What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-11-24 compared with 2020-11-18 · 413 added, 581 removed, 1034 unchanged (49% of the section changed)

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Consolidated Statements of Cash Flows for the years ended September 30, 2021, 2020 and 2019

Consolidated Statements of Changes in Equity for the years ended September 30, 2020, 2019 and 2018

Consolidated Statements of Changes in Stockholders’ Equity for the years ended September 30, 2021, 2020 and 2019

Notes to Consolidated Financial Statements

The supplementary quarterly financial information required by this Item 8 is included in Part II, Item 6, “Selected Financial Data”, and is incorporated herein by reference.

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of Brooks Automation, Inc.

and its subsidiaries (the “Company”) as of September 30, 2020 and 2019, and the related consolidated statements of operations, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended September 30, 2020, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of September 30, 2021 and 2020, and the related consolidated statements of operations, of comprehensive income, of changes in stockholders’ equity and of cash flows for each of the three years in the period ended September 30, 2021, 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, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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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.

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.

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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 Assessment – GENEWIZ Reporting Unit

As described in Notes 2, 4 and 8 to the consolidated financial statements, the Company’s consolidated goodwill balance was $502 million as of September 30, 2020, of which $235 million relates to the GENEWIZ reporting unit.

Goodwill is tested for impairment annually or more often if impairment indicators are present at the reporting unit level.

The Company elected April 1st 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.

As disclosed by management, the fair values of the reporting units are determined based on an income approach in accordance with the discounted cash flow method, or DCF method.

The DCF method is based on projected future cash flows and terminal value estimates discounted to their present values.

Application of the goodwill impairment test requires judgment based on market and operational conditions at the time of the evaluation, including management’s best estimates of the reporting unit’s future business activity and the related estimates and assumptions of future cash flows from the assets that include the associated goodwill.

Different assumptions of revenue growth rates, gross margin percentage, selling, general and administrative expense percentage and discount rates used in the DCF model could result in different estimates of the reporting unit’s fair value as of each testing date.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the GENEWIZ reporting unit is a critical audit matter are the significant judgment by management when determining the fair value of the GENEWIZ reporting unit, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence relating to management’s significant assumptions related to revenue growth rates, gross margin percentage, selling, general and administrative expense percentage and discount rate .

Acquisition of Precise Automation Inc.

– Valuation of Completed Technology

As described in Note 3 to the consolidated financial statements, on April 29, 2021, the Company acquired Precise Automation Inc.

for a total cash purchase price of $69.8 million.

As part of the preliminary purchase price allocation, management recorded $38.7 million for the completed technology intangible asset which was valued using the excess earnings method under the income approach.

As disclosed by management, management applied significant judgment in estimating the fair value of the completed technology, which involved significant estimates and assumptions with respect to forecast revenue growth rates and the discount rate.

The principal considerations for our determination that performing procedures relating to the acquisition of Precise Automation Inc.

– valuation of completed technology is a critical audit matter are the significant judgment by management when determining the fair value of the completed technology, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s assumptions related to forecast revenue growth rates and the discount rate.

In addition, 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 the goodwill impairment assessment, including controls over management’s determination of the revenue growth rates, gross margin percentage, selling, general and administrative expense percentage and discount rate.

These procedures also included, among others, (i) testing management’s process for determining the fair value of the GENEWIZ reporting unit, (ii) evaluating the appropriateness of the DCF model, (iii) testing the completeness and accuracy of the underlying data used in the model, and (iv) evaluating the reasonableness of significant assumptions used by management related to revenue growth rates, gross margin percentage, selling, general and administrative expense percentage and discount rate.

Evaluating management’s assumptions related to the revenue growth rates, gross margin percentage and selling, general and administrative expense percentage involved evaluating whether the assumptions used were reasonable considering the past performance of the reporting unit and industry data.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the DCF model and the reasonableness of the discount rate.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the completed technology and assumptions related to forecast revenue growth rates and the discount rate.

These procedures also included, among others, (i) testing management’s process for determining the fair value of the completed technology, (ii) evaluating the appropriateness of the excess earnings method, (iii) testing the completeness and accuracy of the underlying data used in the method, and

(iv) evaluating the reasonableness of significant assumptions used by management related to forecast revenue growth rates and the discount rate.

Evaluating management’s assumptions related to forecast revenue growth rates involved evaluating whether the assumptions used were reasonable considering the past performance of the acquired business, performance year to date, available backlog, and industry data.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the excess earnings method and the reasonableness of the discount rate.

/s/ PricewaterhouseCoopers LLP

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Prepaid expenses and other current assets

Current assets held for sale

Total current assets

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Intangible assets, net

Non-current assets held for sale

Liabilities and Stockholders' Equity

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Accrued expenses and other current liabilities

Current liabilities held for sale

Total current liabilities

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Other long-term liabilities

Non-current liabilities held for sale

Total liabilities

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Total operating expenses

Operating income

Operating loss

Interest income

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Other expenses, net

Income before income taxes

Income tax provision (benefit)

Income from continuing operations

Income (loss) from discontinued operations, net of tax

Net loss attributable to noncontrolling interest

Net income attributable to Brooks Automation, Inc.

Basic net income per share attributable to Brooks Automation, Inc.:

Income from continuing operations

Income (loss) from discontinued operations, net of tax

Loss before income taxes

Income tax benefit

Loss from continuing operations

Income from discontinued operations, net of tax

Basic net income per share:

Diluted net income per share attributable to Brooks Automation, Inc.:

Income from continuing operations

Income (loss) from discontinued operations, net of tax

Loss from continuing operations

Income from discontinued operations, net of tax

Basic net income per share

Diluted net income per share:

Loss from continuing operations

Income from discontinued operations, net of tax

Diluted net income per share

Weighted average shares used in computing net income per share:

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(In thousands)

Other comprehensive income (loss), net of tax:

Other comprehensive income, net of tax:

Foreign currency translation adjustments

Unrealized (losses) gains on marketable securities, net of tax effects of $ 0 , ($ 1 ) and $ 0 for fiscal years 2020, 2019 and 2018

Unrealized gains on marketable securities, net of tax effects of $ 0 , $ 0 and ($ 1 ) for fiscal years 2021, 2020 and 2019

Actuarial gains (losses), net of tax effects of ($ 77 ), $ 27 and $ 13 for fiscal years 2021, 2020 and 2019

Total other comprehensive income, net of tax

Total other comprehensive (loss) income, net of tax

Comprehensive income

Comprehensive loss attributable to noncontrolling interest

Comprehensive income attributable to common stockholders

The accompanying notes are an integral part of these consolidated financial statements.

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Depreciation and amortization

Impairment of property, plant and equipment

Impairment of intangible assets

Stock-based compensation

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Earnings of equity method investments

Loss recovery on insurance claim

Deferred income taxes

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Other losses on disposals of assets

Loss (gain) on sale of divestiture, net of tax

Gain on divestiture, net of tax

Adjustment to the gain on divestiture, net of tax

Contingent transaction fees paid stemming from divestiture

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Proceeds from divestiture

Adjustment to proceeds from divestiture

Acquisitions, net of cash acquired

Issuance of a note receivable

Proceeds from the sale of property, plant and equipment

Proceeds from other investments

Settlement (issuance) of note receivables

Net cash (used in) provided by investing activities

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Common stock dividends paid

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effects of exchange rate changes on cash and cash equivalents

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Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets

Cash and cash equivalents

Cash and cash equivalents of continuing operations

Cash and cash equivalents included in assets held for sale

Short-term restricted cash included in prepaid expenses and other current assets

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BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Noncontrolling

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Comprehensive

Stockholders’

Stockholders’ Equity

(In thousands, except share data)

Balance September 30, 2018

( 1,082,364 )

Shares issued under restricted stock and purchase plans, net

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Common stock dividends declared, at $ 0.40 per share

Acquisition of noncontrolling interest

Foreign currency translation adjustments

Changes in unrealized losses on marketable securities, net of tax effects of ($ 1 )

Actuarial gains arising in the year, net of tax effects of ($ 49 )

Actuarial loss arising in the year, net of tax effects of $ 13

Cumulative effect of adoption of ASC 606

Balance September 30, 2019

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Actuarial loss arising in the year, net of tax effects of $ 27

Cumulative effect of adoption of ASC 606

Balance September 30, 2020

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Brooks Automation, Inc.

(“Brooks”, or the “Company”) is a leading global provider of manufacturing automation solutions for the semiconductor industry, and life science sample-based services and solutions for the life sciences market.

In the semiconductor manufacturing market, the Company provides precision robotics, integrated automation systems, and contamination control solutions to semiconductor fabrication plants and original equipment manufacturers (“OEMs”) worldwide.

In the life sciences market, the Company offers a full suite of services and solutions for analyzing, managing, and storing biological and chemical compound samples to advance research and development for clinical, pharmaceutical, and other scientific endeavors.

The Company’s life sciences solutions include gene sequencing and synthesis, a broad suite of high-throughput automated cryogenic storage products, related consumables, sample inventory software, as well as fully outsourced solutions for sample storage, transport, and inventory management.

The Company’s leadership positions and its global support capability in each of these markets make it a valued business partner to the largest semiconductor and semiconductor capital equipment manufacturers, and pharmaceutical and life sciences research institutions in the world.

(“Brooks”, or the “Company”) is a leading global provider of life science sample exploration and management solutions for the life sciences market.

The Company supports its customers from research to clinical development with its sample management, automated storage, and genomic services expertise to help bring impactful therapies to market faster.

Discontinued Operations

In the fourth quarter of fiscal year 2018, the Company entered into a definitive agreement to sell its semiconductor cryogenics business (the “Disposition”) to Edwards Vacuum LLC (a member of the Atlas Copco Group) (“Edwards”).

The Company determined that the semiconductor cryogenics 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, 2018 (please refer to Note 3, “Discontinued Operations” for further information about the discontinued business).

The Consolidated Balance Sheets and Consolidated Statements of Operations, and the notes to the Consolidated Financial Statements were restated for all periods presented to reflect the discontinuation of the semiconductor cryogenics business, in accordance with FASB ASC 205.

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.

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.

In the fourth quarter of fiscal year 2018, the Company entered into a definitive agreement to sell its semiconductor cryogenics business to Edwards Vacuum LLC (a member of the Atlas Copco Group) (“Edwards”).

The Company determined that the semiconductor cryogenics business met the “held for sale” criteria and the “discontinued operations” criteria in accordance with FASB ASC 205, Presentation of Financial Statements , as of September 30, 2018.

Please refer to Note 3, “Discontinued Operations” for further information about the discontinued businesses.

The Consolidated Balance Sheets and Consolidated Statements of Operations, and the notes to 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 July 1, 2019, the Company completed the sale of the semiconductor cryogenics business for $ 661.5 million, which excludes $ 6.3 million retained by Edwards at closing as a result of the initial net working capital adjustments.

Net cash proceeds from the sale were $ 553.1 million, after deducting estimated taxes payable and closing costs, which remains subject to adjustment for the final determination of working capital and other items.

In connection with the closing the parties entered into Amendment No.

2 to the Asset Purchase Agreement.

As part of this amendment, liabilities assumed by Edwards were revised to include accounts payable related to the semiconductor cryogenics business.

As of September 30, 2018, the Company revised its accounts payable balance on a continuing operations basis to exclude accounts payable related to the semiconductor cryogenics business and revised its current liabilities held for sale balance to include accounts payable related to the semiconductor cryogenics business on its Consolidated Balance Sheets.

Accounts payable and total liabilities of the discontinued operation had also been revised in Note 3, “Discontinued Operations”.

As of September 30, 2018 and 2017, the accounts payable balance related to the semiconductor cryogenics business was $ 11.1 million and $ 10.6 million, respectively.

The Company also revised these balances in previously reported historical periods in the event those periods are presented in any filings.

Risks and Uncertainties

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During the COVID-19 pandemic, the Company’s facilities have remained operational with only required personnel on site, and the balance of employees working from home.

Both business segments fall within the classification of an “Essential Critical Infrastructure Sector” as defined by the U.S.

Department of Homeland Security and have continued operations during the COVID-19 pandemic.

The Company’s business falls within the classification of an “Essential Critical Infrastructure Sector” as defined by the U.S.

Department of Homeland Security and the Company has continued operations during the COVID-19 pandemic.

The Company has followed government guidance in each region and has implemented Centers for Disease Control social distancing guidelines and other best practices to protect the health and safety of the Company’s employees.

The COVID-19 pandemic has not had a substantial impact on our financial results and a portion of this impact has been mitigated by our realignment of resources to satisfy incremental orders related to virus research.

Future impacts on the Company’s financial results will depend on multiple variables which are not fully determinable, as the full impact of the pandemic on the economy and markets which the Company serves is as yet unknown.

The variables are many, but fundamentally include reduced demand from the Company’s customers, the degree that the supply chain may be constrained to impact the Company’s delivery of product, the potential impact to our operations if there is a significant outbreak among our employees, as well as the amount of incremental demand caused by research and treatments in the areas of COVID-19 or related threats.

The COVID-19 pandemic has not had a substantial impact on the Company’s financial results and a portion of this impact has been mitigated by the Company’s realignment of resources to satisfy incremental orders related to virus research and vaccine development and commercialization.

As states safely reopen the economy, get people back to work, and ease social restrictions while minimizing the health impacts of COVID-19, future impacts on the Company’s financial results will depend on future variants of the virus and vaccine effectiveness against the variants, which are not fully determinable, as well as new or prolonged government responses to the pandemic, as the full impact of the pandemic on the economy and markets which the Company serves is as yet unknown.

The Company’s financial results will also depend on variables including reduced demand from its customers, the degree that the supply chain may be constrained which could impact its delivery of product and the potential impact to its operations if there is a significant outbreak among the Company’s employees, as well as the amount of incremental demand caused by research and treatments in the areas of COVID-19 or related threats.

Summary of Significant Accounting Policies

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Business Combinations

The Company accounts for business acquisitions using the acquisition method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date.

The Company accounts for business acquisitions using the purchase method of accounting, in accordance with which assets acquired 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 excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed.

Significant judgments are used in determining fair values of assets acquired and liabilities assumed, as well as intangibles.

Fair value and useful life determinations are based on, among other factors, estimates of future expected cash flows and appropriate discount rates used in computing present values.

These judgments may materially impact the

estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as the Company’s current and future operating results.

Actual results may vary from these estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first.

Adjustments to fair values of assets and liabilities made after the end of the measurement period are recorded within the Company’s operating results.

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 intangibles and their estimated useful lives.

Fair value and useful life determinations may be based on, among other factors, estimates of future expected cash flows and appropriate discount rates used in computing present values.

These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as our current and future operating results.

Actual results may vary from these estimates that may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first.

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

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 expenses, net” in the Company’s Consolidated Statements of Operations.

Statements of Operations.

Net foreign currency transaction and remeasurement losses totaled $ 1.8 million, $ 3.4 million and $ 1.8 million for the fiscal years ended September 30, 2021, 2020 and 2019, respectively.

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The Company’s ten largest customers accounted for approximately 19 %, 19 % and 21 % of its consolidated revenue for the fiscal years ended September 30, 2021, 2020 and 2019, respectively.

No customers accounted for more than 10% of the Company’s consolidated revenue for fiscal years 2020, 2019 and 2018.

customers accounted for more than 10% of the Company’s consolidated revenue for fiscal years 2021, 2020 and 2019.

No customers accounted for more than 10% of the Company’s total receivables during the fiscal year ended September 30, 2021 and 2020.

Fair Value of Financial Instruments

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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.

At September 30, 2020 and 2019, cash equivalents were $ 0.1 million and $ 16.2 million, respectively.

At September 30, 2021 and 2020, cash equivalents were less than $ 0.1 million and $ 0.1 million, respectively.

Cash equivalents are reported at fair value.

The Company classifies short term restricted cash balances within prepaid expenses and other current assets and long term restricted cash balances with in other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions.

Accounts Receivable, Allowance for Doubtful Accounts and Sales Returns

The Company classifies short-term restricted cash balances within prepaid expenses and other current assets and long-term restricted cash balances within other assets on the accompanying Consolidated Balance Sheets based upon the term of the remaining restrictions.

Accounts Receivable, Allowance for Expected Credit Losses and Sales Returns

Trade accounts receivable do not bear interest and are recorded at the invoiced amount.

The Company maintains an allowance for doubtful accounts representing its best estimate of probable credit losses related to its existing accounts receivable and their net realizable value.

The Company determines the allowance based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends and historical experience.

The Company reviews its allowance for doubtful accounts on a quarterly basis and adjusts the balance based on the Company’s estimates of the receivables’ recoverability in the period the changes in estimates occur and become known.

Accounts receivable balances are written off against the allowance for doubtful accounts when the Company determines that the balances are not recoverable.

Provisions for doubtful accounts are recorded in "Selling, general and administrative expenses"

in the Consolidated Statements of Operations.

The Company determines the allowance for sales returns based on its best estimate of probable customer returns.

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 determines the allowance for sales returns based on its best estimate of expected customer returns.

Provisions for sales returns are recorded in "Revenue"

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Customer relationships

The Company adopted Topic 842 effective October 1, 2019 using the modified retrospective approach .

The Company applied Topic 842 to all its leases as of October 1, 2019.

The Company has operating leases for real estate and non-real estate and finance leases for non-real estate.

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The ROU asset for operating leases is included within Other assets and the ROU asset for finance leases is included within Property, plant, and equipment, net on 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.

The short-term lease liabilities for both operating leases and finance leases are included within Accrued expenses and other current liabilities on 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, on the Consolidated Balance Sheets.

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The Company considers the DCF Method to be the most appropriate valuation technique since it is based on management’s long-term financial projections.

to its overall market capitalization and uses certain market-based valuation techniques to assess the reasonableness of the reporting unit fair values determined in accordance with the DCF Method.

In addition, to determining the fair value of the Company’s reporting units based on the DCF method, the Company also compares the aggregate values of its net corporate assets and reporting unit fair values to its overall market capitalization and uses certain market-based valuation techniques to assess the reasonableness of the reporting unit fair values determined in accordance with the DCF Method.

Deferred Financing Costs

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The Company generates revenue from the following sources:

● Products, including sales of tool automation and automated cold sample management systems, atmospheric and vacuum robots, contamination control solutions, 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 and other support services.

● Products, including sales of automated cold sample management systems, consumables, instruments, spare parts, and software.

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.

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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.

Within the Brooks Semiconductor Solutions Group segment, contracts are typically short-term with the exception of service-type warranty contracts, which generally have a stated contract term that is greater than one year.

Within the Brooks Life Sciences segments, contracts are both short and long-term.

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 within all operating segments 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 systems functional performance within the customer’s operating environment.

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 systems 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.

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Performance obligations include the sale of products and services.

Certain customer arrangements related to the sale of automated cold sample management systems and contamination control solution products 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.

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.

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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.

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.

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.

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.

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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 and service-type warranties within the life sciences segments.

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 .

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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.

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.

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.

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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, 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.

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.

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.

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The Company measures stock-based compensation cost at fair value on the grant date and recognizes the expense over the service period for the awards expected to vest.

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 Nasdaq on the date of grant.

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 Global Select 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.

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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 or an examination conducted by taxing authorities, including resolution of related appeals or litigation processes, if any.

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 has to determine the probability of various possible outcomes.

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.

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Earnings Per Share

Basic income per share is determined by dividing net income by the weighted average common shares outstanding during the period.

Basic income or loss per share is determined by dividing net income by the weighted average common shares outstanding during the period.

Diluted income per share is determined by dividing net income by diluted weighted average shares outstanding during the period.

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Recently Issued Accounting Pronouncements

In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

The ASU provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates.

The provisions of this ASU are only available until December 31, 2022 , when the reference rate replacement activity is expected to be completed.

The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12:

Simplifying the Accounting for Income Taxes (Topic 740) , which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 clarifying and amending existing guidance.

This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2020 .

Early adoption is permitted.

In October 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-10, Codification Improvements .

The amendments in this ASU represent changes to clarify certain ASCs, correct unintended application of guidance, or make minor improvements certain ASCs that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.

ASU 2020-10 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods.

Early adoption was permitted.

The amendments in this ASU should be applied retrospectively.

This ASU will not affect the Company's consolidated financial statements.

The Company will adopt the provisions of this ASU in the first quarter of fiscal 2022 and does not expect to have a material impact on the disclosures to the consolidated financial statement.

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):

The ASUs provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates.

The provisions of the ASUs are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed.

The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract .

The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).

The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments.

The provisions may be adopted prospectively or retrospectively.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) , which removes certain exceptions to the general principles in ASC Topic 740, Income Taxes (“ASC Topic 740”), and improves consistent application of and simplifies GAAP for other areas of Topic 740 clarifying and amending existing guidance.

This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2020.

Early adoption is permitted.

The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-14, Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans , which amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans.

The amendments require additional disclosure for the weighted-average interest crediting rates, a narrative description of the reasons for significant gains and losses, and an explanation of any other significant changes in the benefit obligation or plan assets.

The amendment removes disclosure requirement for accumulated other comprehensive income expected to be recognized over the next year, information about plan assets to be returned to the entity, and the effects of a one-percentage-point change on the assumed health care costs and the effect of this change in rates on service cost, interest cost, and the benefit obligation for postretirement health care benefits.

Early adoption was permitted.

The Company will adopt the provisions of this ASU in the first quarter of fiscal 2022 and does not expect that the impact will be material to its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-14, Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans , which amends ASC 715, Compensation – Retirement Benefits, to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans.

The ASU requires additional disclosure for the weighted-average interest crediting rates, a narrative description of the reasons for significant gains and losses, and an explanation of any other significant changes in the benefit obligation or plan assets.

The ASU removes disclosure requirements for accumulated other comprehensive income expected to be recognized over the next year, information about plan assets to be returned to the entity, and the effects of a one-percentage-point change on the assumed health care costs and the effect of this change in rates on service cost, interest cost, and the benefit obligation for postretirement health care benefits.

The ASU is effective for fiscal years ending after December 15, 2020.

Early adoption is permitted.

Early adoption was permitted.

The ASU does not amend the interim disclosure requirements of ASC 715-20.

The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which amends ASC 820 to add and remove disclosure requirements related to fair value measurement.

The amendments include new disclosure requirements for changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average used to develop significant

unobservable inputs for Level 3 fair value measurements.

The amendments eliminated disclosure requirements for amount of and reasons for transfers between Level 1 and Level 2, valuation processes for Level 3 fair value measurements, and policy for timing of transfers between levels of the fair value hierarchy.

In addition, the amendments modified certain disclosure requirement to provide clarification or to promote appropriate exercise of discretion by entities.

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which amends ASC 820, Fair Value Measurement , to add and remove disclosure requirements related to fair value measurement.

The ASU included new disclosure requirements for changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements.

The ASU eliminated disclosure requirements for amount of and reasons for transfers between Level 1 and Level 2, valuation processes for Level 3 fair value measurements, and policy for timing of transfers between levels of the fair value hierarchy.

In addition, the ASU modified certain disclosure requirements to provide clarification or to promote appropriate exercise of discretion by entities.

ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods therein.

Early adoption is permitted.

The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

The Company adopted the guidance during the first quarter of fiscal year 2021 .

There was no significant accounting impact on the Company’s consolidated financial statements and related disclosures as a result of the adoption of this ASU.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract .

The ASU aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).

The accounting for the service element of a hosting arrangement that is a service contract was not affected by the ASU.

The provisions may be adopted prospectively or retrospectively.

This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019.

The Company adopted the guidance during the first quarter of fiscal year 2021 on a prospective basis .

There was no significant accounting impact on the Company’s consolidated financial statements and related disclosures as a result of the adoption of this ASU.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses:

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Topic 326 provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model.

The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019 .

Early adoption is permitted.

The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

In March 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which amends ASC 220 to add, remove, and clarify disclosure requirements related to reporting comprehensive income.

This ASU gives entities the option to reclassify tax effects recorded in accumulated other comprehensive income as a result of tax reform to retained earnings.

The entities have the option to apply the guidance retrospectively or in the period of adoption.

The guidance requires entities to make new disclosures, regardless of whether they elect to reclassify tax effects.

The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.

Early adoption in any period is permitted.

The ASUs are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019.

The Company adopted the guidance during the first quarter of fiscal year 2021 .

There is no accounting impact on the Company’s consolidated financial statements and related disclosures because the Company does not have stranded tax effects in accumulated other comprehensive income as a result of the Tax Cuts and Jobs Act.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , an amendment of the FASB ASC 840.

Under Topic 842, lessees are required to recognize a ROU asset and lease liability on the balance sheet for all leases with terms beyond twelve months.

The new standard also requires enhanced disclosures that provide more transparent information to financial statement users about lease portfolios.

The Company adopted Topic 842 effective October 1, 2019 using the modified retrospective approach .

The Company applied Topic 842 to all its leases as of October 1, 2019 with comparative prior periods continuing to be reported under Topic 840.

With the adoption of Topic 842, the Company assumed the assessment determined under Topic 840 of whether contracts contain leases, the classification of leases as operating or finance and the remaining lease term of each lease.

Certain leases contain both lease and non-lease components, which the Company has elected to treat as a single lease component.

On October 1, 2019, the Company recorded a ROU asset related to its operating leases of $ 28.1 million and a lease liability related to its operating leases of $ 27.1 million on its Consolidated Balance Sheets.

There was no impact to the Company’s finance ROU asset and liability on October 1, 2019.

The adoption of the standard did not impact the Consolidated Results of Operations or Consolidated Statement of Cash Flows.

See Note 7, “Leases” for further information.

There was no significant accounting impact on the Company’s consolidated financial statements and related disclosures as a result of the adoption of these ASUs.

Discontinued Operations

Planned Disposition of Semiconductor Automation Business

On September 20, 2021, the Company entered into a definitive agreement to sell its semiconductor automation business (the “automation business”) to THL for $ 3 billion in cash, subject to adjustments.

The Company anticipates closing of the transaction in the first half of calendar year 2022 upon satisfaction of customary closing conditions and regulatory approvals.

The semiconductor automation business is comprised of the Brooks Semiconductor Solution Group segment.

At the completion of the sale, the Company will no longer serve the semiconductor market.

During the fourth quarter of fiscal 2021, the Company determined that its automation business met the criteria to be classified as a discontinued operation and, as a result, its historical financial results are reflected in the Company’s financial statements as a discontinued operation, and assets and liabilities were classified as assets and liabilities held for sale.

The following table presents the financial results of automation business discontinued operations with respect to the automation business (in thousands):

Year Ended September 30,

Total revenue

Cost of revenue

Total cost of revenue

Operating expenses

Research and development

Selling, general and administrative

Restructuring charges

Total operating expenses

Operating income

Other income (loss), net

Income before income taxes

Income tax provision

Net income from discontinued operations

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,

Depreciation and amortization

Capital expenditures

Stock-based compensation

The carrying value of the assets and liabilities of the discontinued operations with respect to the semiconductor automation business on the Consolidated Balance Sheets as of September 30, 2021 and 2020 was as follows (in thousands):

September 30,

Cash and cash equivalents

Accounts receivable, net

Other current assets

Total current assets of discontinued operation

Property, plant and equipment, net

Long-term deferred tax assets

Intangibles, net

Total long-term assets of discontinued operation

Accounts payable

Deferred revenue

Accrued warranty and retrofit costs

Accrued compensation and benefits

Accrued Income Taxes

Accrued expenses and other current liabilities

Total current liabilities of discontinued operation

Long-term tax reserves

Long-term deferred tax liabilities

Long-term pension liabilities

Long-term operating lease liabilities

Other long-term liabilities

Total long-term liabilities of discontinued operation

Acquisition within the Automation Business

On April 29, 2021 , the Company acquired Precise Automation Inc., a leading developer of collaborative robots and automation subsystems headquartered in Fremont, California.

The total cash purchase price for the acquisition was approximately $ 69.8 million.

Precise provides the automation business with a product offering and technology portfolio to take advantage of the opportunities in the collaborative robot market.

The allocation of the consideration included $ 38.7 million of technology, $ 2.5 million of customer relationships, $ 33.1 million of goodwill, $ 6.2 million of deferred tax liabilities, and several other assets and liabilities.

The purchase price allocation was based on a preliminary valuation which is subject to further adjustments within the measurement period when additional information becomes available.

The Company applied variations of the income approach to estimate the fair values of the intangible assets acquired.

The completed technology was valued using excess earnings method and the customer relationships was valued using distributor margin method, both of which have a useful life of 11 years .

The intangible assets acquired are amortized over the total weighted average period of 11 years using methods that approximate the pattern in which the economic benefits are expected to be realized.

The Company has included the financial results of the acquired operations within income from discontinued operations on its Consolidated Statements of Operations.

The goodwill and intangible assets are not tax deductible

The Company did not present a pro forma information summary for its consolidated results of operations for the fiscal years ended September 30, 2021 and 2020 because such results were immaterial.

Disposition of the Semiconductor Cryogenics Business

On August 27, 2018, the Company entered into a definitive agreement to sell its semiconductor cryogenics business to Edwards for $ 675.0 million in cash, subject to adjustments.

On July 1, 2019, the Company completed the sale of the semiconductor cryogenics business for $ 661.5 million, which excludes $ 6.3 million retained by Edwards at closing based on an estimate of net working capital adjustments, which are currently pending finalization.

from the sale were approximately $ 553.1 million, net of taxes and closing costs paid and remaining estimated taxes payable.

Net proceeds from the sale were approximately $ 553.1 million, net of taxes and closing costs paid and remaining estimated taxes payable.

As part of this sale, we transferred our intellectual property, or IP, for our cryogenics pump products, but not our IP related to our semiconductor automation or life sciences businesses.

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The Company believes that any indemnifiable losses in excess of the applicable deductibles and indemnification escrow established in the definitive agreement would be covered by such insurance.

If Edwards is unable to obtain recovery under its insurance, however, it could seek recovery of such indemnifiable losses, if any, directly from the Company.

The semiconductor cryogenics business consists of the CTI pump business, Polycold chiller business, the related services business and a 50 % share in Ulvac Cryogenics, Inc., a joint venture based in Japan.

If Edwards is unable to obtain recovery under its insurance, however, it could seek recovery of such indemnifiable losses, if any, directly from the Company’s continuing operation.

The semiconductor cryogenics business consisted of the CTI pump business, Polycold chiller business, the related services business and a 50 % share in Ulvac Cryogenics, Inc., a joint venture based in Japan.

The semiconductor cryogenics business was originally acquired by the Company in its 2005 merger with Helix Technology Corporation.

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This Disposition is consistent with the Company’s long-standing strategy to increase shareholder value by accelerating the growth of its Life Sciences businesses with further acquisitions and strengthening its semiconductor automation business with opportunistic acquisitions.

The Disposition met the "held for sale"

criteria and the “discontinued operation” criteria in accordance with FASB ASC 205 as of September 30, 2018.

The semiconductor cryogenics business disposition met the "held for sale"

criteria and the “discontinued operation” criteria in accordance with ASC 205 as of September 30, 2018.

As such, its operating results have been reported as a discontinued operation for all periods presented.

The following table presents the financial results of discontinued operations (in thousands):

The following table presents the financial results of discontinued operations with respect to the semiconductor cryogenics business (in thousands):

Year Ended September 30,

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Total operating expenses

Operating income

Other income (loss), net

Income (loss) before income taxes and earnings of equity method investment

Income tax provision (benefit)

Operating (loss) income

Interest income

Interest expense

Other loss, net

Loss on discontinued operations before income taxes

Income tax benefit

Income (loss) before equity in earnings of equity method investment

Equity in earnings of equity method investment

Net income (loss)

The Company did not record income or loss related to our semiconductor cryogenics business for the fiscal year ended September 30, 2020.

The table above reflects revenue for the year ended September 30, 2019 in accordance with ASC 606, while results for the years ended September 30, 2018 have not been restated and are reported in accordance with the governing revenue recognition standards applicable to those periods prior to adoption of ASC 606.

Results for the year ended September 30, 2019 were not significantly impacted by the adoption of ASC 606.

The Company performed its annual goodwill impairment analysis in April 2018.

This analysis was updated upon announcement of the Disposition for the year ended September 30, 2018.

The Company concluded that there was no impairment indicator related to the goodwill of the Disposition group at either date the impairment analysis was performed.

The Company did not include goodwill related to the semiconductor cryogenics business in its annual impairment analysis in April 2019, as the Disposition was classified as assets held for sale.

The following table presents the summarized financial information for Ulvac Cryogenics, Inc., the unconsolidated subsidiaries accounted for based on the equity method (in thousands):

Net loss from discontinued operations

The Company did not record income or loss related to our semiconductor cryogenics business for the fiscal year ended September 30, 2020 and 2021.

The table above reflects revenue for the year ended September 30, 2019 in accordance with ASC 606.

The following table presents the summarized financial information for Ulvac Cryogenics, Inc., an unconsolidated subsidiary accounted for based on the equity method (in thousands):

Year Ended September 30,

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Operating Income

The following table presents the significant non-cash items and capital expenditures for the discontinued operations that are included in the Consolidated Statements of Cash Flows (in thousands):

The following table presents the significant non-cash items and capital expenditures for the discontinued operations with respect to the semiconductor cryogenics business that are included in the Consolidated Statements of Cash Flows (in thousands):

Year Ended September 30,

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Earnings of equity method investment

The Company recorded the assets acquired and liabilities assumed related to the below 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 finalization of the assignment of fair values will be completed within one year after the respective acquisition date.

The Company did not present a pro forma information summary for its consolidated results of operations for the acquisitions completed in fiscal year 2021 and 2020 because such results were immaterial.

Acquisitions Completed in Fiscal Year 2021

Acquisition of RURO Inc.

On April 2, 2021, the Company acquired Abeyatech LLC.

The Company has included the financial results of the acquired operations within the Life Sciences Products segment.

The total net of cash purchase price was approximately $ 19.3 million, net of cash acquired.

The purchase price includes $ 9.4 million in contingent consideration based on the acquired business’ performance for the twelve-month period ending December 31, 2021, subject to customary working capital adjustments and other adjustments.

The acquisition enhances the breadth and depth of the Company’s offerings and expands its expertise in the Life Sciences Products segment.

The allocation of the consideration included $ 11.9 million of technology, $ 4.4 million of goodwill, and several other assets and liabilities for $ 3.0 million.

The weighted useful life of all the intangible assets acquired is 12 years .

The purchase price allocation was based on a preliminary valuation which is subject to further adjustments within the measurement period when additional information becomes available.

The goodwill and intangibles are tax deductible .

On December 3, 2020 , the Company acquired Trans-Hit Biomarkers Inc.

(“THB”), a worldwide biospecimen procurement service provider based in Montreal, Canada.

THB has an extensive collection capability for biospecimens and clinical samples through a worldwide partner network of clinical sites and biobanks.

The total cash purchase price of the acquisition was approximately $ 15.1 million, net of cash acquired.

The acquisition enhances the breadth and depth of the Company’s offerings and expands its expertise in the Life Sciences Services segment.

The allocation of the consideration included $ 7.8 million of customer relationships, $ 9.3 million of goodwill, $ 2.4 million of deferred tax liabilities, and several other assets and liabilities.

The weighted useful life of all intangibles acquired is 11 years .

The purchase price allocation was based on a preliminary valuation which is subject to further adjustments within the measurement period when additional information becomes available.

The Company has included the financial results of the acquired operations in the Life Sciences Services segment.

The goodwill and intangibles are not tax deductible.

Acquisitions Completed in Fiscal Year 2020

On February 11, 2020 , the Company acquired RURO, Inc.

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The addition of RURO's capabilities and offerings will enable the Company to offer enhanced on-site and off-site management of biological sample inventories as well as integration solutions to its customers for their increasingly distributed workflow.

The total cash purchase price of the acquisition was $ 15.6 million, net of cash acquired, subject to net working capital adjustments.

The Company recorded the assets acquired and liabilities assumed related to RURO at their fair values as of the acquisition date, from a market participant’s perspective.

Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions.

The finalization of the assignment of fair values will be

completed within one year.

The following table presents the preliminary net purchase price and the fair values of the assets and liabilities of RURO (in thousands):

Fair Value of

Accounts receivable

Prepaid expenses and other current assets

Intangible assets

Accounts payable

Deferred revenue

Accrued compensation and benefits

Other current liabilities

Long-term deferred tax liabilities

Long-term operating lease liabilities

Total purchase price, net of cash acquired

The Company applied variations of the income approach to estimate the fair values of the intangible assets acquired.

The identifiable intangible assets include customer relationships (excess earnings method) of $ 2.9 million with a useful life of 12 years , technology (relief from royalty method) of $ 2.9 million with a useful live of 9 years and trademarks (relief from royalty method) of $ 0.2 million with a useful life of 5 years .

The intangible assets acquired are amortized over the total weighted average period of 10.3 years using methods that approximate the pattern in which the economic benefits are expected to be realized.

Goodwill of $ 11.1 million largely reflects the potential synergies and expansion of the Company’s core technologies and offerings in the life sciences businesses.

The goodwill from this acquisition is not tax deductible.

The Company reported the results of operations for RURO in the Brooks Life Sciences Services segment starting from the acquisition date.

The revenues and net income from RURO recognized in the Company's consolidated results of operations were $ 3.8 million and $ 0.6 million, respectively, for the period between the acquisition date and September 30, 2020.

During the period between the acquisition date and September 30, 2020, the amortization expense of acquired intangible assets was $ 0.6 million.

During the year ended September 30, 2020, the Company incurred $ 0.3 million in transaction costs, which were recorded in "Selling, general and administrative"

expenses within the accompanying unaudited Consolidated Statements of Operations.

cash purchase price of the acquisition net of cash acquired was $ 15.2 million.

The allocation of the consideration primarily included $ 0.6 million of accounts receivable, $ 2.9 million of customer relationships, $ 2.9 million of technology assets, $ 11.0 million of goodwill, and $ 2.7 million of liabilities.

The goodwill from this acquisition is reported within the Life Sciences Services segment and is not tax deductible.

Acquisitions Completed in Fiscal Year 2019

Acquisition of the GENEWIZ Group

On November 15, 2018 , the Company acquired all the outstanding capital stock of GENEWIZ Group (“GENEWIZ”), a leading global genomics service provider headquartered in South Plainfield, New Jersey.

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Goodwill of $ 235.2 million largely reflects the potential synergies and expansion of the Company’s core technologies and offerings in the life sciences businesses.

The goodwill from this acquisition is reported within the Brooks Life Sciences Services segment and is not tax deductible.

The revenues and net income from GENEWIZ recognized in the Company’s consolidated results of operations were $ 166.4 million and $ 7.2 million, respectively, during the year ended September 30, 2020.

The goodwill from this acquisition is reported within the Life Sciences Services segment and is not tax deductible.

The revenues and net loss from GENEWIZ recognized in the Company’s consolidated results of operations were $ 220.7 million and $ 9.7 million, respectively, during the year ended September 30, 2021.

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The Company incurred $ 0.2 million, $ 0.1 million and $ 6.5 million, respectively, in transaction costs with respect to the GENEWIZ acquisition during the years ended September 30, 2021, 2020 and 2019.

Transaction costs were

recorded in "Selling, general and administrative"

Transaction costs were recorded in "Selling, general and administrative"

expenses within the accompanying unaudited Consolidated Statements of Operations.

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The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, including, but not limited to, anticipated costs savings from synergies or other operational improvements (in thousands).

Year Ended September 30,

Net income from continuing operations

September 30, 2019

Net loss from continuing operations

The unaudited pro forma financial information presented in the table above includes adjustments for the application of the Company’s accounting policies, elimination of related party transactions, depreciation and amortization related to fair value adjustments to property, plant and equipment and intangible assets, and interest expense on acquisition related debt.

$ 1.6 million and $ 12.7 million, respectively, of depreciation and amortization related to the fair value step up of property, plant, and equipment and leases, recording of intangible assets, $ 0 million and $ 53.6 million, respectively, of one-time nonrecurring compensation expenses and transaction costs related to the GENEWIZ acquisition, $ 2.0 million and $ 19.8 million, respectively, of interest expense related to financing activities.

Acquisitions Completed in Fiscal Year 2018

Acquisition of Tec-Sem

On April 6, 2018 , the Company acquired approximately 93 % of the outstanding capital stock of Tec-Sem Group AG (“Tec-Sem”), a Switzerland-based manufacturer of semiconductor fabrication automation equipment with a focus on reticle management.

In the fourth quarter of fiscal year 2018 , the Company acquired the remaining 7 % noncontrolling interest upon the completion of certain procedural steps.

The total cash payment to acquire the business was $ 15.6 million, net of cash acquired and subject to working capital adjustments.

The acquisition of Tec-Sem has expanded the Company’s contamination control solutions business within the Brooks Semiconductor Solutions Group segment.

The Company used a market participant approach to record the assets acquired and liabilities assumed with the Tec-Sem acquisition as follows (in thousands):

Fair Value of Assets

an d Liabilities

Accounts receivable (approximates contractual value)

Prepaid expenses and other current assets

Property, plant and equipment

Intangible assets

Accounts payable

Accrued liabilities

Deferred tax liabilities

Accrued pension liability

Total purchase price, net of cash acquired

The Company applied variations of the income approach to estimate the fair values of the intangible assets acquired.

The identifiable intangible assets include completed technology (excess earnings method) of $ 8.4 million with a useful life of 10 years , backlog (excess earnings method) of $ 1.6 million with a useful life of 1 year , and customer relationships (distributor method) of $ 0.7 million with a useful life of 9 years .

The intangible assets acquired are amortized over the total weighted average period of 8.6 years using methods that approximate the pattern in which the economic benefits are expected to be realized.

Goodwill of $ 7.7 million largely reflects the potential synergies and expansion of technical capabilities to the Company's existing contamination control solutions business.

The goodwill from this acquisition is reported within the Brooks Semiconductor Solutions Group segment and is not tax deductible.

As part of the acquisition, the Company assumed all the assets and liabilities of Tec-Sem’s Swiss defined benefit plan , which covered substantially all its full-time employees.

At acquisition date, the plan was fully funded for each employee’s pension contribution plus an expected rate of return equal to the statutory discount rate.

Total plan assets and plan liability were $ 5.1 million and $ 7.9 million, respectively, at acquisition date.

The Company recorded a liability of $ 2.8 million for the unfunded projected benefit obligation related to each plan participant’s future services.

The Company reports the results of operations for Tec-Sem in the Brooks Semiconductor Solutions Group segment.

The revenues and net income from Tec-Sem included in the Company's consolidated results for fiscal year 2020 were $ 25.3 million and $ 7.3 million, respectively.

The revenues and net income from Tec-Sem included in the Company's consolidated results for fiscal year 2019 were $ 30.9 million and $ 8.1 million, respectively.

The revenues and net loss from Tec-Sem included in the Company's consolidated results for fiscal year 2018 were $ 11.6 million and $ 1.2 million, respectively.

During fiscal years 2020, 2019 and 2018, the net income (loss) included $ 1.7 million, $ 2.7 million, and $ 2.1 million, respectively, related to amortization expense of acquired intangible assets.

During fiscal years 2019 and 2018, the net income included $ 0.2 million and $ 0.7 million, respectively, related to the step-up in value of the acquired inventories and related to amortization expense of acquired intangible assets.

During fiscal year 2018, the Company also incurred $ 0.9 million in transaction costs related to the Tec-Sem acquisition.

The escrow at closing had a balance of $ 2.6 million which consisted of $ 1.8 million related to satisfaction of the sellers' indemnification obligations with respect to their representations and warranties and other indemnities.

The remaining $ 0.8 million of the escrow balance is related to a performance obligation that the Company assumed at the acquisition date for the transfer of non-core wafer stocker technology to an unrelated third party.

The escrow balances had been fully released during fiscal year 2020.

The Company did not present a pro forma information summary for its consolidated results of operations for the fiscal years ended September 30, 2018 and 2017 as if the acquisition of Tec-Sem occurred on October 1, 2016 because such results were immaterial.

Acquisition of 4titude Limited

On October 5, 2017 , the Company acquired all the outstanding capital stock of 4titude Limited (“4titude”), a U.K.-based manufacturer of scientific consumables for biological sample materials used in a variety of genomic and DNA analytical applications.

The acquisition of 4titude has expanded the Company’s existing offerings of consumables and instruments within the Brooks Life Sciences segments.

The aggregate purchase price of $ 65.1 million, net of cash acquired, consisted primarily of a cash payment of $ 64.8 million subject to working capital adjustments and the assumption of the seller’s liabilities of $ 0.4 million.

The Company used a market participant approach to record the assets acquired and liabilities assumed in the 4titude acquisition as follows (in thousands):

Fair Value of

Accounts receivable (approximates contractual value)

Prepaid expenses and other current assets

Property, plant and equipment

Intangible assets

Accounts payable

Accrued liabilities

Deferred tax liabilities

Total purchase price, net of cash acquired

The Company applied variations of the income approach to estimate the fair values of the intangible assets acquired.

The identified intangible assets include customer relationships (excess earnings method) of $ 21.4 million with a useful life of 10 years , completed technology (relief from royalty method) of $ 5.2 million with a useful life of 13 years , backlog (excess earnings method) of $ 0.4 million with a useful life of 1 year and trademarks (excess earnings method) of $ 0.2 million with a useful life of 1 year .

The intangible assets acquired are amortized over the total weighted average period of 10.4 years using methods that approximate the pattern in which the economic benefits are expected to be realized.

At the acquisition date, a cash payment of $ 0.4 million was placed into escrow which was ascribed to the purchase price.

The escrow was related to satisfaction of the sellers' indemnification obligations with respect to their representations and warranties and other indemnities.

The escrow balance was fully released during fiscal year 2020.

Goodwill represents the excess of the consideration paid over the fair value of the net assets acquired and has been assigned to the Brooks Life Sciences Products segment .

Goodwill is primarily the result of expected synergies from combining the operations of 4titude with the Company’s operations and is not deductible for tax purposes.

The operating results of 4titude have been reflected in the results of operations for the Brooks Life Sciences Products segment.

During fiscal year 2020, revenue and net loss from 4titude recognized in the Company’s results of operations were $ 21.7 million and $ 3.9 million, respectively.

During fiscal year 2019, revenue and net income from 4titude recognized in the Company’s results of operations were $ 16.1 million and $ 0.7 million, respectively.

During fiscal year 2018, revenue and net loss from 4titude recognized in the Company’s results of operations were $ 15.9 million and $ 0.8 million, respectively.

The net income (loss) in fiscal years 2020, 2019, and 2018 included recurring charges of $ 3.7 million, $ 3.7 million, $ 4.1 million, respectively, related to amortization expense of acquired intangible assets.

The net loss in fiscal year 2018 also included non-recurring charges of $ 1.2 million related to the step-up in value of the acquired inventories.

During fiscal year 2018, the Company incurred $ 1.1 million in non-recurring transaction costs with respect to the 4titude acquisition.

The Company did not present a pro forma information summary for its consolidated results of operations for the fiscal years ended September 30, 2018 and 2017 as if the acquisition of 4titude occurred on October 1, 2016 because such results were immaterial.

On April 20, 2018 , the Company acquired BioSpeciMan Corporation (“BioSpeciMan”), a Canada-based provider of storage services for biological sample materials.

BioSpeciMan, founded in 2002 , provides temperature controlled biological sample storage services to an attractive mix of pharma, biotech and contract laboratory customers.

This acquisition has expanded customer relationships and geographic reach within its growing sample management storage services business in the Brooks Life Sciences segments.

The total cash payment made by the Company was $ 5.2 million, net of cash acquired and subject to working capital adjustments.

The Company allocated the purchase price of $ 5.2 million based on the fair value of the assets and liabilities acquired, which included $ 0.3 million of accounts receivable, $ 2.6 million of customer relationships, $ 2.7 million of goodwill and $ 0.7 million of assumed liabilities.

The Company applied the excess earnings method, a variation of the income approach to determine the fair value of the customer relationship intangible asset.

The goodwill from this acquisition is reported within the Brooks Life Sciences Services segment and is not tax deductible.

At the acquisition date, a cash payment of $ 0.5 million was placed into escrow which was ascribed to the purchase price.

The escrow was related to satisfaction of the sellers' indemnification obligations with respect to their representations and warranties and other indemnities.

The operating results of the acquisition have been reflected in the results of operations for the Brooks Life Sciences Services segment.

The Company did not present a pro forma information summary for its consolidated results of operations for the fiscal years ended September 30, 2018 and 2017 as if the acquisition of BioSpeciMan occurred on October 1, 2016 because such results were immaterial.

To present the Company’s consolidated results of operations as if the acquisition had taken place on October 1, 2017, the unaudited pro forma earnings for the years ended September 30, 2019 have been adjusted to include $ 1.6 million of depreciation and amortization related to the fair value step up of property, plant, and equipment and leases, recording of intangible assets and $ 2.0 million of interest expense related to financing activities.

Marketable Securities

5 unchanged sentences

in the accompanying Consolidated Statements of Operations.

During fiscal year 2021, there were insignificant sales of marketable securities.

During fiscal year 2020, the Company sold marketable securities with a fair value and amortized cost of $ 2.5 million and recognized a net gain of less than $ 0.1 million.

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in the accompanying Consolidated Statements of Operations as a result of these transactions.

During fiscal year 2019, the Company sold marketable securities with a fair value and amortized cost of $ 49.4 million and $ 49.5 million, respectively, and recognized net losses of $ 0.1 million.

As a result, during this period, the Company collected cash proceeds of $ 48.9 million from the sale of marketable securities and reclassified unrealized net holding losses of $ 0.1 million from accumulated other comprehensive income into "Other expenses, net"

in the accompanying Consolidated Statements of Operations as a result of these transactions.

The following is a summary of the amortized cost and the fair value, including accrued interest receivable, as well as unrealized holding gains (losses) on the short-term and long-term marketable securities as of September 30, 2021 and 2020 (in thousands):

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Corporate securities

Other debt securities

Municipal securities

September 30, 2020:

Treasury securities and obligations of U.S.

government agencies

Bank certificates of deposits

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If the Company believes that an other-than-temporary decline in fair value has occurred, it writes down the investment to fair value and recognizes the credit loss in earnings and the non-credit loss in accumulated other comprehensive income or loss.

There was an insignificant amount of securities in an

unrealized loss position as of September 30, 2021.

There were no securities in an unrealized loss position as of September 30, 2020.

The aggregate fair value of the marketable securities in unrealized loss position was $ 12.0 million as of September 30, 2019.

Aggregate unrealized losses for these securities were insignificant as of September 30, 2019 and are presented in the table above.

The securities in unrealized loss position as of September 30, 2019 were not considered other-than-temporarily impaired and, as such, the Company did not recognize impairment losses during the period then ended.

The unrealized losses were attributable to changes in interest rates that impacted the value of the investments.

Property, Plant and Equipment

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Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate):

As of September 30, 2020

September 30, 2021

September 30, 2020

Operating Leases:

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Financing cash flows from finance leases

ROU assets obtained in exchange for lease liabilities:

Operating leases

Future lease payments for operating and finance leases as of September 30, 2021 were as follows for the subsequent five fiscal years and thereafter (in thousands):

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Finance Leases

Total future lease payments

Less imputed interest

Total lease liability balance

Future lease payments for operating and capital leases as of September 30, 2019 were as follows for the subsequent five fiscal years and thereafter (in thousands):

Operating Leases

Capital Leases

Fiscal year ended September 30,

Total future lease payments

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No impairment loss is recognized if the fair value of the reporting exceeds its carrying value.

The Company completed its annual goodwill impairment test as of April 1, 2020 for its six reporting units, including Automation Solutions, Contamination Control Solutions and Global Semiconductor Services within the Brooks Semiconductor Solutions Group segment, Sample Repository Solutions and GENEWIZ within the Brooks Life Sciences Services segment, and Brooks Life Sciences Products as the only reporting unit within the Brooks Life Sciences Products segment.

The Company completed its annual goodwill impairment test as of April 1, 2021 for its six reporting units which three reporting units are within semiconductor automation discontinued operations.

The three reporting units within the continuing operations include Life Sciences Products as the only reporting unit within the Life Sciences Products segment, and Sample Repository Solutions and Genomic Services within the Life Sciences Services segment.

Based on the test results, the Company determined that no adjustment to goodwill was necessary.

The Company conducted a qualitative assessment for the three reporting units within the Brooks Semiconductor Solutions Group segment and determined that it was more likely than not that their fair values were greater than their carrying values.

As a result of the analysis, the Company did not perform the quantitative assessment for these reporting units, and therefore, did not recognize any impairment losses.

The Company performed the quantitative goodwill impairment test for the three reporting units within the life sciences businesses.

The Company determined that no adjustment to goodwill was necessary for these three reporting units.

The Life Sciences Products and the Sample Repository Solutions unit’s fair values significantly exceeded book value.

The GENEWIZ reporting unit, which was acquired in the first quarter of fiscal year 2019 , also had a fair value in excess of its book value.

The Company conducted a qualitative assessment for the Life Science Products reporting unit and determined that it was more likely than not that its fair value was greater than its carrying value.

As a result of the analysis, the Company did not perform the quantitative assessment for this reporting unit, and therefore, did not recognize any impairment losses.

The Company performed the quantitative goodwill impairment test for the two reporting units within the Life Sciences Services segment.

The Company determined that no adjustment to goodwill was necessary for these two reporting units.

Both reporting units’ fair values significantly exceeded their respective book values.

Immediately post to the annual goodwill impairment test, the Company combined two components within the Life Sciences Services operating segment, Sample Repository Solutions and Genomic Services components, into the Life Sciences Services reporting unit.

The Company evaluated the aggregation criteria under ASC 350 for the two components and concluded that they exhibit similar economic characteristics and meet the aggregation criteria.

Post to this aggregation, the Company has two reporting units which includes the Life Sciences Products and the Life Sciences Services reporting units.

The following table sets forth the changes in the carrying amount of goodwill by reportable segment since September 30, 2019 (in thousands):

Semiconductor

Life Sciences

Gross goodwill, at September 30, 2018

Accumulated goodwill impairments

Goodwill, net of accumulated impairments, at September 30, 2018

Balance, at September 30, 2019

Acquisitions and adjustments

Gross goodwill, at September 30, 2019

Accumulated goodwill impairments

Goodwill, net of accumulated impairments, at September 30, 2019

Balance, at September 30, 2020

Acquisitions and adjustments

Gross goodwill, at September 30, 2020

Accumulated goodwill impairments

Goodwill, net of accumulated impairments, at September 30, 2020

During fiscal year 2020, the Company recorded a goodwill increase of $ 12.9 million primarily related to the acquisition of RURO and the impact of foreign currency translation adjustments.

Balance, at September 30, 2021

During fiscal year 2021, the Company recorded a goodwill increase of $ 16.2 million primarily related to the acquisitions in fiscal year 2021 and the impact of foreign currency translation adjustments.

The components of the Company’s identifiable intangible assets as of September 30, 2021 and 2020 are as follows (in thousands):

3 unchanged sentences

Trademarks and trade names

Non-competition agreements

Customer relationships

1 unchanged sentence

Amortization expense for intangible assets was $ 37.4 million, $ 35.4 million and $ 27.3 million, respectively, for the fiscal years ended September 30, 2021, 2020 and 2019.

During the fourth quarter of fiscal year 2021, the Company announced that its life sciences business comprised of the Life Sciences Services and Life Sciences Products segments will be rebranded under a single, unified life sciences brand, Azenta Life Sciences, or Azenta, during the first half of fiscal year 2022.

The Company has concluded that the abandoned tradenames for these businesses as a result of the rebranding are fully impaired in the fiscal fourth quarter of 2021 and has recorded a $ 13.4 million charge for the tradename impairment loss.

The impairment loss is included in the “Selling, general and administrative expense” in the Consolidated Statements of Operations.

Estimated future amortization expense for the intangible assets as of September 30, 2021 is as follows (in thousands):

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Accounts receivable

Less allowance for doubtful accounts

Less allowance for sales returns

Less allowance for expected credit losses

Accounts receivable, net

The allowance for doubtful accounts activity for the fiscal years ended September 30, 2020, 2019 and 2018 is as follows (in thousands):

2020 Allowance for doubtful accounts

2019 Allowance for doubtful accounts

2018 Allowance for doubtful accounts

The allowance for sales returns activity for the fiscal years ended September 30, 2020, 2019 and 2018 is as follows (in thousands):

2020 Allowance for sales returns

2019 Allowance for sales returns

2018 Allowance for sales returns

The allowance for expected credit losses for the fiscal years ended September 30, 2021, 2020 and 2019 is as follows (in thousands):

2021 Allowance for expected credit losses

2020 Allowance for expected credit losses

2019 Allowance for expected credit losses

The following is a summary of inventories at September 30, 2021 and 2020 (in thousands):

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The activity for valuation allowance for deferred tax assets is as follows for the fiscal years ended September 30, 2021, 2020 and 2019 (in thousands):

Income Tax Benefit

Other Accounts

4 unchanged sentences

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 to the Company.

The following is a summary of product warranty and retrofit activity on a gross basis, excluding amounts related to discontinued operations, for the fiscal years ended September 30, 2020, 2019 and 2018 (in thousands):

delivered to the Company.

The following is a summary of product warranty and retrofit activity on a gross basis for the fiscal years ended September 30, 2021, 2020 and 2019 (in thousands):

Balance at September 30, 2018

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The Company wrote off the carrying value of the incremental term loan of $ 340.1 million as of February 15, 2019 and recorded the syndicated incremental term loan at its present value for $ 349.1 million and a loss on debt extinguishment for $ 9.1 million.

The syndicated incremental term loan was issued at $ 345.2 million, or 98.9 % of its par value resulting in a discount of $ 4.0 million which represented financing costs which are presented as a reduction of the incremental term loan principal balance in the accompanying unaudited Consolidated Balance Sheets and was accreted over the life of the incremental term loan.

The syndicated incremental term loan was issued at $ 345.2 million, or 98.9 % of its par value resulting in a discount of $ 4.0 million which represented financing costs which are presented as a reduction of the incremental term loan principal balance and was accreted over the life of the incremental term loan.

Except as provided in the Second Amendment with respect to an increase of the applicable interest rates, the syndicated incremental term loan was subject to the same terms and conditions as the initial incremental term loan.

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Subject to certain conditions stated in the credit agreement, the Company may redeem the term loan at any time at its option without a significant premium or penalty, except for a repricing transaction, as defined in the credit agreement.

The Company is required to redeem the term loan at the principal amount then outstanding upon occurrence of certain events, including (i) net proceeds received from the sale or other disposition of the Company’s or the guarantor’ assets, subject to certain limitations, (ii) casualty and condemnation proceeds received by the Company or the guarantor, subject to certain exceptions, (iii) net proceeds received by the Company or the guarantor from the issuance of debt or

disqualified capital stock after October 4, 2017.

Commencing on December 31, 2018, the Company was required to make principal payments equal to the excess cash flow amount, as defined in the credit agreement.

Such prepayments are equal to 50 % of the preceding year excess cash flow amount reduced by voluntary prepayments of the term loan, subject to certain limitations.

The deferred financing costs are accreted over the term of the loan using the effective interest rate method and are included in “Interest expense” in the accompanying unaudited Consolidated Statements of Operations.

The deferred financing costs are accreted over the term of the loan using the effective interest rate method and are included in “Interest expense” in the accompanying Consolidated Statements of Operations.

At September 30, 2021, deferred financing costs were $ 0.3 million.

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In connection with the GENEWIZ acquisition, the Company assumed three five-year term loans for a total of $ 3.3 million and two one-year short term loans for a total of $ 3.2 million.

The three five-year term loans were initiated during 2016 and mature in 2021.

The three five-year term loans were initiated during

2016 and matured in 2021.

The principal payments are payable in eight installments equal to 12.5 % of the initial principal amount of the term loans on December 14th and June 14th of each year.

The three five-year term loans were secured by GENEWIZ to fund equipment procurement and new building related payments and the interest rates are equal to the LIBOR plus 3.1 %.

The three five-year term loans were secured by GENEWIZ to fund equipment procurement and new building related payments and the interest rates were equal to the LIBOR plus 3.1 %.

The two one-year term loans were secured by GENEWIZ to fund operations.

2 unchanged sentences

There are no deferred financing costs related to either the five-year term loans or the one-year term loans.

At September 30, 2020, the Company had an aggregate outstanding principal balance of $ 0.8 million for the three five-year term loans.

Both of the two one-year short term loans matured and were repaid in full during fiscal year 2019.

The three five-year term loans matured and were repaid in full during fiscal year 2021.

During the year ended September 30, 2021, the weighted average stated interest rate paid on all outstanding debt was 2.8 %.

During the year ended September 30, 2021, the Company incurred aggregate interest expense of $ 1.7 million in connection with the borrowings, including $ 0.2 million of deferred financing costs amortization.

As of September 30, 2021, estimated fair value of the term loan outstanding principal balance approximates its carrying value.

The fair value was determined based on observable market inputs and classified within Level 2 of the fair value hierarchy due to a lack of an active market for this term loan or a similar loan instrument.

The following are the future minimum principal payment obligations under all of the Company’s outstanding debt as of September 30, 2021 (in thousands):

9 unchanged sentences

Deferred income tax provision (benefit):

Total deferred income tax provision (benefit)

Income tax provision (benefit)

The components of income (loss) from continuing operations before income taxes and equity in earnings of equity method investments for the fiscal years are as follows (in thousands):

Total deferred income tax benefit

Income tax benefit

The components of income (loss) from continuing operations before income taxes for the fiscal years are as follows (in thousands):

Year Ended September 30,

Income before income taxes

The differences between the income tax provision (benefit) on income (loss) from continuing operations including income from equity in earnings (losses) of equity method investments and income taxes computed using the applicable

The differences between the income tax provision (benefit) 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, 2021, 2020 and 2019 are as follows (in thousands):

Year Ended September 30,

Income tax provision computed at federal statutory rate

Income tax benefit computed at federal statutory rate

State income taxes, net of federal benefit

2 unchanged sentences

Change in deferred tax asset valuation allowance

Net increase in uncertain tax positions

Impact of change in uncertain tax positions

Global intangible low taxed income, net of foreign tax credits

Impact of tax rate changes

Non-deductible expenses

Transition tax

Deferred state rate change due to acquisition

Prior year true ups

Transition tax and other true-ups

Research and development expense deduction

Foreign derived intangible income

Income tax provision (benefit)

The Company has not provided deferred income taxes on the outside basis differences of its foreign subsidiaries.

The Company maintains its general assertion of indefinite reinvestment as of September 30, 2020.

The Company provided immaterial deferred income taxes, which includes all related income taxes and foreign withholding taxes on the outside basis differences of its held for sale foreign subsidiaries.

The Company repatriated foreign cash during the fourth quarter from the subsidiaries included in the assets held for sale and incurred $ 4.1 million of tax expense, net of foreign tax credits.

Any future repatriations are not expected to have a material impact to the Company.

The deferred income taxes on the outside basis differences are not material because the path to disposal of these legal entities will primarily be treated as sales of assets.

The Company has not provided deferred income taxes on the outside basis differences of its foreign subsidiaries which are not held for sale and part of the continuing operations business.

For continuing operations the Company maintains its general assertion of indefinite reinvestment as of September 30, 2021.

The foreign earnings are expected to be reinvested in foreign operations and acquisitions.

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Right-of-use assets

Other liabilities

Deferred tax liabilities

1 unchanged sentence

Net deferred tax asset (liability)

The deferred tax assets on the balance sheet for September 30, 2020 also includes a $ 1.6 million deferred tax charge related to the company’s intercompany profit elimination.

ASC Topic 740, Income Taxes , 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.

Not included in the net deferred tax asset (liability) shown above are long-term assets held for sale of $ 3.2 million and long-term liabilities held for sale of $ 6.5 million as of September 30, 2021.

Not included in the net deferred tax asset (liability) shown above are long-term assets held for sale of $ 1.1 million and long-term liabilities held for sale of $ 0.1 million as of September 30, 2020.

The deferred tax assets on the balance sheets for September 30, 2021 and 2020 also include $ 2.3 million and $ 1.6 million deferred tax charge 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.

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The Company evaluates the profitability of each tax-paying component on a historic cumulative basis and a forward-looking basis in the course of performing this analysis.

After evaluating all the relevant positive and negative evidence as of March 31, 2018, the Company concluded that it was more likely than not that a substantial portion of the U.S.

deferred tax assets would be realized.

In the second quarter of fiscal year 2018 the Company reached a significant level of cumulative profitability in the U.S., coupled with an improved outlook of U.S.

During the full fiscal year 2018, the Company reduced its U.S.

valuation allowance against its U.S.

net deferred tax assets resulting in a tax benefit of $ 77.2 million.

In the fourth quarter of fiscal year 2020 the Company reduced its U.S.

valuation allowance by an additional $ 1.0 million based on its conclusion that it is more likely than not that there will be sufficient future foreign source income to realize the foreign tax credit carryover balance held in the United States.

The remaining portion of the Company’s U.S.

valuation allowance is related to the realizability of certain state tax credits and net operating loss carry-forwards.

The Company continues to maintain valuation allowances against net deferred tax assets in certain foreign tax-paying components as of the end of fiscal year 2020.

After evaluating all the relevant positive and negative evidence, the Company reduced its valuation allowance against certain foreign net deferred tax assets resulting in a tax benefit of $ 2.0 million in fiscal year 2021.

The Company continued to hold a U.S.

valuation allowance related to the realizability of certain state tax credits and net operating loss carry-forwards.

The Company also maintains valuation allowances against net deferred tax assets in certain foreign tax-paying components as of the end of fiscal year 2021.

As of September 30, 2021, the Company has federal, state and foreign net operating loss carry-forwards of approximately $ 2.3 million, $ 133.4 million and $ 19.6 million, respectively.

Included in the federal net operating loss carry-forwards are $ 8.8 million of losses that can be carried forward indefinitely, while the remaining losses expire at various dates through 2030.

The federal net operating loss carry-forwards expire at various dates through 2030.

As of September 30, 2021, the Company had federal research and development tax credit carry-forwards of $ 0.3 million.

These credit carry-forwards will expire at various dates beginning in 2037 through 2040.

These credit carry-forwards will expire in 2041.

The Company has federal foreign tax credit carry-forwards of $ 0.7 million.

These credit carry-forwards will expire at various dates beginning in 2027 through 2031.

The Company also has $ 5.7 million of state credits which begin to expire in 2034, while some of these credits have an unlimited carryover period.

During the fiscal year 2018, the Tax Cuts and Jobs Act (“Tax Reform”) was enacted in the U.S., making significant tax law changes affecting the Company.

In accordance with international tax reform regulations, the Company recorded a toll charge in the U.S.

also has $ 5.5 million of state credits which begin to expire in 2034, while some of these credits have an unlimited carryover period.

During the fiscal year 2018, the Tax Cuts and Jobs Act (“Tax Reform”) was enacted in the United States, making significant tax law changes affecting the Company.

In accordance with international tax reform regulations, the Company recorded a toll charge in the United States.

on its previously untaxed accumulated foreign earnings.

5 unchanged sentences

After all adjustments had been recorded, the Company realized a toll charge of $ 11.0 million, net of foreign tax credits.

In March 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act which contains numerous income tax provisions among other tax and non-tax provisions.

Some of these income tax provisions have retroactive effects on years before the date of enactment.

The Company evaluated the CARES Act legislation in relation to income taxes and determined that the CARES Act income tax provisions do not have a material impact on its income tax provision.

The Company has performed studies to determine if there are any annual limitations on the federal net operating losses under the Section 382 of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code.

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.

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.

Certain limitations have been calculated, and 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.

5 unchanged sentences

Additions for tax positions in current year

Reduction for tax positions in prior year

Net reductions from lapses in statutes of limitations

Balance at September 30, 2018

Additions for tax positions in current year

Additions for tax positions in prior year

Reductions from lapses in statutes of limitations

Reductions from settlements with taxing authorities

Balance at September 30, 2019

1 unchanged sentence

Reductions from lapses in statutes of limitations

Reductions from settlements with taxing authorities

Balance at September 30, 2020

Reductions from lapses in statutes of limitations

Balance at September 30, 2021

All of the unrecognized tax benefits for the fiscal year ended September 30, 2021 would impact the effective tax rate if recognized.

Not included in the September 30, 2021 balance shown above is a liability of $ 2.3 million which is presented as a long-term liability held for sale on the Company’s consolidated balance sheets.

The Company recognizes interest related to unrecognized benefits as a component of the income tax provision (benefit), of which $ 1.1 million, $ 1.1 million and $ 1.1 million, respectively, was recognized for the fiscal years ended September 30, 2021, 2020 and 2019.

In fiscal year 2019, the Company recorded $ 13.4 million of unrecognized tax benefits with the acquisition of GENEWIZ.

All unrecognized tax benefits recorded with the acquisition of GENEWIZ are part of an indemnification agreement with the sellers.

All unrecognized tax benefits recorded with the acquisition of GENEWIZ were part of an indemnification agreement with the sellers.

This unrecognized tax position was reversed in fiscal year 2021 due to the expiration of its statute of limitations.

The corresponding indemnification asset was also written off during the year as a component of other expenses.

The Company is subject to U.S.

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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 an amount in the range of $ 2.5 million to $ 17.7 million in the next 12 months due to statute of limitations expirations.

The Company currently anticipates that it is reasonably possible that the unrecognized tax benefits and accrued interest on those benefits will be reduced by $ 0.4 million in the next 12 months due to statute of limitations expirations.

Derivative Instruments

19 unchanged sentences

and "Accrued expenses and other current liabilities".

Postretirement Benefits

Defined Benefit Pension Plans

The Company has three active defined benefit pension plans (collectively, the “Plans”), including legacy Taiwan Plan, the legacy Switzerland Plan, and the newly acquired Tec-Sem Plan.

The Plans cover substantially all of the Company’s employees in Switzerland and Taiwan.

Retirement benefits are generally earned based on years of service and the level of compensation during active employment, but the level of benefits varies within the Plans.

Eligibility is determined in accordance with local statutory requirements.

The Company uses September 30th as a measurement date to determine net periodic benefit costs, benefit obligations and the value of plan assets for all plans.

The following tables set forth the funded status and amounts recognized in the Company’s Consolidated Balance Sheets as of September 30, 2020 and 2019 (in thousands):

September 30,

Benefit obligation at beginning of fiscal year

Benefit obligation through acquisition

Interest cost

Actuarial loss

Benefits paid

Employee contributions

Settlements paid

Curtailment gain

Foreign currency translation

Benefit obligation at end of fiscal year

Fair value of assets at beginning of fiscal year

Fair value of assets through acquisition

Actual return on plan assets

Disbursements

Employer contributions

Employee contributions

Settlements paid

Foreign currency translation

Fair value of assets at end of fiscal year

Accrued benefit obligation

The accumulated benefit obligation of the Plans is $ 13.2 million and $ 11.4 million, respectively, at September 30, 2020 and 2019.

All Plans have an accumulated benefit obligation and projected benefit obligation in excess of plans’ assets at September 30, 2020.

The following table provides pension-related amounts and their classification within the accompanying Consolidated Balance Sheets as of September 30, 2020 and 2019 (in thousands):

September 30,

Accrued compensation and benefits

Long-term pension liability

The Company bases its determination of pension expense on a market-related valuation of assets, which reduces year-to-year volatility.

This market-related valuation recognizes investment gains or losses over a five-year period from the year in which they occur.

Investment gains or losses represent the difference between the expected return calculated using the market-related value of assets and the actual return on assets.

Since the market-related value of assets recognizes gains or losses over a five-year period, the future value of assets will be impacted as previously deferred gains or losses are recognized.

At September 30, 2020 and 2019, the Company had cumulative unrecognized net actuarial gains of $ 1.5 million and $ 0.9 million, respectively, which are amortized into net periodic benefit cost over the average remaining service period of active Plans’ participants.

The Company had cumulative unrecognized investment gains of $ 0.6 million and $ 0.5 million at September 30, 2020 and 2019, under the Plans which remain to be recognized in the calculation of the market-related values of assets.

The components of the Company’s net pension cost for the fiscal years ended September 30, 2020, 2019 and 2018 are as follows (in thousands):

Year Ended September 30,

Interest cost

Amortization of losses

Expected return on plan assets

Net periodic pension cost

Settlement gain

Total pension cost (gain)

The following changes in Plans’ assets and benefit obligations were recognized in other comprehensive income (loss) as of September 30, 2020 and 2019 (in thousands):

September 30,

Amortization of net loss

Total recognized in other comprehensive income (loss)

Total recognized in net periodic pension cost and other comprehensive income (loss)

Weighted-average assumptions used to determine the projected benefit obligation for the fiscal years ended September 30, 2020, 2019 and 2018 are as follows:

Year Ended September 30,

Discount rate

Expected return on plan assets

Expected rate of compensation increases

In selecting the appropriate discount rates for the Plans, the Company uses country-specific information, adjusted to reflect the duration of the particular plan.

The expected return on plan assets is based on an evaluation of fixed income yield curves and equity return assumption studies applied to the Plans’ asset allocations.

The fair value of plan assets for the two Swiss Plans and the Taiwan Plan were $ 7.4 million and $ 0.1 million, respectively, at September 30, 2020 .

The assets of the Swiss Plans are invested in a collective fund with multiple employers through a Swiss insurance company, which is a customary practice for Swiss pension plans.

The Company does not have any rights or an investment authority over the Plan’s assets which are invested primarily in highly rated debt securities.

The assets of the Taiwan Plan are invested with a trustee selected by the Taiwan government, and the Company has no investment authority over the Plan’s assets.

The allocation of the Plans’ assets at September 30, 2020 is as follows:

September 30,

Cash and cash equivalents

Debt securities

Equity securities

The fair values of pension assets by asset category and by level at September 30, 2020 are as follows (in thousands):

As of September 30, 2020

Swiss Life collective foundation

Taiwan collective trust

The fair values of pension assets by asset category and by level at September 30, 2019 are as follows (in thousands):

As of September 30, 2019

Swiss Life collective foundation

Taiwan collective trust

Please refer to Note 21, "Fair Value Measurements"

for a description of the levels of inputs used to determine fair value measurements.

Benefit payments expected to be paid over the next five fiscal years and thereafter are as follows (in thousands):

Fiscal year ended September 30,

The Company expects to contribute $ 0.4 million to the Plans in fiscal year 2021 to meet the minimum funding requirements of the Plans.

Defined Contribution Plans

The Company sponsors a defined contribution plan that meets the requirements of Section 401(k) of the Internal Revenue Code.

All United States employees who meet minimum age and service requirements are eligible to participate in the plans.

The plans allow employees to invest, on a pre-tax basis, a percentage of their annual salary and bonus subject to statutory limitations.

The Company matches a portion of their contributions on a pre-tax basis up to a maximum amount of 4.5 % of deferred pay.

The expense recognized for the defined contribution plans was $ 5.2 million, $ 4.6 million and $ 3.4 million, respectively, for the fiscal years ended September 30, 2020, 2019 and 2018.

Stockholders’ Equity

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Balance at September 30, 2021

Unrealized net holding gains (losses) on available-for-sale marketable securities are reclassified from accumulated other comprehensive income into results of operations at the time of the securities’ sale, as described in Note 5, “Marketable Securities.” Gains (losses) related to defined benefit pension plan settlements are reclassified from accumulated other comprehensive income into results of operations at the time of the settlement, as described in Note 14, “Postretirement Benefits.” Defined benefit pension plan curtailments are recognized as reclassifications from accumulated other comprehensive income and corresponding reductions in pension liabilities and net pension cost, as described in Note 14, “Postretirement Benefits.”

Defined benefit pension plan curtailments are recognized as reclassifications from accumulated other comprehensive income and corresponding reductions in pension liabilities and net pension cost.

Equity Incentive Plans

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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 2015 Plan

provides for the issuance of a maximum of 5,000,000 shares of common stock in addition to the stock option and restricted stock awards granted out of the 2000 Plan that were canceled or forfeited after February 5, 2015 upon expiration of the 2000 Plan on March 31, 2015.

Restricted Stock Activity

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 2000 Plan or the 2015 Plan are forfeited, expire or are cancelled.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the fiscal year ended September 30, 2021:

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Year ended September 30, 2019

Among the total restricted stock units granted, 134,993 shares were granted to the employees who belong to the discontinued operations in the year ended September 30, 2018.

Time-Based Grants

Among the total restricted stock units granted, 98,783 , 119,978 , and 196,935 shares, respectively, were granted to the employees who belong to the discontinued operations in the year ended September 30, 2021, 2020 and 2019.

As of September 30, 2021, 285,570 shares granted to these employees were not vested and expected to be vested upon the closing of the sale.

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 the first anniversary of the grant date, one -third vest at the second anniversary of the grant date and one -third vest at the third anniversary of the grant date, subject to the award holders meeting service requirements.

The stock awards granted to the members of the Company’s Board of Directors include stock awards, restricted stock awards and deferred stock and restricted stock units.

Stock-Based Awards – Board of Directors

The stock-based awards, granted to the members of the Company’s Board of Directors include stock awards, restricted stock awards and deferred stock and restricted stock units.

Stock awards granted during fiscal years 2021, 2020 and 2019 were vested upon issuance.

Restricted stock awards granted during fiscal year 2018 were subject to a one-year vesting period.

Certain members of the Board of Directors have elected to defer receiving their annual stock awards and related quarterly dividends until they attain a certain age or cease to provide services as the Company’s Board members.

Annual deferred restricted stock units granted during fiscal years 2021, 2020 and 2019 vested upon issuance.

Annual deferred restricted stock units granted during fiscal year 2018 were subject to a one-year vesting period.

Performance-Based Grants

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.

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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 period, whichever is lower.

On February 8, 2017, the stockholders approved the 2017 Employee Stock Purchase Plan (the “2017 Plan”) to replace the 1995 Employee Stock Purchase Plan (the “1995 Plan”) which was terminated upon the expiration of the offering period ending on July 31, 2017.

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, 2021, 752,171 shares of common stock remain available for purchase under the 2017 Plan.

During fiscal year ended September 30, 2020 and 2019, the Company issued 133,597 shares and 131,042 shares, respectively, under the 2017 Plan.

During the fiscal year ended September 30, 2021 and 2020, the Company issued 106,516 shares and 133,597 shares, respectively, under the 2017 Plan.

Earnings per Share

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Year Ended September 30,

Income from continuing operations

Income (loss) from discontinued operations, net of tax

Net loss attributable to noncontrolling interest

Net income attributable to Brooks Automation, Inc.

Loss from continuing operations

Income from discontinued operations, net of tax

Weighted average common shares outstanding used in computing basic earnings per share

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Weighted average common shares outstanding used in computing diluted earnings per share

Basic net income per share attributable to Brooks Automation, Inc.

common stockholders:

Income from continuing operations

Income (loss) from discontinued operations, net of tax

Basic net income per share attributable to Brooks Automation, Inc.

Diluted net income per share attributable to Brooks Automation, Inc.

common stockholders:

Income from continuing operations

Income (loss) from discontinued operations, net of tax

Diluted net income per share attributable to Brooks Automation, Inc.

common stockholders

Basic net income per share:

Loss from continuing operations

Income from discontinued operations, net of tax

Basic net income per share

Diluted net income per share:

Loss from continuing operations

Income from discontinued operations, net of tax

Diluted net income per share

Dividend declared per share

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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 Company disaggregates revenue based on the geographic location in which customer orders are placed and by reporting unit.

Revenue from contracts with customers is attributed to geographic areas based on locations in which the customer orders are placed.

The Company has three operating and three reportable segments consisting of Brooks Semiconductor Solutions Group, Brooks Life Sciences Products and Brooks Life Sciences Services.

The Company has six reporting units, including three reporting units within the Brooks Semiconductor Solutions Group operating segment, one reporting unit within Brooks Life Sciences Products operating segment and two reporting units within the Brooks Life

Sciences Services operating segment.

The following is revenue by geographic location and reporting unit for the fiscal years ended September 30, 2020 and 2019 (in thousands):

The following is revenue by significant business line for the fiscal years ended September 30, 2021, 2020 and 2019 (in thousands):

Year ended September 30,

Geographic Location

North America

Asia/Pacific/Other

Reporting Unit

Automation Solutions

Contamination Control Solutions

Global Semiconductor Services

Brooks Semiconductor Solutions Group

Significant Business Line

Brooks Life Sciences Products

Sample Repository Solutions

Brooks Life Sciences Services

Genomic Services

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.

before payment is due.

Accounts receivable do not bear interest and are recorded at the invoiced amount.

The Company maintains an allowance for doubtful accounts 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 doubtful accounts based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends and historical experience.

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 and historical experience.

Accounts receivable, net were $ 119.9 million and $ 94.8 million at September 30, 2021 and September 30, 2020, respectively.

1 unchanged sentence

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 within the Brooks Life Sciences segments where the right to payment 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.

These amounts typically relate to contracts where the right to invoice 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.

Contract asset balances which are included within “Prepaid expenses and other current assets” on the Company’s Consolidated Balance Sheet, were $ 15.3 million and $ 14.8 million at September 30, 2021 and September 30, 2020, respectively.

Deferred Commissions.

Deferred commissions represent a direct and incremental cost of obtaining a contract.

These amounts primarily relate to sales commissions within the Brooks Life Sciences segments and are deferred and amortized over a 60 -month period, which represents the average period of contract performance.

The Company classifies deferred commissions as noncurrent as the original amortization period of this asset is greater than one year.

Deferred commissions balances are included within “Other assets” on the Company’s Consolidated Balance Sheet.

Deferred commissions were $ 0.4 million and $ 0.8 million at September 30, 2020 and September 30, 2019, respectively.

The Company recorded $ 0.4 million of amortization expense related to deferred commissions for the year ended September 30, 2020.

Contract Liabilities.

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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.

As part of the Company’s cumulative effect adjustment, incremental costs associated with obtaining a contract were capitalized and have been classified as deferred commissions within the Company’s Consolidated Balance Sheet.

These amounts primarily relate to sales commissions within the Brooks Life Sciences segments and are being amortized over a 60 -month period, which represents the average period of contract performance.

Incremental costs associated with obtaining a contract were capitalized and have been classified as deferred commissions within the Company’s Consolidated Balance Sheet.

These amounts are being amortized over a 60 -month period, which represents the average period of contract performance.

The Company did not capitalize any sales commissions during the fiscal year ended September 30, 2021 as the amount of sales commissions that qualified for capitalization during the reporting period was insignificant.

Sales commissions incurred during the reporting period have been expensed as incurred.

These costs are recorded within “Selling, general, and administration expenses”.

These costs are recorded within “Selling, general, and administration expenses” in the Consolidated Statements of Operations.

The Company has concluded that none of its costs incurred in fulfillment of customer contracts meet the capitalization criteria.

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Significant Customers

No customers accounted for more than 10% of the Company’s consolidated revenue during the fiscal years ended September 30, 2020, 2019 and 2018.

No customers accounted for more than 10% of the Company’s consolidated continuing operations revenue during the fiscal years ended September 30, 2021, 2020 and 2019.

No customers accounted for more than 10% of the Company’s total receivables during the fiscal year ended September 30, 2021 and 2020.

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The Company’s Chief Executive Officer is the Company’s chief operating decision maker.

The Company operates in three reportable segments:

the Brooks Semiconductor Solutions Group segment, the Brooks Life Sciences Services segment and the Brooks Life Sciences Products segment.

The Company operates in two reportable segments:

the Life Sciences Products segment and the Life Sciences Services segment.

These reportable segments also represent the Company’s operating segments.

The Company previously operated in two reportable segments:

the Brooks Semiconductor Solutions Group segment and the Brooks Life Sciences segment.

The Brooks Life Sciences segment consisted of the Sample Management operating segment and the GENEWIZ operating segment that aggregated into one reportable segment.

During fiscal year 2020, the Company reorganized its operating segments to better align

with its business activities in connection with its recent acquisitions and the Company’s strategic vision.

The Company previously operated in three reportable segments:

the Brooks Semiconductor Solutions Group segment, the Life Sciences Products segment, and the Life Sciences Services segment.

As discussed in Note 3, “Discontinued Operations”, our Brooks Semiconductor Solutions Group reportable segment has been classified as a discontinued operation.

Historical information has been adjusted to reflect the new reportable segments.

The Brooks Semiconductor Solutions Group segment provides a variety of products, services and solutions that enable improved throughput and yield in controlled operating environments, as well as an extensive range of support services.

The solutions include atmospheric and vacuum robots, robotic modules, tool automation systems, contamination control of wafer carrier front opening unified pods and reticle storage.

The support services include repair services, diagnostic support services, and installation services in support of the products, which enable customers to maximize process tool uptime and productivity.

This segment also provides end-user customers with spare parts and productivity enhancement upgrades to maximize tool productivity.

The Brooks Life Sciences Services segment provides comprehensive sample management programs, integrated cold chain solutions, informatics, as well as sample-based laboratory services to advance scientific research and support drug development.

The segment’s service offerings include sample storage, genomic sequencing, gene synthesis, laboratory processing services, laboratory analysis, and other support services which are provided to a wide range of life science customers, including pharmaceutical companies, biotechnology companies, biorepositories and research institutes.

The Brooks Life Sciences Products segment provides automated cold sample management systems for compound and biological sample storage, equipment for sample preparation and handling, consumables and instruments, that help customers manage samples throughout their research discovery and development workflows.

The segment’s product offerings include the automated cold storage systems, cryogenic storage systems, consumables and instruments and the associated services business for these products

The Life Sciences Products segment provides automated cold sample management systems for compound and biological sample storage, equipment for sample preparation and handling, consumables, and instruments, that help customers manage samples throughout their research discovery and development workflows.

The segment’s product offerings include automated cold storage systems, cryogenic storage systems, consumables and instruments and the associated services business for these products.

The Life Sciences Services segment provides comprehensive sample management programs, integrated cold chain solutions, informatics, as well as sample-based laboratory services to advance scientific research and support drug development.

The segment’s service offerings include sample storage, genomic sequencing, gene synthesis, laboratory processing services, laboratory analysis, biospecimen procurement services and other support services which are provided to a wide range of life science customers, including pharmaceutical companies, biotechnology companies, biorepositories and research institutes.

The Company considers adjusted operating income, which excludes charges related to amortization of completed technology, the acquisition accounting impact on inventory contracts acquired and restructuring related charges as the primary performance metric when evaluating the business.

1 unchanged sentence

Year Ended September 30,

Brooks Semiconductor Solutions Group

Brooks Life Sciences Products

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Operating income:

Brooks Semiconductor Solutions Group

Brooks Life Sciences Products

2 unchanged sentences

Amortization of completed technology

Acquisition accounting impact on inventory contracts acquired

Restructuring related charges

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Other expenses, net

Income before income taxes

Semiconductor

Solutions Group

Loss before income taxes

Sciences Products

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Deferred tax assets

Assets held for sale

Revenue from external customers is attributed to geographic areas based on locations in which customer orders are placed.

1 unchanged sentence

Year Ended September 30,

North America

Geographic Location:

Asia / Pacific/ Other

North America

The majority of the Company’s net revenue in North America is generated in the United States which amounted to $ 320.8 million, $ 253.5 million and $ 224.5 million, respectively, during fiscal years ended September 30, 2021, 2020 and 2019.

The geographic location of an OEM is not indicative of where the products will eventually be used.

The geographic area for the orders is determined by the onward sale of an OEM system which incorporates the sub-systems and/or components.

Property, plant and equipment by geographic area as of September 30, 2021 and 2020 are as follows (in thousands):

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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 comparables, and discounted cash flow projections.

The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, 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.

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Foreign exchange contracts

Acquisition-related contingent consideration

Total Liabilities

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Cash Equivalents

Cash equivalents $ 6.2 million at September 30, 2019 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.

Cash equivalents of $ 0.1 million and $ 10.0 million, respectively, as of September 30, 2020 and 2019 consist primarily of treasury bills and agency bonds and are classified within Level 2 of the fair value hierarchy because they are not actively traded.

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.

Cash equivalents consist primarily of treasury bills and agency bonds and are classified within Level 2 of the fair value hierarchy because they are not actively traded.

Available-For-Sale Securities

Available-for-sale securities of $ 3.2 million and $ 37.0 million, respectively, at September 30, 2020 and 2019 consist of U.S.

Treasury Securities, Municipal Securities, Bank Certificate of Deposits, Corporate Securities and Other Debt Securities.

Available-for-sale securities consist of municipal securities, bank certificate of deposits, corporate securities and other debt securities.

The securities are valued using matrix pricing and benchmarking and classified within Level 2 of the fair value hierarchy because they are not actively traded.

1 unchanged sentence

Foreign Exchange Contracts

Foreign exchange contract assets and liabilities amounted to $ 0.4 million and $ 0.2 million, respectively, at September 30, 2020.

Foreign exchange contract assets and liabilities amounted less than $0.1 million and $ 0.3 million, respectively, at September 30, 2019.

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 due to a lack of an active market for these contracts.

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 due to a lack of an active market for these contracts

Acquisition-related Contingent Consideration

Acquisition-related contingent consideration is measured and reported at fair value using the real options method based on the unobservable inputs that are significant to the fair value and classified with Level 3 of the fair value

The amount is contingent based on the acquired business’ performance for the twelve-month period ending December 31, 2021.

Please refer to Note 4, “Acquisitions” for further detail.

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.

Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

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Commitments and Contingencies

GENEWIZ Tariff Matter

As part of the Company’s continued integration of GENEWIZ, which was acquired in November 2018, the Company initiated a review, with the assistance of a third-party consultant, of the transaction value that the Company has used to calculate tariffs on inter-company imports of samples shipped from its GENEWIZ business.

As a result of the third-party review and in light of a new interpretation surrounding the valuation method used to calculate the estimated transaction value, the Company revised its estimate of the tariffs owed and as a result recorded a liability of $ 7.0 million in the fiscal year 2021.

Of the total liability, $ 2.7 million is for the period prior to the acquisition of GENEWIZ and an additional $ 4.3 million is for the period since the Company acquired GENEWIZ in November 2018.

The Company intends to pay any tariffs determined to be owed.

The Company does not expect to incur any significant penalties associated with such tariffs.

As a result of the change in estimate, basic net income per share decreased $ 0.09 for the fiscal year 2021.

Diluted net income per share also decreased $ 0.09 for the same period.

Letters of Credit

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Purchase Commitments

At September 30, 2020, the Company has non-cancelable commitments of $ 163.9 million, including purchase orders for inventory of $ 127.9 million, information technology related commitments of $ 22.6 million, China facility commitments of $ 13.2 million and other commitments of $ 0.2 million.

At September 30, 2021, the Company has non-cancelable commitments of $ 65.9 million, including purchase orders for inventory of $ 44.0 million, information technology related commitments of $ 15.9 million, and China facility commitments of $ 6.0 million.

Contingencies

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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.

Quarterly Information (Unaudited)

Our revenue, gross profit, operating income (loss), net income, income (loss) from continuing operations, basic and diluted earnings per share on a quarterly basis are presented below (in thousands, except per share amounts):

Year Ended September 30, 2021

Operating income (loss)

Income (loss) from continuing operations

Basic net income per share

Diluted net income per share

Year Ended September 30, 2020

Operating loss

Loss from continuing operations

Basic net income per share

Diluted net income per share

Subsequent Events

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data