What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-11-25 compared with 2021-11-24 · 363 added, 493 removed, 954 unchanged (47% of the section changed)

Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Balance Sheets as of September 30, 2022 and 2021

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Brooks Automation, Inc.

To the Board of Directors and Stockholders of Azenta, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

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

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

and its subsidiaries (the “Company”) as of September 30, 2022 and 2021, 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, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases effective October 1, 2019.

Basis for Opinions

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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.

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.

Goodwill Impairment Assessments – Life Sciences Products and Life Sciences Services Reporting Units

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s consolidated goodwill balance was $513.6 million as of September 30, 2022, of which $154.6 million relates to the Life Sciences Products reporting unit and $359.0 million relates to the Life Sciences Services reporting unit.

In the fourth quarter of 2022, the Company experienced a decline in the stock price resulting in the market capitalization being less than the carrying value.

Management considered the decline in the market capitalization being less than the carrying value of the reporting units in the evaluation of goodwill impairment indicators and determined it appropriate to perform a quantitative assessment of both the reporting units as of September 30, 2022.

Management determines fair values of the reporting units based on an income approach in accordance with the discounted cash flow method.

Application of the goodwill impairment test requires judgment.

Different assumptions of revenue growth rates, gross margin percentage, selling, general and administrative expense percentage, and the discount rate used in the discounted cash flow method 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 assessments of the Life Sciences Products and Life Sciences Services reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the Life Sciences Products and Life Sciences Services reporting units;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, gross margin percentage, and the discount rate for the Life Sciences Products reporting unit and revenue growth rates, gross margin percentage, selling, general and administrative expense percentage, and the discount rate for the Life Sciences Services reporting unit;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to 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.

These procedures included testing the

effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the Life Sciences Products and Life Sciences Services reporting units.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimates of the reporting units;

(ii) evaluating the appropriateness of the discounted cash flow methods;

(iii) testing the completeness and accuracy of the underlying data used in the methods;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, gross margin percentage, and the discount rate for the Life Sciences Products reporting unit and revenue growth rates, gross margin percentage, selling, general and administrative expense percentage, and the discount rate for the Life Sciences Services reporting unit.

Evaluating management’s significant assumptions related to revenue growth rates and gross margin percentage for the Life Sciences Products reporting unit and revenue growth rates, gross margin percentage, and selling, general and administrative expense percentage for the Life Sciences Services reporting unit involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units;

(ii) consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow methods and (ii) the reasonableness of the significant assumption related to the discount rates.

/s/ PricewaterhouseCoopers LLP

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We have served as the Company’s auditor since 2016.

BROOKS AUTOMATION, INC.

CONSOLIDATED BALANCE SHEETS

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September 30,

(In thousands, except share and per share data)

Current assets

Cash and cash equivalents

Marketable securities

Accounts receivable, net

Short-term marketable securities

Accounts receivable, net of allowance for expected credit losses ($ 5,162 and $ 4,318 , respectively)

Derivative asset

Short-term restricted cash

Prepaid expenses and other current assets

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Current liabilities

Current portion of long-term debt

Accounts payable

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Accrued compensation and benefits

Accrued restructuring costs

Accrued income taxes payable

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Accumulated other comprehensive income

Treasury stock, at cost - 13,461,869 shares

Accumulated deficit

Treasury stock, at cost - 13,461,869 shares at September 30, 2022 and September 30, 2021

Retained earnings (accumulated deficit)

Total stockholders' equity

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

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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Loss on extinguishment of debt

Other expenses, net

Other expenses

Loss before income taxes

Income tax benefit

Income tax provision (benefit)

Loss from continuing operations

Income from discontinued operations, net of tax

Basic net income per share:

Basic net (loss) income per share:

Loss from continuing operations

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Basic net income per share

Diluted net income per share:

Diluted net (loss) income per share:

Loss from continuing operations

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

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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(In thousands)

Other comprehensive income, net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation reclassification adjustments included in income from discontinued operations (Note 2)

Net investment hedge currency translation adjustment, net of tax effects of $ 31,769 for the fiscal year 2022

Foreign currency translation adjustments

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

Unrealized gain (losses) on marketable securities, net of tax effects of $( 3,729 ), $ 0 , and $ 0 for the fiscal year 2022, 2021, and 2020

Actuarial gains (losses), net of tax effects of ($ 121 ), ($ 77 ), and $ 27 for the fiscal years 2022, 2021, and 2020

Total other comprehensive (loss) income, net of tax

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

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

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Amortization of premium on marketable securities and deferred financing costs

Earnings of equity method investments

Deferred income taxes

Loss on extinguishment of debt

Other losses on disposals of assets

Gain on divestiture, net of tax

Adjustment to the gain on divestiture, net of tax

Contingent transaction fees paid stemming from divestiture

(Gain) loss on disposals of property, plant and equipment

(Gain) loss on divestiture, net of tax

( 2,130,265 )

Fees paid stemming from divestiture

Taxes paid stemming from divestiture

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Accounts receivable

Prepaid expenses and other assets

Accounts payable

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Accrued compensation and tax withholdings

Accrued restructuring costs

Proceeds from recovery on insurance claim

Accrued expenses and other liabilities

Net cash provided by operating activities

Other current assets and liabilities

Net cash (used in) provided by operating activities

Cash flows from investing activities

Purchases of property, plant and equipment

Purchases of technology intangibles

Purchases of marketable securities

Sales of marketable securities

Maturities of marketable securities

Proceeds from divestiture

( 1,975,599 )

Sales and maturities of marketable securities

Proceeds from divestiture, net of cash transferred

Adjustment to proceeds from divestiture

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Settlement (issuance) of note receivables

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities

Proceeds from term loans, net of discount

Proceeds from issuance of common stock

Payments of financing costs

Principal payments on debt

Payments of finance leases

Payment for contingent consideration related to acquisition

Common stock dividends paid

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Effects of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

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

September 30,

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

Short-term restricted cash

Long-term restricted cash included in other assets

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

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Comprehensive

Income (Loss)

Retained Earnings

Stockholders’ Equity

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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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Common stock dividends declared, at $ 0.10 per share

Unrealized gain on derivative asset, net of tax effect of $ 31,769

Foreign currency translation adjustments reclassed out of accumulated other comprehensive income related to discontinued operations

Foreign currency translation adjustments

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

BROOKS AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nature of the Business

Brooks Automation, Inc.

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

Nature of the Operation

(“Azenta”, 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.

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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.

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The discussion in the notes to these Consolidated Financial Statements, unless otherwise noted, relate solely to the Company's continuing operations.

On February 1, 2022, the Company completed the sale of the semiconductor automation business for $ 2.9 billion in cash.

Risks and Uncertainties

The Company is subject to risks common to companies in the markets it serves, including, but not limited to, global economic and financial market conditions, fluctuations in customer demand, acceptance of new products, development by its competitors of new technological innovations, risk of disruption in its supply chain, the implementation of tariffs and export controls, dependence on key personnel, protection of proprietary technology, and compliance with domestic and foreign regulatory authorities and agencies.

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.

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 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.

The Company is subject to risks common to companies in the markets it serves, including, but not limited to, global economic and financial market conditions, fluctuations in customer demand, acceptance of new products, development by its competitors of new technological innovations, risk of disruption in its supply chain, the implementation of tariffs and export controls, inflation, dependence on key personnel, protection of proprietary technology, and compliance with domestic and foreign regulatory authorities and agencies.

Throughout the pandemic, the Company’s operations have not been significantly interrupted as the Company has adapted to having required employees on site and the balance of employees mostly working from home .

The Company has followed government guidance in each region and has implemented the U.S.

Centers for Disease Control and Prevention 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 negative 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.

Future impacts of COVID-19 on the Company’s financial results are not fully determinable, as the full impact of the pandemic on the economy and markets which the Company serves is as yet unknown, but will be dependent, in part, on future variants of the virus and vaccine effectiveness against these variants and new or prolonged government responses to the pandemic.

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 products and services and the potential negative impact on its operations if there is an 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

Principles of Consolidation and Basis of Presentation

The accompanying Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries.

The accompanying Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

All intercompany balances and transactions have been eliminated in consolidation.

The Company applies the equity method of accounting to investments that provide it with the ability to exercise significant influence over the entities in which it lacks controlling financial interest and is not a primary beneficiary.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period.

Significant estimates are associated with recording accounts receivable, inventories, goodwill, intangible assets other than goodwill, long-lived assets, derivative financial instruments, deferred income taxes, warranty obligations, revenue recognized in accordance with the percentage of completion method, and stock-based compensation expense.

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period.

Significant estimates are associated with recording accounts receivable, inventories, goodwill, intangible assets other than goodwill, long-lived assets, derivative financial instruments, deferred income taxes, revenue over time, and stock-based compensation expense.

The Company assesses the estimates on an ongoing basis and records changes in estimates in the period they occur and become known.

Actual results could differ from these estimates.

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business - including results of operations and financial condition, sales, expenses, reserves and allowances, manufacturing and employee-related amounts - will depend on future developments that are highly uncertain.

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, including results of operations and financial condition, will depend on future developments that are highly uncertain.

This includes results from new information that may emerge concerning COVID-19 and any actions taken to contain or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets.

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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.

Foreign currency exchange gains (losses) generated from the settlement and remeasurement of these transactions are recognized in earnings and presented within “Other income (expenses), net” in the Company’s Consolidated Statements of Operations.

Net foreign currency transaction and remeasurement losses totaled $ 1.7 million, $ 1.8 million and $ 3.4 million for the fiscal years ended September 30, 2022, 2021 and 2020, respectively.

The determination of the functional currency of the Company’s subsidiaries is based on their financial and operational environment and is the local currency of all of the Company’s foreign subsidiaries.

The subsidiaries’ assets and liabilities are translated into the reporting currency at period-end exchange rates, while revenue, expenses, gains and losses are translated at the average exchange rates during the period.

The subsidiaries’ assets

and liabilities are translated into the reporting currency at period-end exchange rates, while revenue, expenses, gains and losses are translated at the average exchange rates during the period.

Gains and losses from foreign currency translations are recorded in “Accumulated other comprehensive income” in the Company’s Consolidated Balance Sheets and presented as a component of comprehensive income in the Company’s Consolidated Statements of Comprehensive Income.

The semiconductor automation business had foreign operations which had a cumulative translation adjustment balance of $ 16.6 million at the date of disposal of this business.

This amount was removed from ‘Accumulated other comprehensive income” in the Company’s Consolidated Balance Sheet during the three months ended March 31, 2022, and included within the gain on the sale of the semiconductor automation business in “Income from discontinued operations, net of tax” in the Company’s Consolidated Statement of Operations.

As a result, the Company presented a $ 16.6 million reclassification adjustment in “Accumulated other comprehensive income” in the Company’s Consolidated Balance Sheet at September 30, 2022.

Derivative Financial Instruments

The Company has transactions and balances denominated in currencies other than the functional currency of the transacting entity.

Most of these transactions carry foreign exchange risk are in Germany, the United Kingdom and China.

The Company enters into foreign exchange contracts to reduce its exposure to currency fluctuations.

The arrangements typically mature in three months or less and they do not qualify for hedge accounting.

Net gains and losses related to these contracts are recorded as a component of “Other income (expenses), net” in the accompanying Consolidated Statements of Operations and are as follows for the fiscal years ended September 30, 2022, 2021 and 2020 (in thousands):

Fiscal Year Ended September 30,

Realized gains (losses) on derivatives not designated as hedging instruments

The fair values of the forward contracts are recorded in the accompanying Consolidated Balance Sheets as “Prepaid expenses and other current assets” and “Accrued expenses and other current liabilities”.

Foreign exchange contract assets and liabilities are measured and reported at fair value based on observable market inputs and classified within Level 2 of the fair value hierarchy described in fair value measurements in Footnote 19, due to a lack of an active market for these contracts.

Hedging Activities

On February 1, 2022, the Company entered into a cross-currency swap agreement to hedge the variability of exchange rate impacts between the United States dollar and the Euro.

Under the terms of the cross-currency swap agreement, the Company notionally exchanged approximately $ 1.03 billion for approximately € 915 million at a weighted average interest rate of approximately 1.196 %.

The designated notional amount is $ 960 million and the actual interest rate is 1.283 %.

1.283 % was in the range of the market value for that day and is the true interest rate on the notional amount.

This cross-currency swap agreement expires in February 2023.

The Company has designated the cross-currency swap as a hedge of net investments against one of our Euro denominated subsidiaries which requires an exchange of the notional amounts at maturity.

At the maturity of the cross currency-swap, the Company will deliver a notional amount of € 852 million and receive a notional amount of $ 960 million at an exchange rate of 1.1261 .

This cross-currency swap is marked to market at each reporting period, representing the fair values of the cross-currency swap and any changes in fair value are recognized as a component of “Accumulated other comprehensive items, net”, on the Consolidated Statements of Comprehensive Income.

Interest accrued on the cross-currency swap is recorded within “Interest income” on the Consolidated Statements of Operations.

For the fiscal year ended September 30, 2022, the Company recorded an unrealized gain in the derivative asset of $ 124.8 million, which is $ 93 million net of

taxes, to “Accumulated other comprehensive income” and recorded “Interest income” of $ 8.2 million, on this instrument for fiscal year ended September 30, 2022.

All derivatives, whether designated as a hedging relationship or not, are recorded in the Consolidated Balance Sheets at fair value.

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The Company’s ten largest customers accounted for approximately 20 %, 19 % and 19 % of its consolidated revenue for the fiscal years ended September 30, 2022, 2021 and 2020, respectively.

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

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, marketable securities, derivative instruments, the term loan, accounts receivable, and accounts payable.

Marketable securities and derivative instruments are measured at fair value based on quoted market prices or observable inputs other than quoted market prices for identical or similar assets or liabilities.

The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their fair value due to their short-term nature.

No customers accounted for more than 10% of the Company’s consolidated revenue for fiscal years 2022, 2021 and 2020.

Fair Value Measurements

The Company measures certain financial assets and liabilities, including cash equivalents, available for sale securities, accounts receivable, accounts payable, and derivative instruments at fair value.

FASB ASC 820, Fair Value Measurement and Disclosures, establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Available for sale securities and derivative instruments are measured at fair value based on quoted market prices or observable inputs other than

quoted market prices for identical or similar assets or liabilities.

The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate their fair value due to their short-term nature.

Cash and Cash Equivalents, and Restricted Cash

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash.

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

At September 30, 2022 and 2021, cash equivalents were $ 374.8 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 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

The Company classifies long-term restricted cash balances within “Other assets” on the accompanying Consolidated Balance Sheets based upon the term of the remaining restrictions.

Accounts Receivable, Allowance for Expected Credit Losses

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

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

The Company determines the allowance based on several factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends, historical experience, and other information over the payment periods.

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

The Company reviews and adjusts the allowance for expected credit losses on a quarterly basis.

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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"

in the Consolidated Statements of Operations.

The Company does not have any off-balance-sheet credit exposure related to its customers.

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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 represents the Company’s right to use an underlying asset for the lease term and the lease liability represents the Company’s obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term.

As most of the Company’s leases do not provide an implicit rate, an incremental borrowing rate is used based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date.

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

The Company has elected April 1 st as its annual goodwill impairment assessment date.

The Company has elected April 1 st as its annual goodwill impairment

assessment date.

If the existence of events or circumstances indicates that it is more likely than not that fair values of the reporting units are below their carrying values, the Company performs additional impairment tests during interim periods to evaluate goodwill for impairment.

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An impairment loss is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit.

The Company determines fair values of its reporting units based on an income approach in accordance with the discounted cash flow method (DCF Method).

We determine fair values of our reporting units 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.

Terminal value represents a present value an investor would pay on the valuation date for the rights to the cash flows of the business for the years subsequent to the discrete cash flow projection period.

The observable inputs used in the DCF Method include discount rates set above the Company’s weighted-average cost of capital.

The Company derives discount rates that are commensurate with the risks and uncertainties inherent in the respective businesses and its internally developed projections of future cash flows.

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

In addition, to determining the fair value of 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

The Company records commitment fees and other costs directly associated with obtaining the term loan and line of credit financing as deferred financing costs which are presented as a reduction of Long-term debt on the Consolidated Balance Sheets.

Deferred financing costs were $ 0.4 million and $ 0.7 million at September 30, 2021 and 2020, respectively.

Such costs are amortized over the term of the related financing arrangement and included in “Interest expense” in the accompanying Consolidated Statements of Operations.

Amortization expense related to deferred financing costs was $ 0.3 million and $ 0.2 million for fiscal years ended September 30, 2021 and 2020, respectively, and was included in interest expense in the accompanying Consolidated Statements of Operations.

Please refer to Note 10, “Line of Credit” and Note 11, “Debt” for further information on this arrangement.

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

In addition to determining the fair value of our reporting units based on the DCF Method, we also compare the aggregate values of our net corporate assets and reporting unit fair values to our overall market capitalization and use certain market-based valuation techniques to assess the reasonableness of the reporting unit fair values determined in accordance with the DCF Method.

The key inputs used in the DCF Method include revenue growth rates, gross margin percentage, selling, general and administrative expense percentage and discount rates that are at or above our weighted-average cost of capital.

We derive discount rates that are commensurate with the risks and uncertainties inherent in the respective reporting units and our internally developed projections of future cash flows.

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 the discount rate used in the DCF Method could result in different estimates of the reporting unit’s fair value as of each testing date.

In the fourth quarter of 2022, the Company experienced a decline in its stock price resulting in the total market value of our shares of stock outstanding (our market capitalization), being less than the carrying value of its reporting units.

Therefore, as of September 30, 2022, the Company assessed several events and circumstances that could affect the significant inputs used to determine the fair value of our reporting units, including the significance of the amount of excess fair value over carrying value, updates to operating margins and cash flows, and the overall change in the economic climate.

The Company considered the decline in the market capitalization being less than the carrying value of its reporting units in its evaluation of goodwill impairment indicators and determined it appropriate to perform a quantitative assessment of both its reporting units as of September 30, 2022.

The Company’s valuation was based on the DCF method described above.

The Company concluded that there was no impairment , as the estimated fair value of the segments exceeded their carrying value.

In the event the financial performance of either of the two segments does not meet our expectations in the future, The Company experiences a prolonged macro or market downturn, or there are other negative revisions to key assumptions, in the DCF Method, the Company may be required to perform additional impairment analyses and could be required to recognize a non-cash impairment charge.

Warranty Obligations

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Long-term contracts within the segments relate to the sale of products with attached service-type warranty contracts that generally have a stated contract term that is greater than one year.

Contracts may contain acceptance provisions where the Company is required to obtain technical acceptance from the customer upon completion of installation services and evidence of the 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 system’s functional performance within the customer’s operating environment.

The Company has concluded that acceptance criteria within its contracts can be objectively evaluated and will not impact the Company’s transfer of control assessment under ASC 606.

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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.

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.

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 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.

The project is considered substantially complete when the Company receives acceptance from the customer and remaining tasks are perfunctory or inconsequential and in control of the Company.

Generally, the terms of long-term contracts provide for progress billings based on completion of milestones or other defined phases of work.

Generally, the

terms of long-term contracts provide for progress billings based on completion of milestones or other defined phases of work.

In certain instances, payments collected from customers in advance of recognizing the related revenue are recorded and presented as contract liabilities within “Deferred revenue” on the Company’s Consolidated Balance Sheet.

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Payments related to service-type warranties may be made up front or proportionally over the contract term.

Revenue for sample management and storage are recognized over the period the services are rendered or samples are stored.

Payment due or received from the customers prior to rendering the associated services are recorded as a contract liability.

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The Company’s genomic services are professional services which includes Sanger sequencing, Next Generation sequencing, gene synthesis and gene editing-CRISPR based gene editing.

In each case, the customer realizes and consumes the benefit of these services as they are performed.

Revenue from genomic services is recognized over time and is based upon the fact that transfer of control takes place over time as determined using the input method of costs incurred.

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For awards that vest based on service conditions, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period.

For awards that vest subject to performance conditions, the Company recognizes stock-based compensation expense ratably over the performance period if it is probable that performance condition will be met and adjusted for the probability percentage of achieving the performance goals.

The Company makes estimates of stock award forfeitures and the number of awards expected to vest.

The Company considers many factors in developing forfeiture estimates, including award types, employee classes and historical experience.

For awards that vest subject to performance conditions, the Company recognizes stock-based compensation expense ratably over the performance period if it is probable that performance condition will be met and adjusted for the percentage of shares probable of achieving the performance goals.

Each quarter, the Company assesses the probability of achieving the performance goals.

Current estimates may differ from actual results and future changes in estimates.

The Company makes estimates of stock award forfeitures and the number of awards expected to vest.

The Company considers many factors in developing forfeiture estimates, including award types, employee classes and historical experience.

The following table reflects stock-based compensation expense, excluding amounts related to discontinued operations, recorded during the fiscal years ended September 30, 2022, 2021 and 2020 (in thousands):

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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.

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

Diluted weighted average shares reflect the dilutive effect, if any, of potential common shares.

To the extent their effect is dilutive, employee equity awards and other commitments to be settled in common stock are included in the calculation of diluted income per share based on the treasury stock method.

To the extent their effect is dilutive, employee equity awards and other commitments to be

settled in common stock are included in the calculation of diluted income or loss per share based on the treasury stock method.

Potential common shares are excluded from the calculation of dilutive weighted average shares outstanding if their effect would be anti-dilutive at the balance sheet date based on a treasury stock method or due to a net loss.

Recently Issued Accounting Pronouncements

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.

In November 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-10, Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance .

The amendment in this ASU requires disclosures to increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements.

This ASU is effective for annual periods beginning after December 15, 2021.

The Company will adopt the provisions of this ASU in fiscal year 2023.

The Company is evaluating the effect of adopting this new accounting guidance.

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

ASU 2021-08 requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606.

Under current GAAP, an acquirer generally recognizes such items at fair value on the acquisition date.

The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted.

The standard should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

The Company adopted the guidance during the first quarter of fiscal year 2022 .

The impact of the adoption of this ASU is immaterial to the Company’s consolidated financial statements.

In October 2020, the FASB issued “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 to 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, with early adoption 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.

This ASU did not affect the Company's consolidated financial statements or disclosures.

The Company adopted the provisions of this ASU in the first quarter of fiscal 2022 .

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

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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.

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

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 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 Company adopted the provisions of this ASU in the first quarter of fiscal 2022 .

There is 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 2018-14, 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 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 was permitted.

Early adoption is permitted.

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

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, 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.

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.

The Company adopted the provisions of this ASU in the first quarter of fiscal 2022 .

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

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.

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:

Measurement of Credit Losses on Financial Instruments .

The FASB subsequently issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , ASU 2019-05 “Financial Instruments-Credit Losses” , ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, and ASU 2020-02 , Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) to clarify and address certain items related to the amendments in ASU 2016-13.

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

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

Early adoption is permitted.

The Company adopted the provisions of this ASU in the first quarter of fiscal 2022 .

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

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.

Disposition of Semiconductor Automation Business

On September 20, 2021, the Company entered into a definitive agreement to sell its semiconductor automation business to THL.

On February 1, 2022, the Company completed the sale of the semiconductor automation business for $ 2.9 billion in cash.

Net income from discontinued operations for the fiscal year ended September 30, 2022 is inclusive of the gain on sale of $ 2.6 billion.

As part of the transaction, the Company recorded an $ 18.1 million liability related to retention bonuses and cash settled stock-based awards for former employees of the Company that were conveyed with the transaction.

The Company paid $ 0.6 million in the quarter ended September 30, 2022, and will remit the remaining payment to THL during fiscal 2023, at the end of the retention period and THL will directly pay the Company’s former employees.

Following the completion of the sale, the Company no longer serves the semiconductor market.

In connection with the closing of the sale, the Company and THL entered into a transition services agreement, to which both the Company and THL will provide each other with certain transition services related to finance and accounting, information technology, human resources, compliance, facilities, legal and research and development support, for time periods ranging from three to 24 months .

In addition, the Company entered into two separate lease agreements for leases back to the Company for portions of the facilities that have served as its corporate headquarters in Chelmsford, Massachusetts, and were sold to THL as part of the sale agreement.

Each lease provides for a term of 24 months , which may be terminated earlier by the Company upon 90 days ’ notice to THL.

The transition services agreement and lease agreements approximate fair value and there is no material impact to the Company’s results.

During the fourth quarter of fiscal 2021, the Company determined that the semiconductor automation business met the criteria to be classified as a discontinued operation and, as a result, its historical financial results are reflected in the 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):

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Operating income

Other income (loss), net

Other income, net

Gain on divestiture

Income before income taxes

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Net income from discontinued operations

On July 1, 2019, the Company sold its semiconductor cryogenics business.

During the fiscal year ended September 30, 2021, the Company recorded a $ 1.3 million negative working capital adjustment to the gain on divestiture that was previously recorded in the fourth fiscal quarter of 2019.

This adjustment is shown within other income, net within the income statement for the semiconductor automation business.

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):

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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

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Total long-term liabilities of discontinued operation

Acquisition within the Automation Business

Acquisition within the Semiconductor 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.

Precise provides the semiconductor 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.

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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.

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.

Net income from discontinued operations for fiscal year 2019 is inclusive of the net gain on sale of $ 408.6 million.

In the third quarter of fiscal year 2020, Edwards asserted claims for indemnification under the definitive agreement relating to alleged breaches of representations and warranties relating to customer warranty claims and inventory.

The Company cannot determine the probability of any losses or outcome of these claims including the amount of any indemnifiable losses, if any, resulting from these claims at this time, however, the Company believes that none of these claims will have a material adverse effect on its consolidated financial position or results of operations.

If the resolution of these claims results in indemnifiable losses in excess of the applicable indemnification deductibles and indemnification escrow established under the definitive agreement, Edwards would be required to seek recovery under the representation and warranty insurance Edwards obtained in connection with the closing of the transaction.

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’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.

The operating results of the semiconductor cryogenics business had been included in the Brooks Semiconductor Solutions Group segment before the plan of disposition.

In connection with the closing of the Disposition on July 1, 2019, the Company and Edwards entered into a transition service agreement, a supply agreement, and lease agreements.

The transition service agreement outlined the information technology, people, and facility support the parties provided to each other for the period ending 9 months after transaction closing date.

The supply agreement allowed the Company to purchase CTI and Polycold goods at cost from Edwards up to an aggregate amount equal to $ 1.0 million until one-year anniversary of closing the Disposition.

The lease agreements provide facility space in Chelmsford, Massachusetts to Edwards free of charge for three years after the transaction closing date.

Edwards has the option to renew each lease at the then current market rates after the initial three-year lease term has ended.

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 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 with respect to the semiconductor cryogenics 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 (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 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,

Statements of Operations:

Total revenue

Operating Income

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,

Depreciation and amortization

Capital expenditures

Stock-based compensation

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.

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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.

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

Acquisition Completed in Fiscal Year 2022

Barkey Holding GmbH

On July 1, 2022 , the Company acquired Barkey Holding GmbH and its subsidiaries (“Barkey”), a leading provider of controlled rate thawing devices for customers in the medical, biotech and pharmaceutical industries, head quartered in Leopoldshöhe, Germany.

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

The total cash purchase price of the acquisition was approximately $ 84.8 million, net of cash acquired.

The acquisition brings innovative products and capabilities that extend the Company’s extensive cold chain of condition portfolio of products and services, while also expanding our customer reach in the fast-growing cell and gene therapy space.

The allocation of the consideration included $ 3.0 million of customer relationships, $ 29.0 million of technology, $ 57.8 million of goodwill, $ 9.8 million of deferred tax liabilities, and several other assets and liabilities.

The weighted useful life of all the intangible assets acquired is 15 years .

The goodwill and intangibles are not tax deductible.

Acquisitions Completed in Fiscal Year 2021

Abeyatech LLC

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 purchase price includes $ 9.9 million cash payment and $ 9.4 million in contingent consideration, at present value, 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.

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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 .

During the three months ended March 31, 2022, the Company paid $ 10.0 million related to the contingent consideration recorded at the time of acquisition based on the achievement of business performance targets set forth in the purchase agreement.

Trans-Hit Biomarkers, Inc.

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

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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.

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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.

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

The total 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

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.

GENEWIZ provides genomics services that enable research scientists to advance their discoveries within the pharmaceutical, academic, biotechnology, agriculture and other markets.

It provides gene sequencing and synthesis services for more than 4,000 institutional customers worldwide supported by their global network of laboratories spanning the United States, China, Japan, Germany and the United Kingdom.

This transaction has added a new and innovative platform which further enhances the Company’s core capabilities and the opportunity to add even more value to samples that are under the Company’s care.

The total cash purchase price for the acquisition was $ 442.7 million, net of cash acquired, which included a working capital settlement of $ 0.4 million.

The Company used the proceeds of the incremental term loan described in Note 11, “Debt” to pay a portion of the purchase price.

On the acquisition date, the Company paid $ 32.3 million to escrow accounts related to the satisfaction of the seller's indemnification obligations with respect to their representations and warranties and other indemnities.

The Company also retained an amount equal to $ 1.5 million as collateral for any adjustment shortfall based on the final merger consideration calculation.

During the fiscal year 2019, the final merger consideration was calculated to be $ 4.0 million less than the merger consideration paid at closing.

To satisfy the shortfall, the Company reversed the $ 1.5 million liability associated with the holdback, received approval from the former shareholders to retain $ 0.7 million of funds the Company received on their behalf, and collected $ 1.8 million from the escrow accounts.

The Company recorded the assets acquired and liabilities assumed related to GENEWIZ 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 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 following table presents the net purchase price and the fair values of the assets and liabilities of GENEWIZ (in thousands):

Fair Value of

Accounts receivable

Prepaid expenses and other current assets

Property, plant and equipment

Intangible assets

Current portion of long-term debt

Accounts payable

Deferred revenue

Accrued compensation and benefits

Other current liabilities

Long-term debt

Long-term tax reserves

Long-term deferred tax liabilities

Other long-term 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 $ 125.5 million with a useful life of 14 years , completed technology (relief from royalty method) of $ 44.5 million with useful lives from 10 to 15 years and trademarks (relief from royalty method) of $ 19.1 million with a useful life of 13 years .

The intangible assets acquired are amortized over the total weighted average period of 13.3 years using methods that approximate the pattern in which the economic benefits are expected to be realized.

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 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.

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.

During the year ended September 30, 2021 and 2020, net income included $ 23.0 million and $ 20.3 million, respectively, related to amortization expense of acquired intangible assets.

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"

expenses within the accompanying unaudited Consolidated Statements of Operations.

The following unaudited pro forma information reflects the Company’s consolidated results of operations as if the acquisition had taken place on October 1, 2017.

The unaudited pro forma information is not necessarily indicative of the results of operations that the Company would have reported had the transaction actually occurred at the beginning of these periods nor is it necessarily indicative of future results.

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).

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.

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

The Company invests in marketable securities that are classified as available-for-sale and recorded at fair value in the Company’s Consolidated Balance Sheets.

The Company invests in marketable securities that are classified as available-for-sale and records them at fair value in the Company’s Consolidated Balance Sheets.

Marketable securities reported as current assets represent investments that mature within one year from the balance sheet date.

Long-term marketable securities represent investments with maturity dates greater than one year from the balance sheet date.

Unrealized gains and losses are excluded from earnings and reported as a separate component of accumulated other comprehensive income until the security is sold or matures.

Gains or losses realized from sales of marketable securities are computed based on the specific identification method and recognized as a component of "Other expenses, net"

Unrealized gains and losses are excluded from earnings and reported as a separate component of “Accumulated other comprehensive income” in the accompanying Consolidated Balance Sheets until the security is sold or matures.

Gains or losses realized from sales of marketable securities are computed based on the specific identification method and recognized as a component of "Other income (expenses)"

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.

As a result, during this period, the Company collected cash proceeds of $ 2.5 million from the sale of marketable securities and reclassified unrealized net holding gains of less than $ 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):

During fiscal year 2022, the Company had sales and maturities of marketable securities of $ 705.4 million.

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

The following is a summary of the amortized cost and the fair value, including accrued interest receivable, as well as unrealized gains (losses) on the short-term and long-term marketable securities as of September 30, 2022 and 2021 (in thousands):

September 30, 2022:

Treasury securities and obligations of U.S.

government agencies

Bank certificates of deposits

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Corporate securities

Municipal securities

Other debt securities

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The Company considers factors, such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer, the Company’s intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of its amortized cost basis.

If the Company believes that an other-than-temporary decline in fair value has occurred, it writes down the investment to 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.

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

Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates.

Management does not believe any unrealized losses represent impairments based on our evaluation of the available evidence.

Property, Plant and Equipment

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Property, plant and equipment, net

The property, plant and equipment and accumulated depreciation and amortization amounts in 2021 in the table above have been adjusted to remove certain fully depreciated assets.

Depreciation expense was $ 21.9 million, $ 19.5 million and $ 18.7 million, respectively, for the fiscal years ended September 30, 2022, 2021, and 2020.

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Finance leases

Supplemental cash flow information related to leases was as follows (in thousands, unaudited):

Supplemental cash flow information related to leases was as follows (in thousands):

Year Ended September 30,

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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):

Future lease payments for operating leases as of September 30, 2022 were as follows for the subsequent five fiscal years and thereafter (in thousands):

Operating Leases

Finance Leases

Fiscal year ended September 30,

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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, 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.

The Company has two operating, two reportable segments, and two reporting units consisting of Life Sciences Products and Life Sciences Services.

The Company previously had three reporting units, which included the Life Sciences Products operating segment, which constitutes of a single reporting unit, and two reporting units within the Life Sciences Services operating segment, sample repository solutions and genomic services, which were combined into a single reporting unit within the Life Sciences Services segment following the 2021 impairment test.

The Company completed its annual goodwill impairment test as of April 1, 2022 for its two reporting units.

The two reporting units include Life Sciences Products as the only reporting unit within the Life Sciences Products segment, and

Life Sciences Services as the only reporting unit within the Life Sciences Services segment.

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

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

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):

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

In the fourth quarter of 2022, the Company experienced a decline in our stock price resulting in its market capitalization being less than its carrying value.

Therefore, as of September 30, 2022, the Company assessed several events and circumstances that could affect the significant inputs used to determine the fair value of its reporting units, including updates to operating margins and cash flows, and the overall change in the economic climate.

The Company’s valuation was based on the DCF Method.

The Company concluded that there was no impairment , as the estimated fair value of the reporting units exceeded their carrying value.

The following table sets forth the changes in the carrying amount of goodwill by reporting unit since September 30, 2020 (in thousands):

Life Sciences

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Balance, at September 30, 2020

Acquisitions and adjustments

Acquisitions and currency translation adjustments

Balance, at September 30, 2021

Acquisitions and adjustments

Acquisitions and currency translation adjustments

Balance, at September 30, 2022

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.

During fiscal year 2022, the Company recorded a goodwill increase of $ 44.3 million primarily related to the acquisitions of Barkey of $ 57.8 million in the fourth quarter of fiscal year 2022 net with the impact of foreign currency translation adjustments of $ 13.5 million.

The components of the Company’s identifiable intangible assets as of September 30, 2022 and 2021 are as follows (in thousands):

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Amortization expense for intangible assets was $ 32.3 million, $ 37.4 million and $ 35.4 million, respectively, for the fiscal years ended September 30, 2022, 2021 and 2020.

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, 2022 is as follows (in thousands):

Fiscal year ended September 30,

Supplementary Balance Sheet Information

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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 for the fiscal years ended September 30, 2022, 2021 and 2020 (in thousands):

6 unchanged sentences

Balance at September 30, 2021

Adjustments for acquisitions

Accruals for warranties during the year

1 unchanged sentence

Balance at September 30, 2022

Line of Credit

The Company maintains a revolving line of credit under a credit agreement with Wells Fargo Bank, N.A.

and JPMorgan Chase Bank, N.A.

that provides for a revolving credit facility of up to $ 75.0 million, subject to borrowing base availability, as defined in the credit agreement.

The line of credit matures on October 4, 2022 and expires no less than 90 days prior to the term loan expiration discussed below.

The proceeds from the line of credit are available for permitted acquisitions and general corporate purposes.

On October 4, 2017, the Company entered into a $ 200.0 million Senior Secured Term Loan Facility (the “term loan”) with Morgan Stanley Senior Funding, Inc., JPMorgan Chase Bank, N.A.

and Wells Fargo Securities, LLC (collectively, the “lenders”).

Coincident with the entry into the credit agreement for the term loan discussed in Note 11, “Debt” below, the Company amended certain terms and conditions of the credit agreement.

Based on the amended terms of the credit agreement, the line of credit continues to provide for a revolving credit facility of up to $ 75.0 million, subject to borrowing base availability.

Borrowing base availability under the amended credit agreement excludes collateral related to fixed assets and is redetermined periodically based on certain percentage of certain eligible U.S.

assets, including accounts receivable and inventory.

The sub-limits for letters of credit were reduced to $ 7.5 million under the amended terms of the credit agreement.

All outstanding borrowings under the credit agreement are guaranteed by the Company and Brooks Life Sciences, Inc.

(fka BioStorage Technologies, Inc.), the Company’s wholly-owned subsidiary (“guarantor”), and subordinated to the obligations under the term loan which are secured by a first priority lien on substantially all of the assets of the Company and the guarantor, other than accounts receivable and inventory.

Please refer to Note 11, “Debt”, for further information on the term loan transaction.

There were no amounts outstanding under the line of credit as of September 30, 2021 and September 30, 2020.

The Company records commitment fees and other costs directly associated with obtaining the line of credit facility as deferred financing costs, which are amortized over the term of the related financing arrangement.

Deferred financing costs were $ 0.1 million and $ 0.2 million, respectively, at September 30, 2021 and September 30, 2020.

The line of credit contains certain customary representations and warranties, a financial covenant and affirmative and negative covenants as well as events of default.

The Company was in compliance with the line of credit covenants as of September 30, 2021 and September 30, 2020.

Debt and Line of Credit

On October 4, 2017, the Company entered into a $ 200.0 million term loan with the lenders pursuant to the terms of a credit agreement.

The term loan was issued at $ 197.6 million, or 98.8 % of its par value, resulting in a discount of $ 2.4 million, or 1.2 %, which represented loan origination fees paid at the closing.

On November 15, 2018, the Company entered into an incremental amendment (the “First Amendment”) to the existing credit agreement.

Under the First Amendment, the Company obtained an incremental term loan in an aggregate principal amount of $ 350.0 million.

The proceeds of the incremental term loan were used to finance a portion of the purchase price for the Company’s acquisition of GENEWIZ.

The incremental term loan was issued at $ 340.5 million, or 97.3 % of its par value, resulting in a discount of $ 9.5 million, or 2.7 %, which represented financing cost of the incremental term loan.

Except as provided in the First Amendment, the incremental term loan was subject to the same terms and conditions as set forth in the existing credit agreement.

On February 15, 2019, the Company entered into the second amendment to the credit agreement (the “Second Amendment”) and syndicated the incremental term loan to a group of new lenders which met the criteria of a debt extinguishment.

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 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.

On July 1, 2019, the Company completed the sale of its semiconductor cryogenics business and used $ 348.3 million of the proceeds from the Disposition to extinguish the outstanding balance of the incremental term loan.

In addition, the Company used $ 147.0 million of the proceeds from the Disposition to extinguish a portion of the outstanding balance of the term loan.

The Company recorded a loss on debt extinguishment of $ 5.2 million for the two term loans.

The Company’s obligations under the term loan are also guaranteed by Brooks Life Sciences, Inc.

(fka BioStorage Technologies, Inc.) as the guarantor, subject to the terms and conditions of the credit agreement.

The Company and the guarantor granted the lenders a perfected first priority security interest in substantially all of the assets of the Company and the guarantor to secure the repayment of the term loan.

The loan principal amount under the credit agreement may be increased by an aggregate amount equal to $ 75.0 million plus any voluntary repayments of the term loans plus any additional amount such that the secured leverage ratio of the Company is less than 3.00 to 1.00.

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 Consolidated Statements of Operations.

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

The credit agreement contains certain customary representations and warranties, covenants and events of default.

If any of the events of default occur and are not waived or cured within applicable grace periods, any unpaid amounts under the credit agreement will bear an annual interest rate at 2.00 % above the rate otherwise applicable under the terms and conditions of such agreement.

The credit agreement does not contain financial maintenance covenants.

As of September 30, 2021, the Company was in compliance with all covenants and conditions under the credit agreement.

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 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 were equal to the LIBOR plus 3.1 %.

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

Both of the one-year term loans were initiated in 2018 and matured in 2019.

The interest rates of these two loans were 4.56 % and 4.35 %.

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

Fiscal year ended September 30,

Total outstanding principal balance

Unamortized deferred financing costs

Current portion of long-term debt

Non-current portion of long-term debt

During the fiscal year ended September 30, 2022 and 2021, the weighted average stated interest rate paid on all outstanding debt was 2.7 % and 2.8 %, respectively.

During the year ended September 30, 2022 and 2021, the Company incurred aggregate interest expense of $ 0.5 million and $ 1.7 million, respectively, in connection with the borrowings.

On February 1, 2022, the Company completed the sale of its semiconductor automation business and used $ 49.7 million of the proceeds from the sale to extinguish the outstanding balance of the term loan.

The Company also terminated its revolving line of credit which had no borrowings outstanding.

The Company recorded a loss on debt and line of credit extinguishment of $ 0.6 million.

The deferred financing costs were 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.

The Company’s deferred financing costs as of September 30, 2022 were zero , due to the extinguishment of debt during the fiscal year.

A s of September 30, 2021, deferred financing costs were $ 0.3 million.

The components of the income tax provision (benefit) from continuing operations for the fiscal years are as follows (in thousands):

3 unchanged sentences

Deferred income tax provision (benefit):

Total deferred income tax benefit

Income tax benefit

Total deferred income tax provision (benefit)

Income tax provision (benefit)

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

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Impact of tax rate changes

Transition tax and other true-ups

Other non-deductible expenses

Other true-ups

Research and development expense deduction

Income tax provision (benefit)

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.

1 unchanged sentence

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

Unremitted foreign earnings total approximately $ 229 million.

Unremitted foreign earnings total approximately $ 1.3 billion.

The Company did not calculate estimated deferred tax liabilities related to these earnings because such calculations would not be practicable due to the complexity of its hypothetical calculation.

The taxes on these earnings would primarily consist of foreign withholding taxes and minimal U.S.

The taxes on these earnings would primarily consist of foreign withholding taxes, taxes on foreign exchange gains and losses resulting from potential future distributions, and minimal U.S.

state income taxes.

Substantially all of the unremitted earnings of the Company have been taxed in the U.S.

based on the international tax regulations.

The significant components of the net deferred tax assets and liabilities as of September 30, 2022 and 2021 are as follows (in thousands):

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Lease liabilities

Mergers and acquisitions

Deferred revenue

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Other liabilities

Net unrealized loss

Deferred tax liabilities

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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, 2022 and 2021 also include $ 1.1 million and $ 2.3 million deferred tax charge related to the company’s intercompany profit elimination, respectively.

4 unchanged sentences

The Company evaluates the realizability of its deferred tax assets by tax-paying component and assesses the need for a valuation allowance on an annual and quarterly basis.

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

After evaluating all the relevant positive and negative evidence, the Company is not recording any additional valuation allowance against deferred tax assets in the United States.

The Company is in a net deferred tax liability position and has sufficient future taxable income from the reversal of taxable temporary difference to offset the deductible temporary differences.

The Company continued to hold a United States 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 2022.

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.

As of September 30, 2022, the Company has tax-effected federal, state and foreign net operating loss carry-forwards of approximately $ 0.4 million, $ 2.1 million and $ 4.9 million, respectively.

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 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.

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.

The Company recorded a tax impact of $ 8.0 million, net of foreign tax credits, related to the toll charge during the fiscal year ended September 30, 2018.

The Company completed final calculations in accordance with Staff Accounting Bulletin No.118 during the first quarter of fiscal year 2019 and recorded a reduction in the toll charge of $ 1.1 million.

During the third quarter of fiscal year 2019, the U.S.

government issued final regulations that clarified certain rules related to the toll charge that impacted fiscal year taxpayers.

As a result of this clarification, the Company recorded an increase to the toll charge of $ 4.1 million.

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

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.

The state of net operating loss carry-forwards will begin to expire in 2026.

The majority of the foreign net operating loss carryovers have an indefinite carry-forward in Germany.

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

As a result of these studies, the Company has determined that ownership changes have occurred primarily in connection with acquisitions when the Company has issued stock to the sellers, as well as ownership changes in the subsidiaries acquired by the Company.

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.

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.

Limitations on current year use of net operating loss carryovers have also been recorded in the tax provision.

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Additions for tax positions in current year

Additions for tax positions in prior year

Reductions from lapses in statutes of limitations

Balance at September 30, 2020

Additions for tax positions in current year

Reductions from lapses in statutes of limitations

3 unchanged sentences

All of the unrecognized tax benefits for the fiscal year ended September 30, 2022 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 $ 0.0 million, $ 1.1 million and $ 1.1 million, respectively, was recognized for the fiscal years ended September 30, 2022, 2021 and 2020.

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In the normal course of business, the Company is subject to income tax audits in various global jurisdictions in which it operates.

The years subject to examination vary for the U.S.

and international jurisdictions, with the earliest tax year being 2013.

The years subject to examination vary for the United States and international jurisdictions, with the earliest tax year being 2017 .

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.

1 unchanged sentence

Derivative Instruments

The Company has transactions and balances denominated in currencies other than the U.S.

Most of these transactions or balances are denominated in Euros, British Pounds and a variety of Asian currencies.

The Company has transactions and balances denominated in currencies other than the functional currency of the transacting entity.

Most of these transactions carrying foreign exchange risk are in Germany, the United Kingdom and China.

These transactions and balances, including short-term advances between the Company and its subsidiaries, subject the Company’s operations to exposure from exchange rate fluctuations.

7 unchanged sentences

Fiscal Year Ended September 30,

Realized (losses) gains on derivatives not designated as hedging instruments

Realized gains (losses) on derivatives not designated as hedging instruments

The fair value of derivative instruments are as follows at September 30, 2022 and 2021 (in thousands):

6 unchanged sentences

and "Accrued expenses and other current liabilities".

Hedging Activities

On February 1, 2022, the Company entered into a cross-currency swap agreement to hedge the variability of exchange rate impacts between the United States dollar and the Euro.

The designated notional amount is $ 960 million and the actual interest rate is 1.283 %.

1.283 % was in the range of the market value for that day and is the true interest rate on the notional amount.

This cross-currency swap agreement expires in February 2023.

The Company has designated the cross-currency swap as a hedge of net investments against one of our Euro denominated subsidiaries which requires an exchange of the notional amounts at maturity.

At the maturity of the cross currency-swap, the Company will deliver a notional amount of € 852 million and receive a notional amount of $ 960 million at an exchange rate of 1.1261 .

This cross-currency swap is marked to market at each reporting period, representing the fair values of the cross-currency swap and any changes in fair value are recognized as a component of Accumulated other comprehensive items, net, on the Consolidated Statements of Comprehensive Income.

Interest accrued on the cross-currency swap is recorded within interest income on the Consolidated Statements of Operations.

For fiscal year ended September 30, 2022, the Company recorded a gain, net of tax of $ 93.0 million, to Accumulated other comprehensive income and recorded interest income of $ 8.2 million on this instrument.

Stockholders’ Equity

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on Available-

Derivative asset

Balance at September 30, 2019

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Among the total restricted stock units granted, 0 , 98,783 , and 119,978 shares, respectively, were granted to the employees who belong to the discontinued operations in the year ended September 30, 2022, 2021 and 2020.

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.

Subsequent to September 30, 2022, the Company cash settled stock-based awards for former employees that were conveyed with the sale of the semiconductor automation business.

Time-Based Restricted Stock Unit Grants

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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.

As of September 30, 2022, 670,136 shares of common stock remain available for purchase under the

During the fiscal year ended September 30, 2022 and 2021, the Company issued 82,035 shares and 106,516 shares, respectively, under the 2017 Plan.

Earnings per Share

The calculations of basic and diluted net income (loss) per share and basic and diluted weighted average shares outstanding are as follows for the fiscal years ended September 30, 2021, 2020 and 2019 (in thousands, except per share data):

The calculations of basic and diluted net income per share and basic and diluted weighted average shares outstanding are as follows for the fiscal years ended September 30, 2022, 2021 and 2020 (in thousands, except per share data):

Year Ended September 30,

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Diluted net income per share

Dividend declared per share

Restricted stock units of 64,122 , 24,012 and 16,695 , respectively, during fiscal year 2022, 2021 and 2020 were excluded from the computation of diluted earnings per share as their effect would be anti-dilutive based on the treasury stock method.

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Significant Business Line

Brooks Life Sciences Products

Life Sciences Products

Sample Repository Solutions

Genomic Services

The Genomics Services and SRS values for 2021 have been adjusted for certain laboratory services that were classified from SRS into Genomics 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.

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

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

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

Accounts receivable, net were $ 163.8 million and $ 119.9 million at September 30, 2022 and September 30, 2021, respectively.

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Contract assets represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is conditional on something other than the passage of time.

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

These amounts typically relate to contracts where the right to invoice the customer is not present until completion of the contract or the achievement of specified milestones and the value of the products or services transferred exceed this constraint.

Contract assets are classified as current as they convert to cash within one year.

Contract asset balances which are included within “Prepaid expenses and other current assets” on the Company’s Consolidated Balance Sheet, were $ 18.2 million and $ 15.3 million at September 30, 2022 and September 30, 2021, respectively.

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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.

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” 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.

The Company will account for shipping and handling activities as fulfillment activities and recognize the associated expense when transfer of control of the product has transferred to the customer.

As part of the Company’s cumulative effect adjustment upon the initial adoption of ASC 606, 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 and are being amortized over a 60 -month period, which represents the average period of contract performance.

The Company capitalized $ 0.7 million of sales commissions during the fiscal year ended September 30, 2022.

All other sales commissions incurred during the reporting period have been expensed as incurred.

These costs are recorded within “Selling, general, and administrative” expenses on the Company’s Consolidated Statement of Operations.

The Company accounts for shipping and handling activities as fulfillment activities and recognize the associated expense when control of the product has transferred to the customer.

Significant Customers

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.

The Company had no individual customer that accounted for more than 10% of its consolidated revenue for each of the fiscal years ended September 30, 2022, 2021 and 2020.

There was no customer that accounted for more than 10% of the Company’s accounts receivable balance for each of the fiscal years ended September 30, 2022, 2021 and 2020.

Segment and Geographic Information

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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.

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

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

The sale of the semiconductor automation business, which comprised the Semiconductor Solutions Group segment, was completed on February 1, 2022.

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

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.

Within our Life Sciences Products segment, we have developed and continue to develop automated biological sample storage solutions for operating in low temperature environments.

We have a complete line up of automated stores from ambient temperatures to -190°C.

Our BioStore’s ™ unique design allows controlled temperature storage down to -80°C with the industry’s highest throughput of sample retrieval.

Within our Life Sciences Services segment, our genomics services business advances research and development activities by gene sequencing, synthesis, editing and related services.

We offer a comprehensive, global portfolio that we believe has both broad appeal in the life sciences industry and enables customers to select the best solution for their research challenges.

This portfolio also offers unique solutions for key markets such as cell and gene therapy, antibody development, and biomarker discovery by addressing genomic complexity and throughput challenges.

Our sample repository solutions business is a global leader in sample storage and management, and provides a full suite of reliable cold and ultra-cold chain solutions.

The Company considers adjusted operating income, which excludes charges related to amortization of completed technology, restructuring related charges and other special charges, such as impairment losses, as the primary performance metric when evaluating the business.

The following is the summary of the financial information for the Company’s reportable segments for the fiscal years ended September 30, 2022, 2021 and 2020 (in thousands):

Year Ended September 30,

Brooks Life Sciences Products

Brooks Life Sciences Services

Life Sciences Products

Life Sciences Services

Total revenue

Operating income:

Brooks Life Sciences Products

Brooks Life Sciences Services

Life Sciences Products

Life Sciences Services

Reportable segment adjusted operating income

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Loss on extinguishment of debt

Other expenses, net

Other expenses

Loss before income taxes

Sciences Products

Sciences Services

Life Sciences Products

Life Sciences Services

September 30, 2022

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Geographic Location:

Asia / Pacific/ Other

North America

Asia Pacific/ Other

The majority of the Company’s net revenue in North America is generated in the United States which amounted to $ 370.6 million, $ 320.8 million and $ 253.5 million, respectively, during fiscal years ended September 30, 2022, 2021 and 2020.

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Foreign exchange contracts

Net investment hedge

Foreign exchange contracts

Acquisition-related contingent consideration

Total liabilities

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Foreign exchange contracts

Acquisition-related contingent consideration

Total liabilities

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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.

We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents.

The fair values of these investments approximate their carrying values.

Available-For-Sale 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.

Available-for-sale securities primarily consist of municipal securities, bank certificate of deposits and U.S.

government backed securities, and as such are classified as Level 1.

Investments classified as Level 2 consist of debt securities that are valued using matrix pricing and benchmarking because they are not actively traded.

Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices.

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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.

Net Investment Hedge

Net investment hedge assets 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.

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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

At September 30, 2021, the Company had $ 1.3 million of letters of credit outstanding related primarily to customer advances and other performance obligations.

These arrangements guarantee the refund of advance payments received from the Company’s customers in the event that the product is not delivered or warranty obligations are not fulfilled in accordance with the contract terms.

These obligations could be called by the beneficiaries at any time before the expiration date of the particular letter of credit if the Company fails to meet certain contractual requirements.

None of these obligations were called during fiscal years ended September 30, 2021, and the Company currently does not anticipate any of these obligations to be called in the near future.

Tariff Matter

In fiscal year 2021, as part of the Company’s continued integration of GENEWIZ, which was acquired in November 2018, the Company initiated a review during first quarter of fiscal year 2021, 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 as a result and recorded a liability of $ 6.1 million in the second quarter of fiscal 2021.

During the three months ended June 30, 2022 the Company submitted a payment in the amount of $ 5.9 million to the customs authorities related to November 2021 and prior periods.

The customs authorities will review the Company’s calculation of tariffs for these periods and determine if any further tariffs are owed.

As of September 30, 2022, the accrual for these tariffs was $ 2.8 million, related to normal business activity.

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

Purchase Commitments

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.

At September 30, 2022, the Company has non-cancelable commitments of $ 66.6 million, including purchase orders for inventory of $ 55.6 million, and information technology related commitments of $ 10.9 million.

Contingencies

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The Company cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses.

The Company may also have certain indemnification obligations pursuant to claims made under the definitive agreement it entered into with Edwards in connection with the Company’s sale of its semiconductor cryogenics business.

See Note 3, “Discontinued Operations” for further information.

The Company may also have certain indemnification obligations pursuant to claims made under the definitive agreement it entered into with Edwards Vacuum LLC (a member of the Atlas Copco Group) in connection with the Company’s sale of its semiconductor cryogenics business in the fourth quarter of fiscal year 2018.

However, as of the date of this report, the Company believes that none of these claims will have a material adverse effect on its consolidated financial position or results of operations.

If the resolution of these claims results in indemnifiable losses in excess of the applicable indemnification deductibles and indemnification escrow established

under the definitive agreement, Edwards would be required to seek recovery under the representation and warranty insurance Edwards obtained in connection with the closing of the transaction.

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.

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

On November 2, 2021 , the Company’s Board of Directors declared a cash dividend of $ 0.10 per share payable on December 23, 2021 to common stockholders of record as of December 3, 2021 .

Dividends are declared at the discretion of the Company’s Board of Directors and depend on the Company’s actual cash flow from operations, its financial condition and capital requirements, as well as any other factors the Company’s Board of Directors may consider relevant.

Future dividend declarations, as well as the record and payment dates for such dividends, will be determined by the Company’s Board of Directors on a quarterly basis.

Acquisition completed after fiscal year end

On October 3, 2022 , subsequent to our fiscal 2022 year end, the Company acquired B Medical Systems S.á r.l.

and its subsidiaries ("B Medical"), a market leader in temperature-controlled storage and transportation solutions that enables the delivery of life-saving treatments to more than 150 countries worldwide.

This acquisition complements the Company’s cold chain capabilities, adding differentiated solutions for reliable and traceable transport of temperature-sensitive specimens.

The Company paid a total initial cash purchase price at closing of $ 422 million, as adjusted for cash acquired and other items pursuant to the Agreement.

The Seller is eligible to earn up to approximately $ 50 million in contingent consideration based upon achievement of certain financial metrics by B Medical and its subsidiaries.

In addition, the company paid down B Medical’s outstanding debt of $ 43.1 million prior to September 30, 2022, classified in prepaid assets, and recorded short term restricted cash of $ 381 million to complete the purchase on October 3, 2022.

The Company is in the process of performing an allocation of the purchase price to individual assets and liabilities.

Share Repurchase Program

On September 29, 2015, our Board of Directors approved a share repurchase program for up to $ 50 million of our common stock, or the 2015 Repurchase Program.

On November 4, 2022, our Board of Directors terminated the 2015 Repurchase Program and approved a new share repurchase program authorizing the repurchase of up to $ 1.5 billion of our common stock, or the 2022 Repurchase Program.

Repurchases under the 2022 Repurchase Program may be made in the open market or through privately negotiated transactions (including under an accelerated share repurchase, or ASR, agreement), or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, subject to market and business conditions, legal requirements, and other factors.

We are not obligated to acquire any particular amount of common stock under the 2022 Repurchase Program, and share repurchases may be commenced or suspended at any time at our discretion.

As part of the 2022 Repurchase Program, we expect to enter into an ASR agreement for the repurchase of up to $ 500 million of our common stock.

There were no repurchases of our common stock during the fiscal year ended September 30, 2022, and through the date of the filing.

Changes in and Disagreements with Accountants on Financial Accounting and Financial Disclosure

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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