Azenta, Inc. · NASDAQ:AZTA
Azenta — Brooks Automation — Investor Presentation (May 2014)
39 slides from Azenta's investor presentation, May 20, 2014
Slide 1: May 21, 2014
May 21, 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement = Brooks “Safe Harbor” Statement under the U.S. Private Securities Litigation Reform Act of 1995; certain matters in this presentation, including forecasts of future demand and future Company performance, are forward-looking statements that are subject to risks and uncertaintie
Slide 3: Brooks Automation Today
BROOKS AUTOMATION TODAY Driving Performance. Positioned for Profitable Growth. = Brooks Market position: Market position: Focus: Outlook: Automation and Cryogenics for semiconductor manufacturing Life Sciences Next division 3-5 years Last three years Improved / more Profitable # 1 # 1 consistent gro
Slide 4: Brooks Automation: Driving Performance. Positioned for Profitable Growth.
BROOKS AUTOMATION Driving Performance. Positioned for Profitable Growth. = Brooks * Driving performance + Building on two strong platforms + Delivering profitable growth
Slide 5: Brooks Automation — At a Glance
Brooks Automation — At a Glance = Brooks + Market leader in two ieoneioay segments — capital equip! — life science Dest sample storage + Based in Chelmsford, MA — operations in 11 countries spanning N. America, Europe and Asia — 1,600 employees — sales in 60 countries + Market cap: ~$650M + FY 2013
Slide 6: What We Do: Enable Improved Results in Controlled Operating Environments
WHAT WE Enable Improved Results in Controlled Operating Environments = Brooks Technologies Markets . Semiconductor Contaminant- Capital Equipment free precision automation . io handlin ospheric & vacuum robots - inteotated automation systems Clean wafer environments Precise, + Vacuum creation = cryo
Slide 7: Strategic Focus to Improve Performance
Strategic Focus to Improve Performance — Last Three Years = Brooks + Extend market leadership Strengthen core PuExoand F semiconductor sided Miektn business + Reduce costs, working Our goal: capital Improved performance 2 | and extend Apply core + Selective acquisitions leadership in technologies to
Slide 8: Execution: A Company on the Move to Higher Value and Higher Growth
EXECUTION A Company on the Move to Higher Value and Higher Growth = Brooks 2011 2014 + Acquired RTS * Acquired 22% of for $3M (Life Sciences) BioCision for $4M P Life Sciences} Acquired Nexus \ ) In Semi for $85M (Life aoe + Acquired DMS for $31M i Market and + Establish (Semi) fed $0.08 per Life pe
Slide 9: Recent Performance: Investing for Growth
RECENT PERFORMANCE Investing for Growth R&D Investment to Capture Share $49M Sustaining / New Technologies +75% $29M New Solutions FY2010 FY2013 R&D = Brooks Segmented Life Sciences Semi Next Gen Life Science
Slide 10: Brooks Automation: Driving Performance. Positioned for Profitable Growth.
BROOKS AUTOMATION Driving Performance. Positioned for Profitable Growth. = Brooks * Driving performance + Building on two strong platforms | + Delivering profitable growth
Slide 11: Building on Two Strong Platforms
Building on Two Strong Platforms = Brooks = Brooks Semiconductor Capital Equipment * $1.5B market for automation and cryogenics + FY 2013 Revenue: $408M + Adjusted gross margin: 34% Core Ci Robotic automatio Life Science Biological Sample Storage
Slide 12: Market Positioning: Leader in Specialized Markets for Semiconductor Capital Equipment
MARKET POSITIONING Leader in Specialized Markets for Semiconductor Capital Equipment = Brooks 30% share of $1.5B market Front End Tool Automation ‘=i | Wafer Level Factory Automation Vacuum System Automation Cryogenic Pumps FOUP Cleaners FOUP = Front Opening Unified Pod Water Carrier
Slide 13: Brooks Expands Offerings with FOUP Cleaners
MARKET POSITIONING Brooks Expands Offerings with FOUP Cleaners = Brooks * Contamination management is a critical element of yield enhancement 2 1x nm node 2 2x nm node 2 3x nm node Wafer Control Inert gas FOUP. Vacuum transfer cleans delay time purge cleans between processes T q T Existing product A
Slide 14: Strong Customer Relationships
MARKET POSITIONING . . Strong Customer Relationships = Brooks More than 200 OEM Customers GUARRUER. Hiiroxvoetecmon Veeco TES A ° SiGmare) EUGENE TecHNoLocy ASM ee SPTS Beene Ultratech Cai non ASML & NOVA aIXTRON SK nic smc 4 @ scosatrounories Gafineon a unc d4@icron TOSHIBA
Slide 15: Building on Two Strong Platforms
Building on Two Strong Platforms = Brooks Life Science Biological Sample Storage a + $500M market growing to $1B by 2018 + FY 2013 Revenue: $43M + Adjusted gross margin: 42% Core Competencies + Robotic automation * Cryogenics
Slide 16: Life Sciences - A Natural Fit for Brooks
Life Sciences - A Natural Fit for Brooks = Brooks Leverages core expertise and proprietary technology My Technology synergy i Large market of $500M growing to $1B by 2018 im Growth market ~20% annually if Fragmented industry, lacking leadership 4 Science requires higher reliability and quality of sa
Slide 17: The Need for Automated Bio Sample Storage
MARKET OPPORTUNITY The Need for Automated Bio Sample Storage = Brooks Manual Storage Automated Sample Storage 20'" Century Technology 215 Century Technology + Stored in freezers and + Demand increasing handled manually exponentially 4 - personalized medicine + Sample degradation a z " a + >1B sample
Slide 18: Targeting a Large Growing Market
MARKET OPPORTUNITY Targeting a Large Growing Market Cold Sample Storage Systems — Addressable Market ~$1B Automated ~20% ~$500M 2013 2018E = Brooks
Slide 19: Established Relationships in a Growth Space
MARKET POSITIONING Established Relationships in a Growth Space = Brooks More than 100 Customers Top 20 Pharmas and Biotechs use the Compound Store = nein ' lh iagslcintl > MERCK Genentech "MERCK astrazenech? UD Novartis ¢ Bayer BASF @ te. ane Somes CBSE yn, GED Bio Sample Stores are in the Leading R
Slide 20: Successful Launch of First Brooks-Developed Product
RECENT PERFORMANC Successful Launch of First Brooks-Developed Product = Brooks Best Expertise from Acquisitions New Product Family: * 3 acquisitions since 2011 Twinbank + 100 customers including aaa Top 20 pharma companies - ie Unique Brooks Expertise v Market leading reliability vy Modular v Next g
Slide 21: Brooks Automation: Driving Performance. Positioned for Profitable Growth.
BROOKS AUTOMATION Driving Performance. Positioned for Profitable Growth. = Brooks * Driving performance + Building on two strong platforms + Delivering profitable growth |
Slide 22: Key Performance Drivers Going Forward
Key Performance Drivers Going Forward = Brooks Extend leadership in core Semiconductor and Adjacent markets =s Rapid growth of Life Sciences division Drive margin expansion Disciplined capital deployment A WN
Slide 23: Extend Leadership in Core Semiconductor and Adjacent Markets
1. Extend Leadership in Core Semiconductor and Adjacent Markets Sources of Growth in the Next 5 Years EUV lithography
Slide 24: Rapid Growth of Life Sciences Division
2. Rapid Growth of Life Sciences Division = Brooks Organic Revenues Key Drivers $43M FY2013 $80M FY 2015 Breakeven Target $120M R Market demand growth R New Twinbank product platform — shipped 2014 Q Developing new ultra-low temperature system — beta in 2015 FY 2017 Goal
Slide 25: Rapid Growth of Life Science Division
2. Rapid Growth of Life Science Division = Brooks Market S We are ing — Near Term Large 2018 of target segments: 1M tubes Sample Capacity 250k tubes New product : in |. First mover development advantage: solution for growing Small opportunity: -20°C -80°C -150°C + small ultra-low Temperature tempera
Slide 26: Drive Margin Expansion and Build a Business Model with Resilience
3. Drive Margin Expansion and Build a Business Model with Resilience and Growth Capability = Brooks an LTM ending $ millions March 31, 2014 2017 Target Model Expanded market Improved base performance an yield Addressable market $2.4B a $3.1B Total revenue $494M a $570-$660M Life Sciences revenue % 9
Slide 27: Disciplined Capital Deployment
4. Disciplined Capital Deployment = Brooks Disciplined capital deployment Organic Growth Acquisitions Shareholder Value * Invest in R&D, + Semiconductor and + Currently $0.32 ~$50M annually Life Sciences dividend annually + ROIC
Slide 28: Key 2014 Milestones
Key 2014 Milestones = Brooks * Continued improvement in margin + Life Sciences Revenue — Steady growth at +25% YtY + Life Science Backlog — High growth at +40% YtY * Tier 1 OEM/ End User / Other OEM Design Wins: 12 Hooo,m + Break-even Life Sciences business in Q@4+-46- Q3 ‘14 tees Ma
Slide 29: Operating Performance and Guidance
Operating Performance and Guidance = Brooks Results Results Guidance $ Millions FY13 Q2 FY14 Q3 FY14 Brooks Revenue $422 $126 $115-119 Gross Margin % 33.5% 36.0% 36% Adjusted EBITDA $29 $13 $7-9 Operating Cash Flow $54 $27 Non-GAAP Diluted EPS Continuing Operations $0.11 $0.06 $0.04- - 07 DMS (April
Slide 30: Why Invest in Brooks Automation
WHY INVEST IN BROOKS AUTOMATION Driving Improved Performance. Positioned for Profitable Growth. Strengthened Business Leveraging Ti wo Platforms = Brooks Positioned for Long Term Profitable Growth v Expanded margins Y Built new division v Both market leaders v Allthe resources to grow v Launching mu
Slide 31: Vel al = |
Vel al = | J May 2014 » S
Slide 32: Result of Our Strategy: Where We Are Today
RESULT OF OUR STRATEGY: Where We Are Today = Brooks ™ Concentrating on core, strategic capabilities — divested non-core busi - contract ing and i — invested $200M in acquisitions, primarily funded from divestments ™ Improved cost and gross margin — up ~400 bps in past year ™ Investing in strategic i
Slide 33: Why We are Confident about the Future of our Life Science Business
PERFORMANCE Why We are Confident about the Future of our Life Science Business = Brooks ™ Market growing at 20%+ annually & Brooks > market leader, invests most in R&D ™ Launching next generation product family ™ Continuous backlog expansion
Slide 34: Extending Leadership in Core Semiconductor and Adjacent Markets
Extending Leadership in Core Semiconductor and Adjacent Markets Divestment: Granville-Phillips Acquisition: DMS Automated Instruments FOUP Cleaners + $28M revenue in 2013 + $28M revenue in 2013 * Steady revenue * Growth to $40M in 2015 + #3 in the market + #1 in market + EPS: ~ $0.08 per year + EPS:
Slide 35: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Revenue AV) 4 Brooks FY13 Brooks rooks: Brooks Brooks Life Automation, Product Global Science Dollars in millions Inc. Solutions Services Systems GAAP revenue $ 422.4 §$ 2905 $ 886 6 $ 43.3 Non-GAAP adjustments: Revenue from discontinued operations 28.5 27.4 1 Non-GAA
Slide 36: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Consolidated Gross Profit and Gross Profit Margin Brooks wv FY13 Q2 FY14 Dollars in millions % $ %o GAAP gross profit $ 132.3 31.3% $ 44.3 35.2% Non-GAAP adjustments: Amortization of intangible assets 441 1.0% 09 0.7% Impairment of intangible assets 1.9 0.5% - 0.0% Pu
Slide 37: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Consolidated Operating Profit and Operating Margin —— FY13 Q2FY14 Dollars in millions GAAP operating profit $ (17.2) (41%) $ 24 1.9% Non-GAAP adjustments: Amortization of intangible assets 98 2.3% 24 1.9% 19 0.0% - 0.0% Impairment of intangible assets Non-GAAP operati
Slide 38: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Net Income and Earnings per Share 13 per diluted per diluted Dollars in millions, except eamings per share $ share share Net income attributable to Brooks $ (2.2) $ (0.03) $32 $ 0.05 Non-GAAP adjustments, net of tax: Amortization of intangible assets 7.0 0.11 1.6 0.02
Slide 39: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation EBITDA and Adjusted EBITDA = Brooks Dollars in millions FY13 Q2 FY14 Net income attributable to Brooks $ (2.2) $ 3.2 Non-GAAP adjustments: Interest income (1.0) (0.3) Interest expense 0.0 A Income tax provision (2.2) 1.8 Depreciation 14.0 34 Amortization of intangible