beginning of period $ 8,057 $ 5,162 $ 4,318 Provisions 7,250 8,849 3,536 Payments received ( 7,455 ) ( 5,884 ) ( 2,278 ) Write-offs and adjustments ( 1,294 ) ( 70 ) ( 414 ) Balance at end of period $ 6,558 $ 8,057 $ 5,162 The following is a summary of inventories at September 30, 2024 and 2023 (in thousands): September 30, 2024 2023 Raw materials and purchased parts $ 57,230 $ 59,861 Work-in-process 9,118 11,400 Finished goods 48,908 56,937 Total inventories $ 115,256 $ 128,198 The activity for excess and obsolete inventory reserves is as follows for the fiscal years ended September 30, 2024, 2023 and 2022 (in thousands): Year Ended September 30, 2024 2023 2022 Balance at beginning of period $ 4,991 $ 4,082 $ 3,681 Provisions 8,186 3,324 1,752 Inventory disposals and adjustments ( 3,022 ) ( 2,415 ) ( 1,351 ) Balance at end of period $ 10,155 $ 4,991 $ 4,082 The activity for valuation allowance for deferred tax assets is as follows for the fiscal years ended September 30, 2024, 2023 and 2022 (in thousands): Year Ended September 30, 2024 2023 2022 Balance at beginning of period $ 8,348 $ 5,927 $ 8,592 Charge to income tax provision (benefit) 37,677 1,137 1,337 Charged to other accounts 1,840 1,284 ( 4,002 ) Balance at end of period $ 47,865 $ 8,348 $ 5,927 80 Table of Contents The following is a summary of product warranty and retrofit activity on a gross basis for the fiscal years ended September 30, 2024, 2023 and 2022 (in thousands): Year Ended September 30, 2024 2023 2022 Balance at beginning of period $ 10,223 $ 2,890 $ 2,330 Adjustments for acquisitions and divestitures — 2,475 254 Accruals for warranties during the year 2,736 8,198 2,438 Costs incurred during the year ( 2,830 ) ( 3,340 ) ( 2,132 ) Balance at end of period $ 10,129 $ 10,223 $ 2,890 12. Stockholders ’ Equity Share Repurchases On November 4, 2022, the Company's Board of Directors approved an authorization to repurchase up to $ 1.5 billion of the Company's common stock (the “2022 Repurchase Authorization”). On November 23, 2022, pursuant to the 2022 Repurchase Authorization, the Company entered into an accelerated share repurchase (“ASR”) agreement for the repurchase of $ 500 million of its common stock. Under this agreement, which settled April 3, 2023, the Company repurchased and retired 10.1 million shares of its common stock for $ 500 million. In April 2023, other arrangements commenced under the 2022 Repurchase Authorization with the intent of repurchasing the remaining $ 1.0 billion of shares of the Company's common stock through open market repurchases. As of September 30, 2024, the Company has repurchased and retired 19.9 million shares of common stock for $ 1.0 billion in open market repurchases. Through the ASR agreement and open market repurchases, as of September 30, 2024, the Company has repurchased and retired 30.0 million shares of common stock for the full $ 1.5 billion approved under the 2022 Repurchase Authorization and no authorization is available for additional repurchases. All shares repurchased under the 2022 Repurchase Authorization were retired, accounted for as a reduction to stockholders’ equity in the Consolidated Balance Sheets and treated as a repurchase of common stock for purposes of calculating earnings per share as of the applicable settlement dates. 81 Table of Contents Effective January 1, 2023, all corporate share repurchases are subject to a one percent excise tax on the value of the repurchase, net of share issuances, subject to certain exclusions. The excise tax was part of The Inflation Reduction Act passed by the U.S. government in 2022. The Company accrued $ 6.5 million for excise tax related to share repurchases settled in fiscal year 2024, which is considered an additional cost of the share repurchases and a reduction to stockholders’ equity in the Consolidated Balance Sheets. Preferred Stock Total number of shares of preferred stock authorized for issuance was 1,000,000 shares at September 30, 2024 and 2023 . Preferred stock has a par value of $ 0.01 per share and may be issued at the discretion of the Board of Directors without stockholder approval with such designations, rights and preferences as the Board of Directors may determine. There were no shares of preferred stock issued or outstanding at September 30, 2024 or 2023 . Accumulated Other Comprehensive Income (Loss) The following is a summary of the components of accumulated other comprehensive income (loss), net of tax, at September 30, 2024, 2023 and 2022 (in thousands): Unrealized Gains (Losses) on Available- Gains (Losses) Currency for-Sale on Derivative Pension Translation Securities asset Liability Adjustments Net of tax Net of tax Adjustments Total Balance at September 30, 2021 $ 20,139 $ ( 1 ) $ - $ ( 787 ) $ 19,351 Other comprehensive income (loss) before reclassifications ( 169,266 ) ( 10,908 ) 93,020 412 ( 86,742 ) Amounts reclassified from accumulated other comprehensive income (loss) ( 16,567 ) — — 42 ( 16,525 ) Balance at September 30, 2022 ( 165,694 ) ( 10,909 ) 93,020 ( 333 ) ( 83,916 ) Other comprehensive income (loss) before reclassifications 77,246 5,774 ( 61,533 ) ( 104 ) 21,383 Amounts reclassified from accumulated other comprehensive income (loss) — — — 107 107 Balance at September 30, 2023 ( 88,448 ) ( 5,135 ) 31,487 ( 330 ) ( 62,426 ) Other comprehensive income (loss) before reclassifications 54,278 4,872 ( 10,019 ) ( 245 ) 48,886 Amounts reclassified from accumulated other comprehensive income (loss) — — — 76 76 Balance at September 30, 2024 $ ( 34,170 ) $ ( 263 ) $ 21,468 $ ( 499 ) $ ( 13,464 ) Unrealized gains (losses) on available-for-sale marketable securities are reclassified from “Accumulated other comprehensive income (loss)” into results of operations at the time of the securities’ sale, as described in Note 5, Marketable Securities . Amounts reclassified from accumulated other comprehensive income (loss) related to pension liability adjustments represent amortization of actuarial gains and losses. 82 Table of Contents 13. Revenue from Contracts with Customers Disaggregated Revenue The Company disaggregates revenue from contracts with customers in a manner that depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following is revenue by significant business line for the fiscal years ended September 30, 2024, 2023 and 2022 (in thousands): 2024 2023 2022 Significant Business Line Multiomics $ 254,552 $ 248,296 $ 250,937 Core Products (1) 196,732 192,061 199,230 Sample Repository Services 121,914 111,593 105,331 B Medical Systems 83,125 113,122 - Total revenue $ 656,323 $ 665,072 $ 555,498 ( 1 ) Core Products are Automated Stores, Cryogenic Systems, Automated Sample Tube, Consumables and Instruments and Controlled Rate Thawing Devices. Contract Balances Accounts Receivable, Net. Accounts receivable represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is unconditional and only the passage of time is required before payment is due. Accounts receivable do not bear interest and are recorded at the invoiced amount. The Company maintains an allowance for expected credit losses representing its best estimate of probable credit losses related to its existing accounts receivable and their net realizable value. The Company determines the allowance for expected credit losses based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends, historical experience, and other information through the payment periods. Accounts receivable, net were $ 172.7 million and $ 156.5 million at September 30, 2024 and 2023, respectively. Contract Assets. Contract assets represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is conditional on something other than the passage of time. These amounts typically relate to contracts where the right to invoice the customer is not present until completion of the contract or the achievement of specified milestones and the value of the products or services transferred exceed this constraint. Contract assets are classified as current as they are expected to convert to cash within one year. Contract asset balances which are included within “Prepaid expenses and other current assets” on the Company’s Consolidated Balance Sheet, were $ 29.2 million and $ 24.2 million at September 30, 2024 and 2023, respectively. Revenue of $ 18.8 million recognized during the year ended September 30, 2024 and $ 15.8 million recognized during the year ended September 30, 2023 contributed to the contract asset balances at September 30, 2024 and 2023, respectively. Contract Liabilities. Contract liabilities represent the Company’s obligation to transfer products or services to a customer for which consideration has been received, or for which an amount of consideration is due from the customer. Contract assets and liabilities are reported on a net basis at the contract level, depending on the contracts position at the end of each reporting period. Contract liabilities are included within “Deferred revenue” on the Company’s Consolidated Balance Sheet. Contract liabilities were $ 32.0 million, $ 34.6 million, and $ 39.7 million at fiscal years ended September 30, 2024, 2023 and 2022 , respectively. Revenue recognized from the contract liability balance at September 30, 2022 was $ 34.9 million for the year ended September 30, 2023 , and revenue recognized from the contract liability balance at September 30, 2023 was $ 27.8 million for the year ended September 30, 2024 . 83 Table of Contents Remaining Performance Obligations. Remaining performance obligations represent the transaction price of unsatisfied or partially satisfied performance obligations within contracts with an original expected contract term that is greater than one year and for which fulfillment of the contract has started as of the end of the reporting period. The aggregate amount of transaction consideration allocated to remaining performance obligations as of September 30, 2024 was $ 121.7 million. The following table summarizes when the Company expects to transfer control of the remaining performance obligations and recognize the corresponding revenue (in thousands): As of September 30, 2024 Less than 1 Year Greater than 1 Year Total Remaining performance obligations $ 92,130 $ 29,581 $ 121,711 Cost to Obtain and Fulfill a Contract The Company capitalizes sales commissions when incurred if they are (i) incremental costs of obtaining a contract, (ii) expected to be recovered and (iii) have an expected amortization period that is greater than one year. These amounts primarily relate to sales commissions and are being amortized over a 60 -month period, which represents the average period of contract performance. The capitalized sales commissions were $ 0.4 million and $ 0.5 million at September 30, 2024 and 2023 , respectively. All other sales commissions incurred during the reporting period have been expensed as incurred. These costs are recorded within “Selling, general and administrative” expenses on the Company’s Consolidated Statement of Operations. The Company accounts for shipping and handling activities as fulfillment activities and recognize the associated expense when control of the product has transferred to the customer. 14. Stock Based Compensation In accordance with the 2020 Equity Incentive Plan, the Company may issue eligible employees options to purchase shares of the Company’s common stock, restricted stock units and other equity incentives, which vest upon the satisfaction of a performance condition and/or a service condition. In addition, the Company issues common stock to participating employees pursuant to an employee stock purchase plan, and may issue common stock awards and deferred restricted stock units to members of its Board of Directors in accordance with its Board of Directors compensation program. 2020 Equity Incentive Plan In accordance with the 2020 Equity Incentive Plan (the “2020 Plan”), the Company may grant employees (i) restricted stock and other stock-based awards, (ii) nonqualified stock options, and (iii) options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code. All employees of the Company or any affiliate of the Company, independent directors, consultants and advisors are eligible to participate in the 2020 Plan. The 2020 Plan provides for the issuance of an aggregate of 2,800,000 shares of common stock, including 2,500,000 shares reserved for issuance pursuant to the 2020 Plan, and up to 300,000 additional shares which may be issued pursuant to the 2020 Plan if outstanding awards granted under the Company’s previous 2000 Plan or the Company’s previous 2015 Plan are forfeited, expire or are cancelled. The following table reflects stock-based compensation expense recorded during the fiscal years ended September 30, 2024, 2023 and 2022 (in thousands): Year Ended September 30, 2024 2023 2022 Restricted stock units $ 13,222 $ 8,027 $ 10,597 Employee stock purchase plan 1,245 1,349 1,846 Total stock-based compensation expense for continuing and discontinued operations $ 14,467 $ 9,376 $ 12,443 Income tax benefit ( 2,025 ) ( 1,406 ) ( 1,929 ) Total compensation expense included in the statement of operations $ 12,442 $ 7,970 $ 10,514 84 Table of Contents Restricted Stock Unit Activity The following table summarizes restricted stock unit activity for the fiscal year ended September 30, 2024 : Weighted Average Shares Grant Date (in thousands) Fair Value Outstanding as of September 30, 2023 718,954 $ 67.40 Granted 665,893 $ 55.15 Vested ( 182,895 ) $ 68.23 Forfeited ( 437,841 ) $ 61.94 Outstanding as of September 30, 2024 764,111 $ 59.65 The fair value of restricted stock units vested during fiscal years 2024 , 2023 and 2022 was $ 10.2 million, $ 14.8 million, and $ 66.9 million, respectively. As of September 30, 2024 , the future unrecognized stock-based compensation expense related to restricted stock units expected to vest is $ 19.1 million and is expected to be recognized over an estimated weighted average amortization period of 1.5 years. The following table reflects restricted stock units and stock awards granted during fiscal years ended September 30, 2024, 2023 and 2022 : Year Ended September 30, 2024 2023 2022 Time-based restricted stock units 282,268 311,609 120,066 Common stock awards — — 18,471 Performance-based restricted stock units 383,625 278,457 111,148 Total units 665,893 590,066 249,685 Time-Based Restricted Stock Unit Grants Restricted stock units granted with a required service period typically have three -year vesting schedules in which one - third of awards vest at each annual anniversary of grant date, subject to the award holders meeting service requirements. Certain members of the Board of Directors have elected to defer receiving their annual stock awards and related quarterly dividends, if any, until they attain a certain age or cease to provide services as a member of the Company’s Board of Directors. Annual deferred stock awards granted during fiscal years 2024 , 2023 , and 2022 vested upon issuance. 85 Table of Contents Performance-Based Restricted Stock Unit Grants Performance-based restricted stock units are earned based on the achievement of performance criteria established by the Human Resources and Compensation Committee and approved by the Board of Directors. The criteria for performance-based awards are weighted and have threshold, target and maximum performance goals. Performance-based restricted stock units may also have a required service period following the achievement of all or a portion of the performance goals. Performance-based restricted stock unit awards granted in fiscal year 2024 , 2023 and 2022 allow participants to earn 100 % of restricted stock units if the Company’s performance meets or exceeds its target goal for each applicable financial metric, and up to a maximum of 200 % if the Company’s performance for such metrics meets or exceeds the maximum or stretch goal. Performance below the minimum threshold for each financial metric results in award forfeiture. Performance goals are measured over a three -year period for each year’s restricted stock unit awards and at the end of the period to determine the number of restricted stock units earned, if any, by recipients who continue to meet the service requirement. Upon the third anniversary of each year’s restricted stock unit awards’ grant date, the Company’s Board of Directors determines the number of restricted stock units earned for participants who continue to meet the service requirements on the vest date. In October 2023, the Company’s Board of Directors approved an amendment to the performance goals associated with the previously issued performance-based restricted stock units for all impacted employees, excluding members of the Company’s executive team. The performance goals, as amended, are more reflective of the current macroeconomic environment and consideration toward employee retention in the competitive life sciences industry. Before the amendment, the original performance goals were not expected to be satisfied. Subsequent to the amendment, vesting became probable based on the forecasted achievement of the amended performance goals. The amendment of these restricted stock units is treated as a modification with the total potential maximum compensation cost of $ 4.1 million recognized over the service period through November 2025. The Company recorded expense of $ 1.2 million during the fiscal year ended September 30, 2024 related to the modified awards. Awards Granted to the Board of Directors The stock-based compensation granted to members of the Company’s Board of Directors includes common stock awards, restricted stock unit awards and deferred common stock and restricted stock unit awards. Employee Stock Purchase Plan The Company maintains an employee stock purchase plan that allows its employees to purchase shares of common stock at a price equal to 85 % of the fair market value of the Company’s stock at the beginning or the end of the semi-annual offering period, whichever is lower. On February 8, 2017, the stockholders approved the 2017 Employee Stock Purchase Plan (the “2017 Plan”). The 2017 Plan allows for purchases by employees of up to 1,250,000 shares of the Company’s common stock. As of September 30, 2024 , 513,634 shares of common stock remain available for purchase under the 2017 Plan. During the fiscal years ended September 30, 2024, 2023 and 2022 , the Company issued 72,787 shares, 83,715 shares, and 82,035 shares respectively, under the 2017 Plan. Valuation Assumptions for an Employee Stock Purchase Plan The fair value of shares issued under the employee stock purchase plan is estimated on the commencement date of each offering period using the Black-Scholes option-pricing model with the following weighted average assumptions for the fiscal years ended September 30, 2024, 2023 and 2022 : Year Ended September 30, 2024 2023 2022 Risk-free interest rate 5.3 % 5.2 % 1.7 % Volatility 47 % 57 % 49 % Expected life 6 months 6 months 6 months Dividend yield — % — % — % The risk-free rate is based on the U.S. Treasury yield curve for notes with terms approximating the expected life of the shares granted. The expected stock price volatility is determined based on the Company’s historic stock prices over a period commensurate with the expected life of the shares granted. The expected life represents the weighted average period over which the shares are expected to be purchased. Dividend yields are projected based on the Company’s history of dividend declarations and management’s intention for future dividend declarations. 86 Table of Contents 15. Fair Value Measurements Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables summarize assets and liabilities measured and recorded at fair value on a recurring basis in the accompanying Consolidated Balance Sheets as of September 30, 2024 and 2023 (in thousands): As of September 30, 2024 Description Total Fair Value Level 1 Level 2 Level 3 Assets: Cash equivalents $ 157,990 $ 157,990 $ — $ — Available-for-sale securities 198,616 37,584 161,032 — Convertible debt securities 2,000 — — 2,000 Foreign exchange contracts 9 — 9 — Total assets $ 358,615 $ 195,574 $ 161,041 $ 2,000 Liabilities: Net investment hedge 1,915 — 1,915 — Foreign exchange contracts 213 — 213 — Total liabilities $ 2,128 $ — $ 2,128 $ — As of September 30, 2023 Description Total Fair Value Level 1 Level 2 Level 3 Assets: Cash equivalents $ 525,952 $ 525,952 $ — $ — Available-for-sale securities 450,211 85,949 364,262 — Foreign exchange contracts 44 — 44 — Net investment hedge 13,036 — 13,036 — Total assets $ 989,243 $ 611,901 $ 377,342 $ — Liabilities: Foreign exchange contracts 421 — 421 — Total liabilities $ 421 $ — $ 421 $ — Cash Equivalents Cash equivalents consist of money market funds and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The Company considers all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. 87 Table of Contents Available-For-Sale Securities Available-for-sale securities primarily consist of highly rated corporate debt securities and U.S. government backed securities which are classified as Level 1. Investments classified as Level 2 consist of debt securities that are valued using matrix pricing and benchmarking because they are not actively traded, and bank certificates of deposit. Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices. Convertible Debt Securities In the third quarter of fiscal year 2024, the Company purchased $ 2.0 million principal amount of convertible notes issued by a private company. The convertible notes are loans to convert to an equity stake in the private company upon a predetermined conversion event. The Company has elected the fair value option in accordance with ASC 825, Financial Instruments (“ASC 825” ) to record the convertible notes. The fair value option under ASC 825 allows an entity to account for the entire financial instrument at fair value with subsequent changes in fair value recognized in earnings through the consolidated statements of operations at each reporting date. The Company elected the fair value option methodology to account for the convertible notes because the Company believes it accurately reflects the value of the securities and embedded features in the financial instrument. As of September 30, 2024 , the fair value of the convertible notes was $ 2.0 million and is included in “Short-term marketable securities” on the Consolidated Balance Sheets. The fair value determination is based on unobservable inputs (Level 3 on the fair value hierarchy) which were based on the best information available in the circumstance, including transaction pricing, recent acquisition, and market participant assumptions. The unobservable inputs used in the determination of the fair value of assets classified as Level 3 have an inherent measurement uncertainty that if changed could result in higher or lower fair value measurements of the assets as of the reporting date. Foreign Exchange Contracts & Net Investment Hedge Our foreign exchange contract assets and liabilities, and our net investment hedge assets and liabilities are measured and reported at fair value using the market method valuation technique. The inputs to this technique utilize current foreign currency exchange forward market rates published by third -party leading financial news and data providers. These are observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they are not based on actual transactions, so they are classified as Level 2. 88 Table of Contents Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis In addition to assets and liabilities that are recorded at fair value on a recurring basis, impairment indicators may subject goodwill and long-lived assets to fair value measurement on a nonrecurring basis. As described in Note 8 , Goodwill and Intangible Assets, as of September 30, 2024, the Company estimated the fair value of its reporting units using the DCF Method. Because the inputs to the valuation method are largely unobservable and reflect the Company’s own assumptions, goodwill and long-lived assets are classified as Level 3 . Contingent Consideration Liability The contingent consideration liability related to the acquisition of B Medical was measured and reported at fair value using the real options method based on the unobservable inputs that were significant to the fair value and classified with Level 3 of the fair value hierarchy. The contingency was based on the acquired business’ performance through September 30, 2023. Please refer to Note 4, Business Combinations for further details. This liability was revalued from $ 18.5 million as of December 31, 2022 to zero as of June 30, 2023, with the offset to the changes in fair value recorded in the Consolidated Statements of Operations during the fiscal year ended September 30, 2023. 16. Income Taxes The components of the income tax (benefit) expense from continuing operations for the fiscal years are as follows (in thousands): Year Ended September 30, 2024 2023 2022 Current income tax (benefit) expense Federal $ 227 $ ( 599 ) $ ( 4,826 ) State 1,482 1,528 607 Foreign 11,224 9,757 4,627 Total current income tax (benefit) expense 12,933 10,686 408 Deferred income tax (benefit) expense: Federal ( 5,457 ) ( 18,684 ) ( 815 ) State 313 ( 402 ) ( 180 ) Foreign ( 10,942 ) ( 9,150 ) 1,937 Total deferred income tax (benefit) expense ( 16,086 ) ( 28,236 ) 942 Income tax (benefit) expense $ ( 3,153 ) $ ( 17,550 ) $ 1,350 The components of income (loss) from continuing operations before income taxes for the fiscal years are as follows (in thousands): Year Ended September 30, 2024 2023 2022 Domestic $ ( 46,093 ) $ ( 58,065 ) $ ( 39,392 ) Foreign ( 121,230 ) 27,632 29,456 Loss before income taxes $ ( 167,323 ) $ ( 30,433 ) $ ( 9,936 ) 89 Table of Contents The differences between the income tax (benefit) expense on income (loss) from continuing operations and income taxes computed using the applicable U.S. statutory federal tax rates for the fiscal years ended September 30, 2024, 2023 and 2022 are as follows (in thousands): Year Ended September 30, 2024 2023 2022 Income tax benefit computed at federal statutory rate $ ( 35,138 ) $ ( 6,331 ) $ ( 2,086 ) State income taxes, net of federal benefit ( 836 ) ( 851 ) ( 776 ) Foreign income taxed at different rates ( 6,160 ) ( 22 ) ( 1,182 ) Impact of investments in subsidiaries ( 22,583 ) ( 6,058 ) — Nontaxable gain from acquisition earn-out liability reversal — ( 3,959 ) — Change in deferred tax asset valuation allowance 37,677 1,137 1,337 Impact of change in uncertain tax positions 36 ( 1,321 ) ( 358 ) Global intangible low taxed income, net of foreign tax credits — — 4,060 Impact of tax rate changes ( 46 ) ( 1,391 ) 1,531 Compensation 1,563 1,598 ( 1,199 ) Tax credits ( 1,199 ) ( 1,434 ) ( 2,102 ) Merger costs — 1,056 1,629 Other non-deductible expenses and other taxes 1,426 1,304 643 Impact of effective state tax rate change — — 763 Goodwill impairment 23,444 — — Research and development expense deduction ( 1,337 ) ( 1,278 ) ( 910 ) Income tax (benefit) expense $ ( 3,153 ) $ ( 17,550 ) $ 1,350 During the fiscal year 2024, the Company repatriated approximately $ 455.0 million of cash from its German subsidiary. The Company recorded a net tax benefit in the amount of $ 3.2 million related to the repatriation. The benefit included $ 5.2 million related to deductible U.S. foreign exchange losses measured at the foreign exchange rate on the date of repatriation. This benefit was offset by $ 2.0 million of state income taxes, net of federal benefit. The tax provision impacts in fiscal year 2024 were offset by the reversal of the related deferred tax asset recorded in fiscal year 2023. Additionally, during fiscal year 2024, the Company reversed $ 2.9 million of the deferred tax asset previously established due to changes in foreign exchange rates up to the repatriation date. The impact was recorded against other comprehensive income. During fiscal year 2024, the Company recorded a goodwill impairment charge related to the B Medical Systems segment. This impairment charge is not deductible for tax purposes. For tax purposes the Company has estimated that Azenta Luxembourg, the owner of B Medical Systems, would have a deductible impairment of its investment in the business, which is a significant component of the $22.6 million rate reconciliation benefit for “Impact of investments in subsidiaries” above. This tax deduction puts Luxembourg into a valuation allowance position as it does not have sufficient taxable income to utilize the loss, therefore driving a significant increase in the valuation allowance. The Company has not provided deferred income taxes on the outside basis differences of any other foreign subsidiary and maintains its general assertion of indefinite reinvestment regarding those subsidiaries and the remaining earnings of its German subsidiary as of September 30, 2024. The remaining foreign earnings total approximately $ 899.7 million as of September 30, 2024 and are expected to be reinvested in foreign operations and acquisitions. The Company did not calculate estimated deferred tax liabilities on the remaining earnings because such calculations would not be practicable due to the complexity of its hypothetical calculation. The taxes on these earnings would primarily consist of foreign withholding taxes, taxes on foreign exchange gains and losses resulting from potential future distributions, and U.S. state income taxes. Substantially all of the unremitted earnings of the Company have been taxed in the U.S. based on the international tax regulations. 90 Table of Contents The significant components of the net deferred tax assets and liabilities as of September 30, 2024 and 2023 are as follows (in thousands): September 30, 2024 2023 Accruals and reserves not currently deductible $ 10,314 $ 10,426 Federal, state and foreign tax credits 1,151 157 Other assets 1,048 613 Equity compensation 2,359 2,183 Net operating loss carryforwards 49,687 9,692 Lease liabilities 16,774 17,513 Capitalized research and development 8,050 6,807 Deferred revenue 3,573 3,672 Outside basis differences in subsidiaries — 6,058 Deferred tax assets 92,956 57,121 Depreciation and intangible amortization ( 82,732 ) ( 97,572 ) Right-of-use assets ( 15,662 ) ( 16,632 ) Other liabilities ( 605 ) ( 317 ) Net unrealized gain on hedging and investments — ( 1,574 ) Deferred tax liabilities ( 98,999 ) ( 116,095 ) Valuation allowance ( 47,865 ) ( 8,348 ) Net deferred tax asset (liability) $ ( 53,908 ) $ ( 67,322 ) The deferred tax assets on the balance sheets for September 30, 2024 and 2023 also include $ 0.6 million and $ 0.6 million deferred tax charges related to the company’s intercompany profit elimination, respectively. ASC Topic 740 requires that all available evidence, both positive and negative, be considered in determining, based on the weight of that evidence, whether a valuation allowance is needed. The weight given to the potential effect of negative and positive evidence should be commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, (a) the more positive evidence is necessary and (b) the more difficult it is to support a conclusion that a valuation allowance is not needed for some portion or the entire deferred tax asset. The Company evaluates the realizability of its deferred tax assets and assesses the need for a valuation allowance on a quarterly basis. The Company operates in numerous countries under many legal forms and, as a result, is subject to the jurisdiction of numerous domestic and foreign tax authorities. The Company evaluates the profitability of its operations in each jurisdiction on a historic cumulative basis and on a forward-looking basis, while carefully considering carry-forward periods of tax attributes and ongoing tax planning strategies in assessing the need for the valuation allowance. The Company has generated U.S. pre-tax losses in recent years but has been in an overall U.S. deferred tax liability position. As of September 30, 2024, the Company is in a net U.S. deferred tax asset position and considered whether the future taxable temporary differences are sufficient to offset future deductible temporary differences. As a result, an additional valuation allowance was recorded against U.S. federal and state deferred tax assets during fiscal year 2024. After evaluating all the relevant positive and negative evidence, the Company has recorded a $ 5.6 million valuation allowance against deferred tax assets in the United States during the year. The Company also maintains valuation allowances against net deferred tax assets in certain foreign jurisdictions totaling $ 40.2 million as of September 30, 2024. A full valuation allowance was recorded in the Company's Luxembourg subsidiary related to the B Medical business during fiscal year 2024 in the amount of $ 29.5 million. 91 Table of Contents As of September 30, 2024 , the Company has tax-effected federal, state and foreign net operating loss carry-forwards of approximately $ 5.8 million, $ 1.6 million and $ 42.2 million, respectively. The federal net operating losses carry forward indefinitely with the deductions limited to eighty percent of taxable income in any given year. The state net operating loss carry-forwards will begin to expire in 2026. Many of the foreign net operating loss carry-forwards have no limit in number of years, but some have deductions capped at a certain percent of taxable income. The Company has performed studies to determine if there are any annual limitations on the federal net operating losses under Section 382 of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. As a result of these studies, the Company has determined that ownership changes have occurred primarily in connection with acquisitions when the Company has issued stock to the sellers, as well as ownership changes in the subsidiaries acquired by the Company. The benefits of the net operating losses that will expire before utilization have not been recorded as deferred tax assets in the accompanying Consolidated Balance Sheets. The Company maintains liabilities for unrecognized tax benefits. These liabilities involve judgment and estimation, and they are monitored based on the best information available. A reconciliation of the beginning and ending amount of the consolidated liability for unrecognized income tax benefits during the fiscal years ended September 30, 2024, 2023 and 2022 is as follows (in thousands): Year Ended September 30, 2024 2023 2022 Balance at beginning of period $ 298 $ 1,679 $ 2,006 Reductions from lapses in statutes of limitation — ( 1,381 ) ( 327 ) Balance at end of period $ 298 $ 298 $ 1,679 All of the unrecognized tax benefits for the fiscal year ended September 30, 2024 would impact the effective tax rate if recognized. The Company recognizes interest related to unrecognized benefits as a component of the income tax (benefit) expense which was not material for the fiscal years ended September 30, 2024, 2023 and 2022 . The Company is subject to U.S. federal, state, local and foreign 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 income tax audits in various global jurisdictions in which it operates. The years subject to examination vary for the United States and international jurisdictions, with the earliest tax year being 2019. 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 Consolidated Balance Sheets. The Company currently anticipates that it is reasonably possible that the unrecognized tax benefits and accrued interest on those benefits will be reduced by $ 0.3 million in the next 12 months due to statute of limitations expirations. The unrecognized tax benefits would impact the effective tax rate if recognized. 92 Table of Contents 17. Net Income (Loss) per Share The following table shows the computation of basic and diluted loss (income) per share for the fiscal years ended September 30, 2024, 2023 and 2022 (in thousands, except per share data): Year Ended September 30, 2024 2023 2022 Loss from continuing operations $ ( 164,170 ) $ ( 12,883 ) $ ( 11,286 ) (Loss) income from discontinued operations, net of tax — ( 1,374 ) 2,144,145 Net (loss) income ( 164,170 ) ( 14,257 ) 2,132,859 Weighted average common shares outstanding used in computing basic (loss) income per share 53,175 66,253 74,897 Weighted average common shares outstanding used in computing diluted (loss) income per share 53,175 66,253 74,897 Basic net (loss) income per share: Loss from continuing operations $ ( 3.09 ) $ ( 0.19 ) $ ( 0.15 ) (Loss) income from discontinued operations, net of tax — ( 0.02 ) 28.63 Basic net (loss) income per share $ ( 3.09 ) $ ( 0.22 ) $ 28.48 Diluted net (loss) income per share: Loss from continuing operations $ ( 3.09 ) $ ( 0.19 ) $ ( 0.15 ) (Loss) income from discontinued operations, net of tax — ( 0.02 ) 28.63 Diluted net (loss) income per share $ ( 3.09 ) $ ( 0.22 ) $ 28.48 18. Segment and Geographic Information Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and to assess performance. The Company’s Chief Executive Officer is the Company’s CODM. Effective October 1, 2023, the Company realigned its organizational structure to three principal business segments to enhance its commercial strategy for accelerating growth and to enable additional profitability initiatives. These segments align with changes in how the Company’s CODM manages the business, allocates resources, and assesses performance. The Company’s operating and reportable segments consist of the following: ● Sample Management Solutions . The SMS business resources operate as a single business unit offering end-to-end sample management products and services, including: Sample Repository Services and Core Products (Automated Stores, Cryogenic Systems, Automated Sample Tube, Consumables and Instruments and Controlled Rate Thawing Devices). ● Multiomics . The Multiomics business resources operate as a single business unit offering genomic and other sample analysis services, including gene sequencing, synthesis editing and related services. ● B Medical Systems . The B Medical Systems business resources operate as a single business unit focused on the manufacturing and distribution of temperature-controlled storage and transportation solutions in international markets to governments, health institutions, and non-government organizations. 93 Table of Contents The segment realignment had no impact on the Company’s consolidated financial position, results of operations, or cash flows. All segment information is reflective of this new structure, and prior period information has been recast to conform to our current period presentation. Management considers adjusted operating income (loss), which excludes charges related to amortization of intangible assets, purchase accounting impact on inventory, transformation and rebranding costs, restructuring charges, goodwill and intangible asset impairment, fair value adjustments to contingent consideration, merger and acquisition costs and costs related to share repurchase, governance-related matters, and other unallocated corporate expenses, as the primary performance metric when evaluating each segment’s operations. The following is the summary of the financial information for the Company’s reportable segments for the fiscal years ended September 30, 2024, 2023 and 2022 (in thousands): Year Ended September 30, 2024 2023 2022 Revenue: Sample Management Solutions $ 318,646 $ 303,654 $ 304,561 Multiomics 254,552 248,296 250,937 B Medical Systems 83,125 113,122 - Total revenue $ 656,323 $ 665,072 $ 555,498 Adjusted operating income (loss): Sample Management Solutions $ 10,841 $ ( 2,349 ) $ 23,970 Multiomics ( 7,995 ) ( 13,779 ) 5,032 B Medical Systems ( 5,669 ) 919 — Segment adjusted operating income (loss) ( 2,823 ) ( 15,209 ) 29,002 Amortization of completed technology 24,770 18,494 7,324 Purchase accounting impact on inventory — 9,664 — Amortization of intangible assets other than completed technology 26,500 29,884 24,965 Transformation (1) and rebranding costs 13,856 ( 49 ) 2,741 Restructuring charges 11,808 4,577 712 Impairment of goodwill and intangible assets 115,975 — — Contingent consideration - fair value adjustments — ( 18,549 ) 600 Merger and acquisition costs and costs related to share repurchase (2) 4,874 13,842 17,329 Other unallocated corporate expenses 72 54 66 Total operating loss ( 200,678 ) ( 73,126 ) ( 24,735 ) Interest income, net 33,177 43,735 15,697 Other income (expense), net 178 ( 1,042 ) ( 898 ) Loss before income taxes $ ( 167,323 ) $ ( 30,433 ) $ ( 9,936 ) ( 1 ) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company’s operations, processes and systems to permanently alter the Company’s operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company’s 2024 cost reduction plan, and primarily relate to one time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third -party consulting costs associated with process and systems re-design. ( 2 ) Includes expenses related to governance-related matters. The Company has corrected the segment adjusted operating income (loss) for the years ended September 30, 2023 and 2022 as certain corporate expenses that are not part of the Company’s CODM’s review of operating segment performance were improperly included in the previously disclosed segment operating income (loss) performance measure. As a result, the presentation of amounts previously disclosed for segment operating income (loss) were updated to reflect segment adjusted operating income (loss) after having been adjusted to remove these corporate expenses. These adjustments reduced total segment adjusted operating loss for fiscal year 2023 by $ 29.8 million and increased total segment adjusted operating income for fiscal year 2022 by $ 7.2 million. The total net loss before income taxes remained unchanged. 94 Table of Contents The following is the summary of the asset information for the Company's reportable segments as of September 30, 2024 and 2023 (in thousands): Assets: September 30, 2024 September 30, 2023 Sample Management Solutions $ 859,353 $ 675,708 Multiomics 462,825 534,437 B Medical Systems 231,601 511,640 Total assets $ 1,553,779 $ 1,721,785 The following is a reconciliation of the segment assets to the corresponding amounts presented in the Consolidated Balance Sheets as of September 30, 2024 and 2023 (in thousands): September 30, September 30, 2024 2023 Segment assets $ 1,553,779 $ 1,721,785 Cash and cash equivalents, restricted cash, and marketable securities 521,606 1,134,256 Deferred tax assets 837 571 Other assets 23,819 29,108 Total assets $ 2,100,041 $ 2,885,720 Revenue from external customers is attributed to geographic areas based on locations in which the product is shipped. Net revenue by geographic area for the fiscal years ended September 30, 2024, 2023 and 2022 are as follows (in thousands): Year Ended September 30, 2024 2023 2022 Geographic Location: United States $ 366,209 $ 355,094 $ 358,208 Africa 61,962 65,092 1,331 China 58,260 51,787 53,867 United Kingdom 27,451 26,764 30,258 Rest of Europe 102,771 109,856 79,005 Asia Pacific/ Other 39,670 56,479 32,829 Total revenue $ 656,323 $ 665,072 $ 555,498 Net property, plant and equipment by geographic area as of September 30, 2024 and 2023 is as follows (in thousands): September 30, 2024 2023 United States $ 75,242 $ 78,533 China 52,826 53,146 Europe 71,690 70,654 Asia Pacific/ Other 2,896 3,411 Total property, plant, and equipment, net $ 202,654 $ 205,744 Significant Customers The Company had one customer that accounted for 10 % and 13 % of the Company's consolidated revenue for fiscal years 2024 and 2023, respectively; this customer is related to the B Medical Systems segment and is a distributor shipping to end users in approximately 40 countries. There were no customers that accounted for 10% or more of the Company's consolidated revenue for fiscal year 2022. As of September 30, 2024, 2023 and 2022 there were no customers that accounted for 10% or more of the Company’s accounts receivable balance. 95 Table of Contents 19. Commitments and Contingencies Contingencies The Company is subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. The Company cannot predict the ultimate outcome of such legal proceedings or, in certain instances, provide reasonable ranges of potential losses. The Company may also have certain indemnification obligations pursuant to claims made under the definitive agreement it entered into with Edwards Vacuum LLC (a member of the Atlas Copco Group) in connection with the Company’s sale of its semiconductor cryogenics business in the fourth quarter of fiscal year 2018. In the third quarter of fiscal year 2020, Edwards asserted claims for indemnification under the definitive agreement relating to alleged breaches of representations and warranties relating to customer warranty claims and inventory (the “2020 Claim”). In addition, in January 2023, Edwards filed a lawsuit against the Company in the Supreme Court of the State of New York in the County of New York seeking indemnification from the Company under such definitive agreement for $ 1.0 million and other related damages, including interest and attorney’s fees, arising from a third -party claim that was included as part of their initial claims (the “2023 Claim”). In April 2023, the Company responded to and filed a counterclaim against Edwards for the 2023 Claim alleging breach of the definitive agreements by Edwards and seeking a declaratory judgment. During the third quarter of fiscal year 2023, the Company and Edwards entered into a settlement agreement related to the 2023 Claim to avoid the costs and uncertainties of potential litigation. Under the settlement agreement, the Company paid Edwards $ 0.8 million from one of the indemnification escrows established at closing of the sale in return for the release of the 2023 Claim and the release to the Company of any residual funds in this escrow. The Company accrued a liability of $ 2.5 million for the 2020 Claim and 2023 Claim of which $ 0.8 million was paid during the third quarter of fiscal year 2023. The 2020 Claim remains outstanding and $ 1.7 million remains in the balance of the accrued liability as of September 30, 2024. The Company cannot determine the probability of any losses or outcome of the 2020 Claim including the amount of any indemnifiable losses, if any, resulting from these claims. However, the Company does not believe that this claim will have a material adverse effect on its consolidated financial position or results of operations. If the resolution of the 2020 Claim results in indemnifiable losses in excess of the applicable indemnification deductibles established under the definitive agreement, Edwards would be required to seek recovery under the representation and warranty insurance Edwards obtained in connection with the closing of the sale of the semiconductor cryogenics business. Management believes that any indemnifiable losses in excess of the applicable deductibles established in the definitive agreement would be covered by such insurance. For indemnifiable claims other than those arising from breaches of representations and warranties and for indemnifiable claims arising from breaches of representations and warranties exceeding the maximum coverage of the representations and warranties insurance policy, Edwards could seek recovery of such indemnifiable losses, if any, directly from the Company. In the event of unexpected subsequent developments and given the inherent unpredictability of these matters, there can be no assurance that the Company’s assessment of any claim will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated financial position or results of operations in particular quarterly or annual periods. Tariff Matter With the assistance of a third -party consultant, during the first quarter of fiscal year 2021, the Company initiated a review of the value of transactions it used for intercompany imports into the U. S. from its GENEWIZ business. As a result of this review and a new interpretation surrounding the valuation method used to calculate the estimated transaction value, the Company revised its estimate of the tariffs owed and paid $ 5.9 million to the U.S. customs authorities in fiscal year 2022 related to transactions prior to December 2021. In July 2024, the Company paid approximately $ 2.5 million in tariffs as well as interest related to the imports from its GENEWIZ business into the U.S. during the period of December 2021 to July 2024. As of the date of issuance of the financial statements for the fiscal year ended September 30, 2024, the Company does not anticipate any penalties associated with this payment as its valuation methodology was accepted by U.S. customs authorities during previous voluntary disclosures. U.S. custom authorities, however, have six months to review the Company’s disclosures and the amount of the payment. Purchase Commitments At September 30, 2024 , the Company had non-cancellable commitments of $ 69.9 million, comprised of purchase orders for inventory of $ 53.1 million, and information technology related commitments of $ 16.8 million. 96 Table of Contents 20. Subsequent Events On November 12, 2024, the Company announced it is pursuing a sale of its B Medical Systems segment. The Company has concluded that, as of November 12, 2024, B Medical Systems is a discontinued operation and will be classified as held for sale in future filings. The Company is unable to provide an estimate of the financial impact of a sale transaction. On November 12, 2024, the Company appointed Lawrence Lin as its Executive Vice President and Chief Financial Officer, effective after the filing of this Annual Report on Form 10 -K, to succeed the Company’s current Executive Vice President and Chief Financial Officer, Herman Cueto, who is departing from his role at the Company. After the filing of this Annual Report on Form 10 -K, Mr. Cueto will remain with the Company as an employee advisor through December 1, 2024, and thereafter as a consultant to facilitate the transition. 21. Revision of Previously Issued Unaudited Quarterly Information The Condensed Consolidated Statements of Cash Flows for the interim periods ended March 31, 2023, June 30, 2023, December 31, 2023, March 31, 2024, and June 30, 2024 have been revised to correct for prior period errors as discussed in Note 2, Summary of Significant Accounting Policies. The effect on the Condensed Consolidated Statement of Cash Flows for each affected period is as follows (in thousands): Nine months ended June 30, 2023 (unaudited) As Reported Adjustments As Revised Cash flows from operating activities Accrued compensation and tax withholdings $ ( 15,830 ) $ ( 1,852 ) $ ( 17,682 ) Other current assets and liabilities ( 36,578 ) 2,634 ( 33,944 ) Net cash used in operating activities $ ( 22,422 ) $ 782 $ ( 21,640 ) Cash flows from financing activities Proceeds from issuance of common stock $ - $ 1,852 $ 1,852 Net cash used in financing activities $ ( 677,221 ) $ 1,852 $ ( 675,369 ) Effects of exchange rate changes on cash and cash equivalents $ 65,610 $ ( 2,634 ) $ 62,976 Supplemental disclosures: Purchases of property, plant and equipment included in accounts payable and accrued expenses $ - $ 2,898 $ 2,898 97 Table of Contents Six months ended March 31, 2023 (unaudited) As Reported Adjustments As Revised Cash flows from operating activities Accrued compensation and tax withholdings $ ( 21,797 ) $ ( 1,852 ) $ ( 23,649 ) Net cash used in operating activities $ ( 39,170 ) $ ( 1,852 ) $ ( 41,022 ) Cash flows from financing activities Proceeds from issuance of common stock $ - $ 1,852 $ 1,852 Net cash used in financing activities $ ( 505,136 ) $ 1,852 $ ( 503,284 ) Supplemental disclosures: Purchases of property, plant and equipment included in accounts payable and accrued expenses $ - $ 3,040 $ 3,040 Nine months ended June 30, 2024 (unaudited) As Reported Adjustments As Revised Cash flows from operating activities Inventories $ 11,433 $ 2,674 $ 14,107 Other assets and liabilities 7,484 ( 7,101 ) 383 Net cash provided by operating activities $ 36,578 $ ( 4,427 ) $ 32,151 Cash flows from investing activities Purchase of property, plant and equipment $ ( 25,339 ) $ ( 2,674 ) $ ( 28,013 ) Net cash provided by investing activities $ 29,406 $ ( 2,674 ) $ 26,732 Effects of exchange rate changes on cash and cash equivalents $ 8,495 $ 7,101 $ 15,596 Supplemental disclosures: Purchases of property, plant and equipment included in accounts payable and accrued expenses $ 2,203 $ 372 $ 2,575 98 Table of Contents Six months ended March 31, 2024 (unaudited) As Reported Adjustments As Revised Cash flows from operating activities Non-cash write-offs of assets $ 6,966 $ 533 $ 7,499 Inventories 7,975 263 8,238 Accrued compensation and tax withholdings ( 6,153 ) ( 1,678 ) ( 7,831 ) Other assets and liabilities 12,913 ( 11,534 ) 1,379 Net cash provided by operating activities $ 34,787 $ ( 12,416 ) $ 22,371 Cash flows from investing activities Purchase of property, plant and equipment $ ( 18,746 ) $ ( 796 ) $ ( 19,542 ) Net cash used in investing activities $ ( 172,213 ) $ ( 796 ) $ ( 173,009 ) Cash flows from financing activities Proceeds from issuance of common stock $ - $ 1,678 $ 1,678 Net cash used in financing activities $ ( 187,220 ) $ 1,678 $ ( 185,542 ) Effects of exchange rate changes on cash and cash equivalents $ 4,721 $ 11,534 $ 16,255 Supplemental disclosures: Purchases of property, plant and equipment included in accounts payable and accrued expenses $ - $ 2,270 $ 2,270 Three months ended December 31, 2023 (unaudited) As Reported Adjustments As Revised Cash flows from operating activities Inventories $ 4,542 $ 387 $ 4,929 Accounts payable 3,457 ( 1,015 ) 2,442 Other assets and liabilities 15,957 ( 12,047 ) 3,910 Net cash provided by operating activities $ 26,431 $ ( 12,675 ) $ 13,756 Cash flows from investing activities Purchase of property, plant and equipment $ ( 11,919 ) $ 628 $ ( 11,291 ) Net cash provided by investing activities $ 98,397 $ 628 $ 99,025 Effects of exchange rate changes on cash and cash equivalents $ 12,501 $ 12,047 $ 24,548 Supplemental disclosures: Purchases of property, plant and equipment included in accounts payable and accrued expenses $ - $ 2,164 $ 2,164 99 Table of Contents Item 9. Changes in and Disagreements with Accountants on Financial Accounting and Financial Disclosure Not applicable.