BROOKS AUTOMATION, INC. Management’s Discussion and Analysis of Financial Position and Operating Results (Form 10-K)

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The Management's Discussion and Analysis of Financial Condition and Results of
Operations, or MD&A, describes principal factors affecting the results of our
operations, financial condition and liquidity, as well as our critical
accounting policies and estimates that require significant judgment and thus
have the most significant potential impact on our Consolidated Financial
Statements included elsewhere in this Form 10-K. Our MD&A is organized as
follows:

Overview. This section provides a general description of our activities and

operating segments, recent developments, as well as a brief discussion and

? overall analysis of our business and financial performance, including

developments affecting us during the closed financial years September 30, 2021, 2020

and 2019.

Critical accounting conventions and estimates. This section deals with accounting

policies and estimates that require us to exercise

? judgments in their application. We believe that these accounting policies and

estimates are important for understanding assumptions and judgments

included in our published financial results.

Results of operations. This section provides an analysis of our

? results for the year ended September 30, 2021 compared to the

closed year September 30, 2020 and for the year ended in September

20, 2020 compared to the year ended September 20, 2019.

Liquidity and capital resources. This section provides an analysis of our

? liquidity and changes in cash flows, as well as a discussion of the

loans and contractual commitments.


You should read the MD&A in conjunction with our Consolidated Financial
Statements and related notes in this Form 10-K. In addition to historical
information, the MD&A contains forward-looking statements that involve risks and
uncertainties. You should read "Information Related to Forward-Looking
Statements" and Item 1A, "Risk Factors" included above in this Form 10-K for a
discussion of important factors that could cause our actual results to differ
materially from our expectations.

PREVIEW

General

We are a leading global provider of life science sample exploration and
management solutions for the life sciences market. We support our customers from
research to clinical development with our sample management, automated storage,
and genomic services expertise to help our customers bring impactful therapies
to market faster. We understand the importance of sample integrity and offer a
broad portfolio of products and services spanning across the life cycle of
samples from procurement and sourcing, automated storage platforms, genomic
services and a broad range of consumables, informatics and data software, and
sample management solutions. Our expertise and leadership positions enable us to
be a trusted partner to pharmaceutical, biotechnology, and life sciences
research institutions globally.

In the life sciences sample management market, we utilize our core technology
competencies and capabilities in automation and cryogenics to provide
comprehensive bio-sample management solutions to a broad range of end markets
within the life sciences industry. Our offerings include automated ultra-cold
storage freezers, consumable sample storage containers, instruments which assist
in the workflow of sample management, genomic services and both on-site and
off-site full sample management services. We expect the life sciences sample
management market to remain one of our principal markets for our product and
service offerings and provide favorable opportunities for the growth of our
overall business. Over the past several years, we have acquired and developed
essential capabilities required to strategically address the sample management
needs across multiple end markets within the life sciences industry.

Our life sciences portfolio includes products and services that we acquired to
bring together a comprehensive capability to service our customers' needs in the
sample-based services arena. We continue to develop the acquired products and
services offerings through the combined expertise of the newly acquired teams
and our existing research and development resources. We believe our approach of
acquisition, investment, and integration has allowed us to accelerate our
internal development and that of the acquired entity, significantly decreasing
our time to market.

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We have also strengthened and broadened our product portfolio and market reach
by investing in internal product development. We expect to continue investing in
research and development and making strategic acquisitions with the objective of
expanding our offerings in the life sciences market.

Within our Life Sciences Products segment, we have developed and continue to
develop automated biological sample storage solutions for operating in ultra-low
temperature environments. We have a complete line up of automated stores from
ambient temperatures to -190°. Our BioStore's ™ unique design allows controlled
temperature storage down to -80°C with the industry's highest throughput of
sample retrieval. Our BioStore portfolio offers improved data management and
sample security for vaccines and biologics stored at -80°C.

Within our Life Sciences Services segment, our genomics services business
advances research and development activities in gene sequencing, synthesis
editing and related services to meet market demands. Recently, enabled by newly
developed proprietary technologies, we launched a portfolio of new services,
targeting analysis of adeno-associated virus, a common vector used in cell and
gene therapy. We will continue to focus on developing processes and technologies
that can streamline sample to data workflow.

Sale of the semiconductor automation business

In the fourth quarter of fiscal year 2021, we entered into a definitive
agreement to sell our semiconductor automation business, which consists of our
Brooks Semiconductor Solutions Group reportable segment, to Thomas H. Lee,
Partners, L.P., or THL, for $3.0 billion in cash subject to customary
adjustments. Since our founding in 1978, we have been a leading automation
provider and partner to the global semiconductor manufacturing industry. At the
completion of the sale of the semiconductor automation business, we will no
longer serve this market. We anticipate 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 has been classified
as discontinued operations and, unless otherwise noted, this MD&A relates solely
to our continuing operations and does not include the operations of our
semiconductor automation business.



Sale of the Semiconductor Cryogenics business

In the fourth quarter of fiscal year 2018, we entered into a definitive
agreement to sell our semiconductor cryogenics business to Edwards Vacuum LLC (a
member of the Atlas Copco Group) for approximately $675.0 million in cash,
subject to customary adjustments. We originally acquired the cryogenics business
in 2005 as part of the acquisition of Helix Technology Corporation. The
semiconductor cryogenics business has been classified as discontinued operations
and, unless otherwise noted, this MD&A relates solely to our continuing
operations and does not include the operations of our semiconductor cryogenics
business.

On July 1, 2019, we completed the sale of the semiconductor cryogenics business
for $659.8 million. Net proceeds from the sale were $551.7 million, net of taxes
and closing costs paid and remaining taxes payable. During the first quarter of
fiscal year 2021, the final net working capital was determined, resulting in a
negative adjustment in the amount of $1.8 million payable to Edwards. As part of
this sale, we transferred our intellectual property, for our cryogenics pump
products, but not our intellectual property related to our semiconductor
automation or life sciences businesses.

On July 1, 2019, in connection with the completion of the sale of our
semiconductor cryogenics business, we used $495.3 million of the cash proceeds
to extinguish debt. As a result of the debt extinguishment we recorded a loss on
extinguishment of debt of $5.2 million in the fourth quarter of fiscal year
2019. Refer to "Liquidity and Capital Resources" for further discussion of
the
debt extinguishment.



Segments

Our business is comprised of two reportable segments, our Life Sciences Products
segment and our Life Sciences Services segment. For further information on our
reportable and operating segments, please refer to Note 19, "Segment and
Geographic Information" to our Consolidated Financial Statements included under
Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.

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Our Life Sciences Products business is a leading provider of automated
ultra-cold storage solutions for biological and chemical compound samples. Our
storage systems provide reliable automation and sample inventory management at
temperatures down to -196°C and can store anywhere from one to millions of
samples. Our sample management solutions include consumable vials and tubes, PCR
plates, instruments for supporting workflow, and informatics, all of which focus
on providing customers with the highest level of sample quality, security,
availability, intelligence and integrity throughout the lifecycle of samples
providing customers with complete end-to-end "cold-chain of custody"
capabilities.

Our Life Sciences Services business is a leading provider of solutions
addressing the many needs of customers in the area of genomic analysis and the
management and care of biological samples used in pharmaceutical, biotech,
healthcare, clinical, and academic research and development markets. Millions of
samples are processed every year, each containing valuable information that must
be preserved with the sample. Through our genomic services we provide a broad
capability to customers for sequencing and synthesis of genes. Our sample
management services include off-site storage services, transport services,
laboratory services, and interactive informatics solutions. We also provide
expert-level consultation services to our clients throughout their experimental
design and implementation. Our services also include short- and long-term sample
storage and management of the "cold chain of custody" from collection, to
storage, to retrieving the sample which ultimately may go back into the
customer's research workflow.

Commercial and financial performance

Results of operations –

Year ended September 30, 2021 Compared to the closed financial year September 30, 2020

We reported revenue of $513.7 million for fiscal year 2021 compared to $388.5
million for fiscal year 2020, an increase of $125.2 million, or 32%. Gross
margin was 47.5% for fiscal year 2021 compared to 44.3% for fiscal year 2020, an
increase in gross profit of $71.7 million. Operating expenses were $274.9
million for fiscal year 2021 compared to $208.7 million for fiscal year 2020, an
increase of $66.2 million. We reported an operating loss of $31.1 million for
fiscal year 2021 compared to an operating loss of $36.6 million for fiscal year
2020, a decrease in operating loss of $5.5 million, which was primarily
attributable to the revenue growth and gross margin improvement, partially
offset by higher operating expenses. Other expenses, net includes $16 million of
expense due to the release of a tax indemnification asset which is offset within
our income tax benefit from the release of a related liability. Overall, we
generated a net loss from continuing operations of $28.9 million during fiscal
year 2021 as compared to $26.4 million in fiscal year 2020. Please refer to the
"Results of Operations" section below for a detailed discussion of our financial
results for the fiscal year 2021 compared to fiscal year 2020.

Year ended September 30, 2020 Compared to the closed financial year September 30, 2019

We reported revenue of $388.5 million for fiscal year 2020 compared to $334.2
million for fiscal year 2019, an increase of $54.3 million, or 16%. Gross margin
was 44.3% for fiscal year 2020 compared to 40.3% for fiscal year 2019, an
increase in gross profit of $37.5 million. Operating expenses were $208.7
million for fiscal year 2020 compared to $182.0 million for fiscal year 2019, an
increase of $26.7 million. We reported an operating loss of $36.6 million for
fiscal year 2020 compared to an operating loss of $47.4 million for fiscal year
2019, a decrease in operating loss of $10.8 million, which was primarily
attributable to the revenue growth and gross margin improvement, partially
offset by higher operating expenses. We generated a net loss from continuing
operations of $26.4 million during fiscal year 2020 as compared to $61.1 million
in fiscal year 2019. The decrease in operating loss was primarily attributable
to our increase in operating income in the current year as well as a loss on
extinguishment of debt of $14.3 million and higher interest expense of $19.3
million in fiscal year 2019. Please refer to the "Results of Operations" section
below for a detailed discussion of our financial results for the fiscal
year 2020 compared to fiscal year 2019.

Cash flow and liquidity –

Our cash and cash equivalents, restricted cash and marketable securities were
$244.0 million as of September 30, 2021 and $260.7 million as of September 30,
2020. Both fiscal year 2021 and 2020 each exclude $45.0 million of cash
classified as assets held for sale related to the semiconductor automation
business.

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Cash and cash equivalents and restricted cash as presented on our Consolidated
Statements of Cash Flows is on a total company basis and were $285.3 million as
of September 30, 2021 compared to $302.5 million as of September 30, 2020. The
decrease of $17.2 million included cash outflows for investing activities of
$146.3 million and financing activities of $25.9 million, partially offset by
cash inflows from operating activities of $149.9 million. The effects of foreign
exchange positively impacted the annual change in balances by $5.2 million.

Please see the “Liquidity and Capital Resources” section below for a detailed discussion of our liquidity and changes in our cash flows for fiscal 2021 compared to fiscal 2020.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the Consolidated Financial Statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenue and expenses, and related disclosure of contingent assets and
liabilities. On an ongoing basis, we evaluate our estimates, including those
related to revenue, intangible assets, goodwill, inventories, income taxes, and
stock-based compensation. We base our estimates on historical experience and
various other assumptions that are believed to be reasonable under the
circumstances. We evaluate current and anticipated worldwide economic
conditions, both in general and specifically in relation to the life science
industry, that serve as a basis for making judgments about the carrying values
of assets and liabilities that are not readily determinable based on information
from other sources. Actual results may differ from these estimates under
different assumptions or conditions that could have a material impact on our
financial condition and results of operations.

We believe that the assumptions and estimates associated with the following critical accounting policies require significant judgment and therefore have the most significant potential impact on our consolidated financial statements.

Revenue recognition

We generate revenue from the sale of products and services. A description of our
revenue recognition policies is included in the Note 2, "Summary of Significant
Accounting Policies" in the Notes to the Consolidated Financial Statements
included in Item 8, "Financial Statements and Supplementary Data" of this
Form 10-K.

Although most of our sales agreements contain standard terms and conditions,
certain agreements contain multiple performance obligations or non-standard
terms and conditions. For customer contracts that contain more than one
performance obligation, we allocate the total transaction consideration to each
performance obligation based on the relative stand-alone selling price of each
performance obligation within the contract. We rely on either observable
standalone sales or an expected cost-plus margin approach to determine the
standalone selling price of offerings, depending on the nature of the
performance obligation. Performance obligations whose standalone selling price
is estimated using an expected cost-plus margin approach relate to the sale of
customized automated cold sample management systems and service-type warranties
within the Life Sciences Products segment.

Revenue from the sales of certain products that involve significant
customization, which primarily include automated cold sample management systems
is recognized over time as the asset created by our performance does not have
alternative use to us and an enforceable right to payment for performance
completed to date is present. We recognize revenue as work progresses based on
a percentage of actual labor hours incurred on the project to-date and total
estimated labor hours expected to be incurred on the project. The selection of
the method to measure progress towards completion requires judgment. We have
concluded that using the percentage of labor hours incurred to estimated labor
hours needed to complete the project most appropriately depicts our efforts
towards satisfaction of the performance obligation. We develop profit estimates
for long-term contracts based on total revenue expected to be generated from the
project and total costs anticipated to be incurred in the project. These
estimates are based on a number of factors, including the degree of required
product customization and the work required to be able to install the product in
the customer's existing environment, as well as our historical experience,
project plans and an assessment of the risks and uncertainties inherent in the
contract related to implementation delays or performance issues that may or may
not be within our control. We estimate a loss on a contract by comparing total
estimated contract revenue to the total estimated contract costs and recognize a
loss during the period in which it becomes probable and can be reasonably

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valued. We review the earnings estimates for long-term contracts during each reporting period and revise the estimate as circumstances change.

If our judgment regarding revenue recognition proves incorrect, our revenue in
particular periods may be adversely affected and could have a material impact on
our financial condition and results of operations.

Business combinations

We account for business acquisitions using the purchase method of accounting, in
accordance with which assets acquired and liabilities assumed are recorded at
their respective fair values at the acquisition date. The fair value of the
consideration paid, including contingent consideration, is assigned to the
assets acquired and liabilities assumed based on their respective fair values.
Goodwill represents the excess of the purchase price over the estimated fair
values of the assets acquired and liabilities assumed.

Significant judgment is used in determining fair values of assets acquired,
liabilities assumed and contingent consideration, as well as intangibles and
their estimated useful lives. Fair value and useful life determinations may be
based on, among other factors, estimates of future expected cash flows, royalty
cost savings and appropriate discount rates used in computing present values.
For all the current year acquisitions, management applied significant judgment
in estimating the fair value of the acquired intangible assets, which involved
significant estimates and assumptions with respect to forecast revenue growth
rates and the discount rates. These judgments may materially impact the
estimates used in allocating acquisition date fair values to assets acquired and
liabilities assumed, as well as our current and future operating results. Actual
results may vary from these estimates that may result in adjustments to goodwill
and acquisition date fair values of assets and liabilities during a measurement
period or upon a final determination of asset and liability fair values,
whichever occurs first. Adjustments to fair values of assets and liabilities
made after the end of the measurement period are recorded within our operating
results.

During the third quarter of fiscal 2021, the Company recorded $9.4 million level
3 liability which represents contingent consideration for an acquisition within
the Life Sciences Products segment. The amount is contingent based on the
acquired business' performance for the twelve-month period ending December 31,
2021. Please refer to Note 4, "Acquisitions" for further detail. Changes in the
fair value of contingent consideration resulting from a change in the underlying
inputs are recognized in results of operations until the arrangement is settled.

Intangible assets, Good will and other long-term assets

We have identified intangible assets and generated significant goodwill as a
result of our acquisitions. Intangible assets other than goodwill are valued
based on estimated future cash flows and amortized over their estimated useful
lives. Goodwill is tested for impairment annually or more often if impairment
indicators are present, at the reporting unit level. Intangible assets other
than goodwill and long-lived assets are subject to impairment testing if events
and circumstances indicate that the carrying amount of an asset or a group of
assets may not be recoverable.

The goodwill impairment test is performed at the reporting unit level. A
reporting unit is either an operating segment or one level below it, which is
referred to as a "component." The level at which the impairment test is
performed requires an assessment of whether the operations below an operating
segment constitute a self-sustaining business, in which case testing is
generally performed at this level.

We have two operating and two reportable segments consisting of Life Sciences
Products and Life Sciences Services. As of the date of our goodwill impairment
test, we had six reporting units which three reporting units are within
semiconductor automation discontinued operations. The three reporting units
within the continuing operations include one reporting unit within Life Sciences
Products operating segment and two reporting units within the Life Sciences
Services operating segment. As a result of a change in our management reporting
structure and 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.



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We perform our annual goodwill impairment assessment on April 1st of each fiscal
year. We evaluate a reporting unit's goodwill for impairment between annual
tests if events occur or circumstances change that would more likely than not
reduce the fair value of such reporting unit below its carrying value. In
accordance with ASC 350, Intangibles- Goodwill and Other, we initially assess
qualitative factors to determine whether the existence of events or
circumstances indicates that it is more likely than not that the fair value of a
reporting unit is less than its carrying value. If we determine, based on this
assessment, that it is more likely than not that the fair value of the reporting
unit is less than its carrying value, we perform a quantitative goodwill
impairment test by comparing the reporting unit's fair value with its carrying
value. An impairment loss is recognized for the amount by which the reporting
unit's carrying value exceeds its fair value, up to the total amount of goodwill
allocated to the reporting unit. No impairment loss is recognized if the fair
value of the reporting unit exceeds its carrying value. We also concluded that
the fair value of the aggregated reporting units significantly exceeded the book
value thus no adjustment to goodwill was necessary.



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. 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 model could result in different estimates of the
reporting unit's fair value as of each testing date.

We completed our annual goodwill impairment test as of April 1, 2021 for the
three reporting units within our continuing operations, including Life Sciences
Products as the only reporting unit within our Life Sciences Products segment,
and Sample Repository Solutions and Genomic Services within our Life Sciences
Services segment. Based on the test results, we determined that no adjustment to
goodwill was necessary. We 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, we did not perform the quantitative assessment for this reporting
unit, and therefore, did not recognize any impairment losses. We performed the
quantitative goodwill impairment test for the two reporting units within the
Life Sciences Services segment. We determined that no adjustment to goodwill was
necessary for these two reporting units. Both reporting units' fair values
significantly exceeded their respective book values.

We are required to test long-lived assets, other than goodwill, for impairment
when impairment indicators are present. For purposes of this test, long-lived
assets are grouped with other assets and liabilities at the lowest level for
which identifiable cash flows are largely independent of the cash flows of other
assets and liabilities. If we determine that indicators of potential impairment
are present, we assess the recoverability of the long-lived asset group by
comparing its undiscounted future cash flows to its carrying value. If the
carrying value of the long-lived asset group exceeds its future cash flows, we
determine fair values of the individual net assets within the long-lived asset
group to assess potential impairment. If the aggregate fair values of the
individual net assets of the group are less than their carrying values, an
impairment loss is recognized for an amount in excess of the group's aggregate
carrying value over its fair value. The loss is allocated to the assets within
the group based on their relative carrying values, with no asset reduced below
its fair value.

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During the fourth quarter of fiscal year 2021, we announced that the life
sciences businesses will be rebranded under a single, unified life sciences
brand, Azenta Life Sciences, or Azenta, during the first half of fiscal year
2022. We concluded that the abandoned tradenames for these businesses were fully
impaired in the fiscal fourth quarter of 2021 and recorded a $13.4 million
charge for the tradename impairment loss. The impairment loss is included in the
Selling, general and administrative expense in our Consolidated Statements of
Operations. We did not test our long-lived assets for impairment during
fiscal years 2020 since no events indicating impairment occurred during the
periods then ended.

Inventory

We state our inventory at the lower of cost or market amount and make
adjustments to reduce the inventory cost to its net realizable value by
providing estimated reserves for excess or obsolete inventory. The reserves are
established for the difference between the cost of inventory and its estimated
market value based on assumptions related to future demand and market conditions
to reduce the carrying value to its net realizable value. We fully reserve for
inventories and non-cancelable purchase orders for inventory deemed obsolete. We
perform periodic reviews of our inventory to identify excess inventories on
hand. We compare on-hand inventory balances to anticipated inventory usage based
on our recent historical activity and anticipated or forecasted demand for our
products developed through our planning systems and sales and marketing inputs.

We adjust the reserves for excess or obsolete inventory and record additional
inventory write downs based on unfavorable changes in estimated customer demand
or actual market conditions that may differ from management projections.

Deferred taxes

We record a valuation allowance to reduce our deferred tax assets to the amount
that is more likely than not to be realized. We consider recent historical
income, estimated future taxable income, carry-forward periods of tax
attributes, and ongoing tax planning strategies in assessing the need for the
valuation allowance. We evaluate the realizability of our deferred tax assets by
tax-paying component and assess the need for a valuation allowance on an annual
and quarterly basis. We evaluate the profitability of each tax-paying component
on a historic cumulative basis and on a forward-looking basis while performing
this analysis. After evaluating all the relevant positive and negative evidence
we reduced our valuation allowance against certain foreign net deferred tax
assets resulting in a tax benefit of $2.0 million in fiscal year 2021. We
continue to hold a U.S. valuation allowance related to the realizability of
certain state tax credits and net operating loss carry-forwards. We also
maintain valuation allowances against net deferred tax assets in certain foreign
tax-paying components as of the end of fiscal year 2021.

Stock-based compensation

We measure compensation cost for all employee stock awards at fair value on the
date of grant and recognize compensation expense over the service period for
awards expected to vest. The fair value of restricted stock units is determined
based on the number of shares granted and the closing price of our common stock
quoted on the Nasdaq Global Select Market on the date of grant, and the fair
value of stock options is determined using the Black-Scholes valuation model.
Such fair values are recognized as expense over the service period, net of
estimated forfeitures. The estimation of stock awards that will ultimately vest
requires significant judgment. We consider many factors when estimating expected
forfeitures, including types of awards, employee class, and historical
experience. In addition, for stock-based awards where vesting is dependent upon
achieving certain operating performance goals, we estimate the likelihood of
achieving the performance goals. Actual results, and future changes in
estimates, may differ from our current estimates.

Recently published accounting position papers

For a summary of recently issued accounting pronouncements applicable to our
Consolidated Financial Statements which is incorporated here by reference,
please refer to Note 2, "Summary of Significant Accounting Policies" in the
Notes to the Consolidated Financial Statements included in Item 8, "Financial
Statements and Supplementary Data" of this Form 10-K.

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RESULTS OF OPERATIONS

Year ended September 30, 2021 Compared to the closed financial year September 30, 2020

Revenue

We reported revenue of $513.7 million for fiscal year 2021 compared to $388.5
million for fiscal year 2020, an increase of $125.2 million, or 32%. The
COVID-19 pandemic has had varying impacts on our business for the fiscal year
ended September 30, 2021. Further discussion of the impacts by each segment are
discussed below.

Our Life Sciences Products segment reported revenue of $199.6 million for
fiscal year 2021 compared to $129.8 million for fiscal year 2020, an increase of
$69.8 million or 54%. The increase in revenue was driven by all major product
lines. Consumables and instruments were the most significant driver of the
increase, primarily due to COVID-19 related demand.

Our Life Sciences Services segment reported revenue of $314.1 million for
fiscal year 2021 compared to $258.8 million for fiscal year 2020, an increase of
$55.3 million or 21%. We reported an increase of $56.2 million from our genomics
services business driven by Next Generation sequencing, gene synthesis services
and Sanger sequencing. We reported a decrease in sample repository solutions
revenue of $1.0 million primarily due to reduction of outsourced genomic
services which were provided through an alliance with Infinity BiologiX LLC,
formerly RUCDR, that was terminated in the fourth quarter of fiscal year 2020.
Offsetting the decrease in revenue from the alliance was an increase in storage,
informatics, and revenue from the acquisition of Trans-Hit Bio. Revenue
increased 30% excluding the impact of the RUCDR alliance.

We estimate that the impact of the COVID-19 pandemic on our revenue for the
fiscal year ended September 30, 2021 was a net increase of approximately $53
million in the aggregate primarily attributable to the increased demand for in
our consumables and instruments products.



We anticipate continued growth in revenue from our life sciences products and
services businesses through our internally developed products and services and
through our acquired businesses and potential future acquisitions.

Revenue generated outside the United States amounted to $192.9 million, or 38%
of total revenue, for fiscal year 2021 compared to $135.0 million, or 35% of
total revenue, for fiscal year 2020.

Operating profit (loss)

We reported an operating loss of $31.1 million for fiscal year 2021 compared to
an operating loss of $36.6 million for fiscal year 2020. The decrease in
operating loss of 15% was driven by higher revenue and gross profit, partially
offset by an increase in both research and development expenses and selling,
general and administrative expenses compared to the prior fiscal year.

Within operating expenses, selling, general, and administrative expenses
increased $61.8 million, and research and development expenses increased $4.6
million. Restructuring expenses decreased $0.3 million. Selling, general and
administrative expenses for fiscal year 2021 included $13.4 million of
impairment charges related to abandoned tradenames due to the rebranding of our
life sciences business announced during the fourth quarter of fiscal year 2021.
Cost of sales in fiscal year 2021 also included $5.5 million of cost of sales
accrued for tariff liabilities related to intercompany import activity that
occurred during the fiscal years of 2016 through 2020.  The costs resulted from
an internal review of the transaction value used to calculate tariffs on
intercompany imports of samples shipped from our genomics services business.

Operating income for our Life Sciences Products segment was $22.0 million for
fiscal year 2021 compared to an operating loss of $4.2 million for fiscal year
2020. Cost of sales for our Life Sciences Products segment includes charges for
amortization related to completed technology of $1.1 million for fiscal year
2021 and $1.2 million for the fiscal year 2020. Adjusted operating income for
our Life Sciences Products segment, which excludes the charges mentioned above,
was $23.1 million for fiscal year 2021 and adjusted operating loss in fiscal
year 2020 was $3.0 million after excluding these charges. Please refer to Note
19, "Segment and Geographic Information".

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Operating income for our Life Sciences Services segment was $10.3 million for
fiscal year 2021 compared to an operating loss of $4.4 million for fiscal year
2020. Cost of sales for our Life Sciences Services segment includes charges for
amortization related to completed technology of $7.0 million for fiscal year
2021 and $6.9 million for 2020. Fiscal year 2021 cost of sales includes $5.5
million of cost accrued for tariff liabilities as discussed above. Fiscal year
2020 includes $0.3 million of restructuring related charges. Adjusted operating
income for our Life Sciences Services segment, which excludes the charges
mentioned above, was $22.7 million for fiscal year 2021 and adjusted operating
loss in fiscal year 2020 was $2.9 million after excluding these charges. Please
refer to Note 19, "Segment and Geographic Information".

Gross margin

We reported gross margins of 47.5% for fiscal year 2021 compared to 44.3% for
fiscal year 2020, an increase of 3.2 points. Gross margin increased 3.4
percentage points in the Life Sciences Products segment and 3.1 percentage
points in the Life Sciences Services segment. Cost of revenue for both
fiscal years 2021 and 2020 included $8.1 million of charges for amortization
related to completed technology. Cost of revenue for fiscal year 2021 included
$5.5 million of cost accrued for tariff liabilities as discussed above. Cost of
revenue for fiscal year 2020 included $0.3 million of restructuring related
charges. Excluding these charges, margins expanded 3.6 percentage points in
fiscal year 2021, as compared to fiscal year 2020.

Our Life Sciences Products segment reported gross margins of 46.4% for
fiscal year 2021 compared to 42.9% for fiscal year 2020. The improvement of 3.4
percentage points was primarily driven by volume leverage related to increased
sales across all product lines. Cost of revenue in fiscal year 2021 and 2020
included $1.1 million and $1.2 million, respectively, of amortization related to
completed technology.  Excluding these charges, margins expanded 3.1 percentage
points in fiscal year 2021, compared to fiscal year 2020.

Our Life Sciences Services segment reported gross margins of 48.1% for
fiscal year 2021 compared to 45.0% for fiscal year 2020. The improvement of 3.1
points was driven by volume leverage and revenue mix, partially offset by the
impact of the $5.5 million of cost accrued for the tariff liabilities as
discussed above. The revenue mix benefit included 2.9 percentage points from the
reduction in outsourced genomic services due to the exit of the alliance with
RUCDR.  Cost of revenue during fiscal year 2021 included $7.0 million of
amortization related to completed technology as compared to $6.9 million
incurred during fiscal year 2020. Cost of revenue for fiscal year 2020 included
$0.3 million of restructuring related charges. Excluding the impact of the
amortization related to completed technology, tariff charges and restructuring
related charges, as described above, margins expanded 4.3 percentage points in
fiscal year 2021, as compared to fiscal year 2020.

Research and development costs

Research and development costs were $ 22.4 million during fiscal year 2021 compared to $ 17.8 million in fiscal 2020, which accounted for 4.4% and 4.6% of revenue for fiscal 2021 and 2020, respectively.

Research and development expenses in our Life Sciences Products segment were
$10.9 million in fiscal 2021 compared to $8.7 million in fiscal year 2020, which
represented 5.4% and 6.7% of Life Sciences Products revenue in fiscal years 2021
and 2020, respectively. The increase in research and development expenses were
primarily attributable to investments in our cryogenic product line and outside
services costs.

Research and development expenses in our Life Sciences Services segment were
$11.5 million in fiscal 2021 compared to $9.1 million in fiscal year 2020 which
represented 3.7% and 3.5% of Life Sciences Services revenue for fiscal years
2021 and 2020, respectively. The increase in research and development expenses
was primarily driven by higher payroll related costs and project costs.

Selling, general and administrative expenses

Selling, general and administrative expenses were $252.1 million in fiscal year
2021 as compared to $190.3 million in fiscal year 2020. The increase of $61.8
million was driven by $26.2 million from segment selling, general and
administrative expenses and $35.6 million from corporate expenses not allocated
to our segments. The segment selling, general and administrative expenses are
discussed in further detail below. The increase in unallocated corporate

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expenses was primarily driven by mergers and acquisition related expenses, which
were $20.7 million for fiscal year 2021, compared to $0.5 million in fiscal year
2020. Merger and acquisition expenses for fiscal year 2021 included $18.6
million of costs related to separation activities resulting in the sale of the
semiconductor automation business. Unallocated corporate expenses also include
the amortization of intangible assets primarily related to customer
relationships, which were $8.1 million for both fiscal years 2021 and 2020.
Fiscal year 2021 also includes $13.4 million of impairment charges to intangible
assets related to tradenames. The charges were driven by the abandonment of
tradenames which resulted from the rebranding of our life sciences products and
life sciences services business during the fourth quarter of fiscal year 2021
and $0.8 million of costs related to rebranding and transformation efforts.

Selling, general and administrative expenses at the segment level, which are
discussed below, include corporate allocations from shared corporate function
which include finance, information technology, human resources, legal,
executive, governance, logistics and compliance, and variable compensation.
During fiscal year 2021 corporate allocated expenses increased $10.0 million
compared to fiscal year 2020, primarily due to higher variable compensation
accruals and information technology infrastructure costs.

Selling, general and administrative expenses for our Life Sciences Products segment were $ 59.7 million during fiscal year 2021 compared to $ 51.2 million during fiscal year 2020. The increase in $ 8.5 million is explained by the increase in sales commissions, variable compensation expenses and company-allocated costs, attributable to the factors described above.

Selling, general and administrative expenses in our Life Sciences Services
segment were $129.4 million in fiscal year 2021 as compared to $111.7 million in
fiscal year 2020. The increase of $17.6 million is primarily related to variable
compensation expense and costs to support growth, partially offset by lower
travel expenses, and lower bad debt expense

Non-operating income (expenses)

Interest income – During fiscal years 2021 and 2020, we recorded interest income of $ 0.6 million and $ 0.8 million respectively, which primarily represented interest earned on our marketable securities.

Interest expense – During fiscal years 2021 and 2020, we recognized interest expense of $ 2.0 million and $ 2.9 million, respectively. Interest expense is mainly related to our term loan.

Other expenses, net - During fiscal years 2021 and 2020 we recorded other
expenses, net of $16.5 million and $1.6 million, respectively. Other expense,
net for fiscal year 2021 includes a $16.0 million charge related to the release
of a tax indemnification asset which is offset in the Income tax benefit line
item in our Consolidated Statements of Operations.

Tax benefit

We recorded an income tax benefit on continuing operations of $20.1 million in
fiscal year 2021 compared to an income tax benefit of $13.9 million in fiscal
year 2020. The income tax benefit for fiscal year 2021 was primarily driven by
uncertain tax position reversals totaling $18.2 million, which includes $16.0
million of uncertain tax positions that were indemnified.  The tax reserve
reversal is offset by a $3.4 million tax charge related to the write off a
future tax deduction that would have been recognized if the uncertain tax
position was settled in an audit. The benefit also included $2.0 million of
benefits related to the reversal of valuation allowances against deferred tax
assets, losses in the U.S. jurisdiction and stock compensation deductions in
excess of book expenses. The overall benefit for fiscal year 2021 was partially
offset by $4.1 million of withholding tax costs related to repatriation of
foreign earnings in connection with the planned sale of the semiconductor
automation business and the tax provision on earnings in our foreign
jurisdictions during the year.



The income tax benefit during fiscal year 2020 was driven primarily by benefits
in the U.S. jurisdiction related to continuing operations losses and stock
compensation deductions in excess of book expenses. The overall benefit for
fiscal year 2020 was partially offset by the tax provisions on earnings in our
foreign jurisdictions during the year.



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Discontinued Operations

Discontinued operations include our semiconductor automation business and our
semiconductor cryogenics business. In the fourth quarter of fiscal year 2021, we
entered into a definitive agreement to sell our semiconductor automation
business to THL for $3 billion in cash, subject to customary adjustments. The
sale is expected to close in the first half of 2022. On July 1, 2019, we
completed the sale of the semiconductor cryogenics business for $659.8 million
in cash.

Revenue from discontinued operations was $680.1 million and $508.7 million,
respectively, for fiscal years 2021 and 2020 and relates to the semiconductor
automation business. Net income from discontinued operations was $139.6 million
and $91.2 million for fiscal years 2021 and 2020, respectively, and is comprised
primarily of the results of operations of our semiconductor automation business.
The income from discontinued operations only includes direct operating expenses
incurred that (1) are clearly identifiable as costs being disposed of upon
completion of the sale and (2) will not be continued by our company on an
ongoing basis. Indirect expenses which supported the semiconductor automation
business and semiconductor cryogenics business, and which remained as part of
the continuing operations, are not reflected in income from discontinued
operations.

Year ended September 30, 2020 Compared to the closed financial year September 30, 2019

Revenue

We reported revenue of $388.5 million for fiscal year 2020 compared to $334.2
million for fiscal year 2019, an increase of $54.3 million, or 16%. The COVID-19
pandemic had varying impacts on our business for the fiscal year ended September
30, 2020. The impacts by segment are discussed below.

Our Life Sciences Products segment reported revenue of $129.8 million for
fiscal year 2020 compared to $119.0 million for fiscal year 2019, an increase of
$10.7 million or 9%. The increase in revenue was driven by consumables and
instruments, which delivered record revenue levels driven by COVID-19 related
demand, and an increase in revenue for our BioStore III Cryo systems, partially
offset by decreases in revenue from automated cold sample management systems and
infrastructure services revenue which were both impacted by customer site
restrictions and schedule delays due to COVID-19.

Our Life Sciences Services segment reported revenue of $258.8 million for
fiscal year 2020 compared to $215.2 million for fiscal year 2019, an increase of
$43.6 million or 20%. We reported an increase of $40.2 million from genomic
services, which was composed of $20.0 million from the additional time of
ownership for fiscal year 2020, compared to the prior fiscal year and $20.2
million from organic growth. Our genomic services business, which is comprised
of the acquisition of GENEWIZ Group, or GENEWIZ, was acquired in November 2018.
We reported an increase in Sample Repository Solutions revenue of $3.4 million
primarily driven by informatics services and storage services, partially offset
by declines in outsourced genomic services and transportation services, which
were negatively impacted by COVID-19. Informatics revenue was primarily driven
by the acquisition of RURO in February 2020.

We estimate that the impact of the COVID-19 pandemic on our revenue for the
fiscal year ended September 30, 2020 was a net reduction of approximately $11
million in the aggregate primarily attributable to a slow-down in the
marketplace, reflecting the absence of a portion of the workforces within our
customers.  This slowdown was first present in the China market in the early
part of the second quarter ended March 31, 2020 and began surfacing in the rest
of the world in the latter part of March 2020.  Partially offsetting these
declines, we experienced an increase in demand for gene synthesis services and
consumables and instruments, in support of numerous activities including
research and development in the areas of virus detection and vaccines. During
the fourth quarter of fiscal year 2020, demand and shipments for certain
products and services in our life sciences businesses which were impacted by
COVID-19 recovered to levels we experienced prior to the pandemic.



Income generated outside United States amounted to $ 135.0 million, i.e. 35% of total revenue, for fiscal year 2020 compared to $ 81.7 million, or 24% of total revenue, for the 2019 financial year.

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Operating Income (Loss)

We reported an operating loss of $36.6 million for fiscal year 2020 compared to
$47.4 million for fiscal year 2019. The decrease in operating loss of $10.8
million was driven by higher revenue and gross profit, partially offset by an
increase in both selling, general and administrative expenses and research and
development expenses compared to the prior fiscal year. Drivers of the increases
to research and development and selling, general and administrative expenses are
described below.

Operating loss for our Life Sciences Products segment was $4.2 million for
fiscal year 2020 compared to an operating loss of $22.1 million for fiscal year
2019. Operating income for our Life Sciences Products segment includes charges
for amortization related to completed technology of $1.2 million in each of the
fiscal years 2020 and 2019. Adjusted operating loss for our Life Sciences
Products segment, which excludes the charges mentioned above, was $3.0 million
for fiscal year 2020 compared to an adjusted operating loss of $20.9 million in
fiscal year 2019. Please refer to Note 19, "Segment and Geographic Information".

Operating loss for our Life Sciences Services segment was $4.4 million for
fiscal year 2020 compared to operating income of $3.1 million for fiscal year
2019. Operating loss for our Life Sciences Services segment includes charges for
amortization related to completed technology of $6.9 million and $5.6 million
for fiscal years 2020 and 2019, respectively, and restructuring related charges
of $0.3 million in each of the fiscal years 2020 and 2019. Adjusted operating
income for our Life Sciences Services segment, which excludes the charges
mentioned above, was $2.9 million for fiscal year 2020 compared to $9.0 million
in fiscal year 2019. Please refer to Note 19, "Segment and Geographic
Information".

Gross margin

We reported gross margins of 44.3% for fiscal year 2020 compared to 40.3% for
fiscal year 2019, an increase of 4.0 points. Gross margin increased 6.2
percentage points in the Life Sciences Products segment and 2.7 percentage
points in the Life Sciences Services segment. Cost of revenue for fiscal year
2020 included $8.1 million of charges for amortization related to completed
technology as compared to $6.8 million in fiscal year 2019. Cost of revenue for
both fiscal year 2020 and 2019 included $0.3 million of restructuring related
charges. Excluding these charges, margins expanded 1.7 percentage points in
fiscal year 2020, as compared to fiscal year 2019.

Our Life Sciences Products segment reported gross margins of 42.9% for
fiscal year 2020 compared to 36.6% for fiscal year 2019. The improvement of 6.3
percentage points was driven by material and labor cost reductions related to
large stores and BIII Cryo systems, efficiencies realized installing large
stores and performing infrastructure services, and volume leverage.  Cost of
revenue in each of the fiscal years 2020 and 2019 included $1.2 million of
amortization related to completed technology.  Excluding these charges, margins
expanded 6.2 percentage points in fiscal year 2020, as compared to fiscal year
2019.

Our Life Sciences Services segment reported gross margins of 45.0% for
fiscal year 2020 compared to 42.3% for fiscal year 2019. The improvement of 2.7
percentage points is due to volume leverage, cost performance, and favorable
service mix.  Cost of revenue during fiscal year 2020 included $6.9 million of
amortization related to completed technology as compared to $5.6 million
incurred during fiscal year 2019. Cost of revenue for both fiscal year 2020 and
2019 included $0.3 million of restructuring related charges. Excluding these
charges, margins expanded 2.8 percentage points in fiscal year 2020, as compared
to fiscal year 2019.

Research and development costs

Research and development costs were $ 17.8 million in fiscal year 2020 compared to $ 17.3 million in fiscal 2019, which represented 4.6% and 5.2% of revenue, for fiscal 2020 and 2019, respectively.

Research and development expenses in our Life Sciences Products segment were
$8.7 million in fiscal 2020 compared to $10.8 million in fiscal year 2019, which
represented 6.7% and 9.1% of Life Sciences Products revenue for fiscal years
2020 and 2019, respectively. The decline in research and development expenses
were primarily attributable to lower outside service costs and lower temporary
employee costs supporting product development initiatives.

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Research and development expenses in our Life Sciences Services segment were
$9.1 million in fiscal 2020 compared to $6.5 million in fiscal year 2019, which
represented 3.5% and 3.0% of Life Sciences Services revenue for fiscal years
2020 and 2019, respectively. The increase in research and development expenses
was primarily driven by acquisitions. The timing of the GENEWIZ acquisition
added an additional $1.1 million of expense in fiscal year 2020 and the
acquisition of RURO, Inc. in February 2020 added $0.6 million of additional
expense. Investments in employee related costs and outside services to support
development initiatives in our service offerings drove the remainder of the
increase.

Selling, general and administrative expenses

Selling, general and administrative expenses were $190.3 million in fiscal year
2020 as compared to $163.3 million in fiscal year 2019. The increase of $26.9
million was driven by $26.6 million from segment selling, general and
administrative expenses and $0.3 million from corporate expenses not allocated
to our segments.

Selling, general and administrative expenses at the segment level, which are
discussed below, include corporate allocations from shared corporate functions
which include finance, information technology, human resources, legal,
executive, governance, logistics and compliance, and variable compensation.
During fiscal year 2020 corporate allocated expenses increased $33.8 million
compared to fiscal year 2019, primarily due to the integration of the shared
corporate functions from our acquisitions.

Selling, general and administrative expenses in our Life Sciences Products
segment were $51.2 million in fiscal year 2020 as compared to $54.9 million in
fiscal year 2019. The decrease of $3.7 million is primarily due to decreases in
employee related costs from restructuring actions taken in 2019 and 2020 and
decreases in expenses related to employee travel, trade shows, and conferences,
partially offset by higher corporate allocated costs and higher sales
commissions.

Selling, general and administrative expenses in our Life Sciences Services
segment were $111.7 million in fiscal year 2020 as compared to $81.4 million in
fiscal year 2019. The increase of $30.4 million is primarily related to
acquisitions, corporate allocations, and bad debt expense, partially offset by
lower employee travel expense. The timing of the GENEWIZ acquisition added an
additional $5.1 million of expense and the RURO acquisition added $1.2 million
of additional expense in fiscal year 2020.

Non-operating income (expenses)

Interest income – During fiscal years 2020 and 2019, we recorded interest income of $ 0.8 million and $ 1.4 million respectively, which primarily represented interest earned on our marketable securities.

Interest expense - During fiscal years 2020 and 2019, we recorded interest
expense of $2.9 million and $22.2 million, respectively. The decrease in
interest expense in the fiscal year 2020 compared to the prior fiscal year is
due to carrying less debt. We extinguished $495.3 million of debt during the
fourth quarter of fiscal year 2019.

Loss on extinguishment of debt - During fiscal year 2019, we recorded losses on
extinguishment of debt of $14.3 million of which $9.1 million was in connection
with the syndication of the incremental term loan secured during the first
quarter of fiscal 2019. The syndication to a new group of lenders during the
second quarter of fiscal 2019 met the criteria of a debt extinguishment and
therefore the amortization of the deferred financing costs associated with the
origination of the incremental term loan was accelerated and recorded as a loss
on extinguishment of debt in our Consolidated Statement of Operations. In
addition, as a result of the $495.3 million extinguishment of debt during the
fourth quarter of fiscal year 2019, we recorded an additional $5.2 million loss
on extinguishment of debt.

Other net charges – During fiscal years 2020 and 2019, we recorded other charges, net of $ 1.6 million and $ 1.4 million, respectively.

Tax benefit

We recorded an income tax benefit on continuing operations of $13.9 million in
fiscal year 2020 compared to an income tax benefit of $22.8 million in fiscal
year 2019. The income tax benefit during fiscal year 2020 was driven primarily
by benefits in the U.S. jurisdiction related to continuing operations losses and
stock compensation deductions

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beyond the cost of books. The overall benefit for fiscal 2020 was partially offset by the income tax provisions in our foreign jurisdictions during the fiscal year.



The income tax benefit during fiscal year 2019 was driven primarily by benefits
in the U.S. jurisdiction related to continuing operations losses, research tax
credits, and stock compensation deductions in excess of book expenses. We also
recorded a $1.4 million benefit due to a state tax change that resulted from the
acquisition of GENEWIZ.  We also recorded a tax provision of $3.0 million during
the year related to changes in the toll charge based on a change in tax
legislation and the completion of all accounting of the charge under SAB 118.
The overall benefit for fiscal year 2019 was partially offset by the tax
provisions on earnings in our foreign jurisdictions during the year.



Interrupted operations

As noted above, discontinued operations include the results of the semiconductor automation business and the results of the semiconductor cryogenics business, which was sold on July 1, 2019. The sale of the semiconductor automation business is expected to be finalized in the first half of calendar year 2022.

Revenue from discontinued operations was $508.7 million and $556.2 million,
respectively, for fiscal years 2020 and 2019, respectively. Revenue from
discontinued operations for fiscal year 2020 relates to the semiconductor
automation business. Revenue from discontinued operations for fiscal year 2019
includes $446.7 million related to the semiconductor automation business and
$109.5 million related to the semiconductor cryogenics business. Net income from
discontinued operations was $91.2 million for fiscal year 2020 and is comprised
primarily of our semiconductor automation business. Net income for fiscal 2019
was $498.5 million and includes the net gain on sale of the semiconductor
cryogenics business of $408.6 million. The net income for fiscal year 2019 is
also inclusive of income from the ULVAC Cryogenics, Inc. joint venture. The
income from discontinued operations only includes direct operating expenses
incurred that (1) are clearly identifiable as costs being disposed of upon
completion of the sale and (2) will not be continued by the Company on an
ongoing basis. Indirect expenses which supported the semiconductor automation
business and cryogenics business, and which remained as part of the continuing
operations, are not reflected in income from discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

We believe that we have adequate resources to satisfy our working capital,
financing activities, debt service and capital expenditure requirements for the
next twelve months. The current global economic environment, including the
uncertainty related to the short and long-term impacts of the COVID-19 pandemic,
make it difficult for us to predict longer-term liquidity requirements with
sufficient certainty. We may be unable to obtain any required additional
financing on terms favorable to us, if at all. If adequate funds are not
available to us on acceptable terms or otherwise, we may be unable to
successfully develop or enhance products and services, respond to competitive
pressure or take advantage of acquisition opportunities, any of which could have
a material adverse effect on our business, financial condition and operating
results.

The discussion of our cash flows and liquidity that follows does not include the
impact of any adjustments to remove discontinued operations, unless otherwise
noted, and is stated on a total company consolidated basis.

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Overview of cash flow and liquidity

Our cash and cash equivalents, restricted cash and marketable securities at
September 30, 2021 and 2020 consist of the following (in thousands):

                                                                 Year Ended September 30,
                                                                  2021              2020
Cash and cash equivalents                                     $     227,427     $     250,649
Restricted cash                                                      12,906             6,877
Short-term marketable securities                                         81                51
Long-term marketable securities                                       3,598             3,101
                                                              $     244,012 

$ 260,678

Cash, cash equivalents and restricted cash                          240,333

257,526

Cash and cash equivalents included in assets held for sale           45,000
           45,000
                                                              $     285,333     $     302,526




Our cash and cash equivalents, restricted cash and marketable securities were
$244.0 million as of September 30, 2021 and exclude $45 million of cash included
within assets held for sale related to the semiconductor automation business. As
of September 30, 2021, we had cash, cash equivalents and restricted cash
including cash in assets held for sale of $285.3 million, of which $169.6
million was held outside of the United States. If these funds are needed for the
United States operations, we would need to repatriate these funds.  As a result
of recent changes in U.S. tax legislation, any repatriation in the future would
likely not result in U.S. federal income tax.  During the quarter ended
September 30, 2021 we repatriated foreign cash to the U.S. in planning for the
sale of the discontinued operation and recognized all related tax costs.  We
have provided immaterial deferred income taxes for the impact of these future
repatriations.  Aside from these actions, our intent is to reinvest the
remaining foreign cash. Aside from these actions, our intent is to reinvest the
remaining foreign cash outside of the United States and our current operating
plans do not demonstrate a need to repatriate these funds for our U.S.
operations. We had marketable securities of $3.7 million and $3.2 million as of
September 30, 2021 and 2020, respectively. Our marketable securities are
generally readily convertible to cash without an adverse impact.

Year ended September 30, 2021 Compared to the closed financial year September 30, 2020

Overview

Cash Flows and Liquidity - Cash and cash equivalents and restricted cash as
presented on our Consolidated Statements of Cash Flows is on a total company
basis and were $285.3 million as of September 30, 2021 compared to $302.5
million as of September 30, 2020. The decrease of $17.2 million included cash
outflows for investing activities of $146.3 million and financing activities of
$25.9 million, partially offset by cash inflows from operating activities of
$149.9 million. The effects of foreign exchange positively impacted the annual
change in balances by $5.2 million.

Operating activities

Cash flows from operating activities can fluctuate significantly from period to
period as earnings, working capital needs and the timing of payments for income
taxes, restructuring activities and other charges impact reported cash flows.

Cash flows from operating activities of $149.9 million for the fiscal year ended
September 30, 2021, resulted from net income $110.7 million, adjusted to exclude
the effect of non-cash operating charges of $90.3 million, partially offset by
an increase in net operating assets of $51.2 million. Cash outflows from the
increase in net operating assets were primarily driven by increases in accounts
receivable, inventory, and prepaids and other assets partially offset by
increases in accounts payable, accrued expenses, and other liabilities and
accrued compensation and tax withholdings.

Cash flow from operating activities of $ 37.9 million for the year ended
September 30, 2020, results from the net result of $ 64.9 million, adjusted to exclude the effect of non-cash operating expenses of $ 77.2 million, partially

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offset by an increase in net operating assets of $12.7 million. Additionally,
the company paid $91.5 million in cash taxes related to the sale of the
semiconductor cryogenics business. Cash outflows related to the increase in net
operating assets were primarily driven by increases in accounts receivable,
inventory, and decreases in accrued expenses and other liabilities, partially
offset by increased accrued compensation and tax withholdings.

Discontinued operations contributed $139.6 million of net income to fiscal year
2021 and $91.2 million of net income to fiscal year 2020 referenced above. The
pending sale of the semiconductor automation business may have a negative impact
on cash flows from operations in future periods after the sale is completed.

Investment activities

Cash used in investing activities was $146.3 million during fiscal year 2021 and
consisted of $95.5 million for acquisitions and $52.8 million for capital
expenditures, partially offset by $2.0 million of proceeds from the collection
of loans receivable. Capital expenditures were made primarily to increase
capacity, support new product development, and enhance information technology
infrastructure. Capital expenditures for the fiscal year 2021 included $35.6
million for construction in process of a building site in Suzhou, China. The
site is intended to consolidate operations of three leased sites in the same
region, while expanding operational capacity.

Cash used in investing activities was $22.7 million during fiscal year 2020 and
consisted of $39.9 million for capital expenditures and $15.7 million for
acquisitions, partially offset by $33.9 million of net proceeds from the net
purchases, sales, and maturities of marketable securities.

Fundraising activities

Cash used for financing activities was $25.9 million during fiscal year 2021 and
included net cash outflows for cash dividends paid of $29.7 million, $1.2
million in payment of finance leases and $0.8 million of debt principal
payments. Partially offsetting these cash outflows was $5.8 million related to
the proceeds from issuance of common stock.

Cash used for financing activities was $27.0 million during fiscal year 2020 and
included net cash outflows for cash dividends paid of $29.5 million, $1.3
million in payment of finance leases and $0.8 million of debt principal
payments. Partially offsetting these cash outflows was $4.6 million related to
the proceeds from issuance of common stock.

Installation in China

In April 2019, we committed to construct a facility in Suzhou China, to
consolidate the Suzhou operations of our genomic services business and provide
infrastructure to support future growth.  The facility is being constructed in
two phases.  We have incurred $35.6 million of capital expenditures to date
related to the construction of the facility, which includes $26.0 million and
$8.3 million, respectively, for fiscal years 2021 and 2020, respectively.

Capital resources

Term loans

On October 4, 2017, we entered into a $200.0 million term loan with Morgan
Stanley Senior Funding, Inc., JPMorgan Chase Bank, N.A. and Wells Fargo
Securities, LLC pursuant to the terms of a credit agreement with the lenders.
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. The loan principal amount may be increased by an aggregate
amount equal to $75.0 million plus any voluntary repayments of the term loan
plus any additional amount such that our secured leverage ratio is less than
3.00 to 1.00.

The term loan matures and becomes fully payable on October 4, 2024. Installment
principal payments equal to 0.25% of the initial principal amount of the term
loan are payable on the last day of each quarter, with any remaining principal
amount becoming due and payable on the maturity date. Subject to certain
conditions stated in the credit agreement, we may redeem the term loan at any
time at our option without a significant premium or penalty, except for a
repricing transaction, as defined in the credit agreement. We are required to
redeem the term loan at the principal amount then outstanding upon the
occurrence of certain events, as set forth in the credit agreement.

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On November 15, 2018, we entered into an incremental amendment to the credit
agreement under which we obtained an incremental term loan in an aggregate
principal amount of $350.0 million, issued at $340.5 million. The proceeds of
the incremental term loan were used to pay a portion of the purchase price for
our acquisition of GENEWIZ. On February 15, 2019, we entered into the second
amendment to the credit agreement and syndicated the incremental term loan to a
group of new lenders. The syndicated incremental term loan was issued at $345.2
million. Except as provided for in the amendments, the incremental term loan was
subject to the same terms and conditions of the initial term loan.

On July 1, 2019, in connection with the completion of the sale of our
semiconductor cryogenics business, we used $348.3 million of the cash proceeds
from the transaction to extinguish the outstanding balance at July 1, 2019 of
the incremental term loan and $147.0 million of the cash proceeds from the
transaction to extinguish a portion of the outstanding balance at July 1, 2019
of the term loan. The total amount of debt extinguished on July 1, 2019 was
$495.3 million.

The credit agreement, as amended, for contains certain customary representations
and warranties, covenants and events of default. As of September 30, 2021, we
were in compliance with all covenants and conditions under the credit agreement,
as amended.

In connection with our acquisition of GENEWIZ in November 2018, we assumed three
five-year term loans and two one-year term loans. The two one-year short term
loans matured and were repaid in full as of September 30, 2020. The three
five-year term loans matured and were repaid in full during fiscal year 2021.

At September 30, 2021, the aggregate outstanding principal balance of all
outstanding term loans was $49.7 million, excluding unamortized deferred
financing costs of $0.3 million. Borrowings under the term loans bear variable
interest rates. As a result, we may experience exposure to interest rate risk
due to the potential volatility associated with the variable interest rates on
the term loans. If rates increase, we may be subject to higher costs of
servicing the loans which could reduce our profitability and cash flows. During
the year ended September 30, 2021, the weighted average stated interest rate on
the term loans was 2.8%. During the year ended September 30, 2021, we incurred
aggregate interest expense of $1.7 million on the term loans, including $0.2
million of deferred financing costs amortization. Our debt service requirements
are expected to be funded through our existing sources of liquidity and
operating cash flows.

Line of credit facility

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

As of September 30, 2021, we had approximately $57.7 million available for
borrowing under the line of credit. There were no amounts outstanding pursuant
to the line of credit as of September 30, 2021. The amount of funds available
for borrowing under the credit agreement may fluctuate each period based on our
borrowing base availability. The credit agreement contains certain customary
representations and warranties, a financial covenant, affirmative and negative
covenants, as well as events of default. We were in compliance with the credit
agreement as of September 30, 2021. Although we believe we will be able to
generate sufficient cash in the United States and foreign jurisdictions to fund
future operating costs, we secured the revolving line of credit as an additional
assurance for maintaining liquidity in the United States for strategic
investments and acquisitions.



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Dividends

Our Board of Directors declared the following dividends during fiscal years 2021 and 2020 (in thousands, except per share data):

                                           Dividend
                                             per             Record               Payment
Declaration Date                            Share             Date                  Date            Total
Fiscal Year Ended September 30, 2021
November 5, 2020                          $     0.10    December 4, 2020     December 17, 2020     $ 7,421
January 25, 2021                                0.10    March 5, 2021        March 26, 2021          7,429
April 27, 2021                                  0.10    June 4, 2021         June 25, 2021           7,430
August 3, 2021                                  0.10    September 3, 2021    September 24, 2021      7,435
Fiscal Year Ended September 30, 2020
November 1, 2019                          $     0.10    December 6, 2019     December 20, 2019     $ 7,362
January 24, 2020                                0.10    March 6, 2020        March 27, 2020          7,375
April 29, 2020                                  0.10    June 5, 2020         June 26, 2020           7,376
July 29, 2020                                   0.10    September 4, 2020    September 25, 2020      7,383




On November 2, 2021, our Board of Directors approved a cash dividend of $0.10
per share of our common stock. The total dividend of approximately $7.5 million
will be paid on December 23, 2021 to shareholders of record at the close of
business on December 3, 2021. Dividends are declared at the discretion of our
Board of Directors and depend on actual cash flow from operations, our financial
condition, debt service and capital requirements and any other factors our Board
of Directors may consider relevant. On November 16, 2021 at our investor day
conference, we disclosed that we intend to discontinue paying a quarterly
dividend upon the completion of the sale of our semiconductor automation
business.

Share buyback program

On September 29, 2015, our Board of Directors approved a share repurchase
program for up to $50.0 million worth of our common stock. The timing and amount
of any shares repurchased are based on market and business conditions, legal
requirements and other factors and may be commenced or suspended at any time at
our discretion. There were no shares repurchased under this program during
fiscal year 2021.

Obligations and contractual requirements

TO September 30, 2021, we had non-cancellable commitments of $ 65.9 million, including purchase orders for the inventory of $ 44.0 million, the commitments related to the information technologies of $ 15.9 million and China facility commitments $ 6.0 million related to the construction of our factory in China discussed above.

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 our 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 we fail to meet certain
contractual requirements. None of these obligations were called during
fiscal year 2021, and we currently do not anticipate any of these obligations to
be called in the near future.

As of September 30, 2021, the total amount of net unrecognized tax benefits for
uncertain tax positions and the accrual for the related interest was $2.0
million, all of which represents a potential future cash outlay, in comparison
to September 30, 2020 where the balance was $18.5 million. The decrease in the
balance over the year was primarily driven by many of our accruals on our
preexisting unrecognized tax benefits for uncertain tax positions reaching their
statute of limitations. We are unable to make a reasonably reliable estimate of
the timing of the cash settlement for these liabilities since the timing of
future tax examinations by various tax jurisdictions and the related resolution
is uncertain.







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