UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended: June 30, ~~2020~~2021

	OR

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to _________

Commission File Number 000-25434

BROOKS AUTOMATION, INC.

(Exact name of registrant as specified in its charter)


Delaware	04-3040660
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

15 Elizabeth Drive

Chelmsford, Massachusetts

(Address of principal executive offices)

01824

(Zip Code)

Registrant’s telephone number, including area code: (978) 262-2400

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	BRKS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date, July ~~24, 2020:~~29, 2021: common stock, $0.01 par value and ~~73,760,246~~74,296,729 shares outstanding.

Table of Contents

BROOKS AUTOMATION, INC.

Table of Contents

	PAGE NUMBER

PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of June 30, ~~2020~~2021 (unaudited) and September 30, ~~2019~~2020	3
Consolidated Statements of Operations for the three and nine months ended June 30, ~~2020~~2021 and ~~2019~~2020 (unaudited)	4
Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, ~~2020~~2021 and ~~2019~~2020 (unaudited)	5
Consolidated Statements of Cash Flows for the nine months ended June 30, ~~2020~~2021 and ~~2019~~2020 (unaudited)	6
Consolidated Statements of Changes in Stockholders Equity for the three and nine months ended June 30, ~~2020~~2021 and ~~2019~~2020 (unaudited)	7
Notes to Consolidated Financial Statements (unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3633
Item 3. Quantitative and Qualitative Disclosures About Market Risk	4947
Item 4. Controls and Procedures	5149
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	5350
Item 1A. Risk Factors	5350
Item 6. Exhibits	5551
Signatures	5652

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

BROOKS AUTOMATION, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)


	June 30,		September 30,		June 30,		September 30,
	2020		2019		2021		2020
Assets
Current assets
Cash and cash equivalents	$	256,633	$	301,642	$	269,862	$	295,649
Marketable securities		136		34,124		101		67
Accounts receivable, net		183,167		165,602		234,079		188,291
Inventories		117,686		99,445		154,720		114,834
Prepaid expenses and other current assets		44,389		46,332		58,455		50,612
Total current assets		602,011		647,145		717,217		649,453
Property, plant and equipment, net		111,416		100,669		146,522		117,665
Long-term marketable securities		2,939		2,845		3,637		3,101
Long-term deferred tax assets		3,489		5,064		4,447		4,979
Goodwill		500,062		488,602		551,326		501,536
Intangible assets, net		226,623		251,168		254,937		218,325
Other assets		57,377		20,506		85,169		64,066
Total assets	$	1,503,917	$	1,515,999	$	1,763,255	$	1,559,125
Liabilities and Stockholders' Equity
Current liabilities
Current portion of long-term debt	$	828	$	829	$	—	$	827
Accounts payable		70,344		58,919		98,192		61,758
Deferred revenue		31,162		29,435		35,421		31,357
Accrued warranty and retrofit costs		7,881		7,175		8,132		8,201
Accrued compensation and benefits		33,847		31,375		43,803		43,267
Accrued restructuring costs		437		1,040		29		181
Accrued income taxes payable		16,253		99,263		22,232		10,094
Accrued expenses and other current liabilities		45,053		44,234		103,251		55,433
Total current liabilities		205,805		272,270		311,060		211,118
Long-term debt		49,563		50,315		49,651		49,588
Long-term tax reserves		19,609		18,274		18,410		19,168
Long-term deferred tax liabilities		10,613		20,636		16,295		17,798
Long-term pension liabilities		5,724		5,338		6,536		6,406
Long-term operating lease liabilities		29,280		—		45,034		31,855
Other long-term liabilities		8,470		10,212		8,440		9,578
Total liabilities		329,064		377,045		455,426		345,511
Commitments and contingencies (Note 17)
Stockholders' Equity
Preferred stock, $0.01 par value - 1,000,000 shares authorized, 0 shares issued or outstanding		—		—		—		—
Common stock, $0.01 par value - 125,000,000 shares authorized, 87,222,115 shares issued and 73,760,246 shares outstanding at June 30, 2020, 85,759,700 shares issued and 72,297,831 shares outstanding at September 30, 2019		872		857
Common stock, $0.01 par value - 125,000,000 shares authorized, 87,758,598 shares issued and 74,296,729 shares outstanding at June 30, 2021, 87,293,710 shares issued and 73,831,841 shares outstanding at September 30, 2020						878		873
Additional paid-in capital		1,936,619		1,921,954		1,965,705		1,942,850
Accumulated other comprehensive income		10,977		3,511		26,619		21,919
Treasury stock, at cost- 13,461,869 shares		(200,956)		(200,956)
Treasury stock, at cost - 13,461,869 shares						(200,956)		(200,956)
Accumulated deficit		(572,659)		(586,412)		(484,417)		(551,072)
Total stockholders' equity		1,174,853		1,138,954		1,307,829		1,213,614
Total liabilities and stockholders' equity	$	1,503,917	$	1,515,999	$	1,763,255	$	1,559,125

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

Table of Contents

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except per share data)


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020

Revenue
Products	$	142,323	$	128,397	$	413,329	$	381,827	$	215,843	$	142,323	$	565,829	$	413,329
Services		78,027		75,483		237,748		199,810		99,506		78,027		285,610		237,748
Total revenue		220,350		203,880		651,077		581,637		315,349		220,350		851,439		651,077
Cost of revenue
Products		81,989		77,203		245,930		229,580		120,387		81,989		317,472		245,930
Services		45,573		43,167		137,092		115,951		50,562		45,573		149,165		137,092
Total cost of revenue		127,562		120,370		383,022		345,531		170,949		127,562		466,637		383,022
Gross profit		92,788		83,510		268,055		236,106		144,400		92,788		384,802		268,055
Operating expenses
Research and development		14,004		14,235		43,727		41,485		18,284		14,004		51,310		43,727
Selling, general and administrative		59,714		52,596		178,866		158,509		75,883		59,714		221,646		178,866
Restructuring charges		(29)		256		1,125		685		—		(29)		179		1,125
Total operating expenses		73,689		67,087		223,718		200,679		94,167		73,689		273,135		223,718
Operating income		19,099		16,423		44,337		35,427		50,233		19,099		111,667		44,337
Interest income		29		108		865		847		409		29		503		865
Interest expense		(810)		(8,041)		(2,265)		(21,348)		(477)		(810)		(1,485)		(2,265)
Loss on extinguishment of debt		—		—		—		(9,051)
Other income (expenses), net		498		(309)		(1,318)		(1,116)		(1,625)		498		(147)		(1,318)
Income before income taxes		18,816		8,181		41,619		4,759		48,540		18,816		110,538		41,619
Income tax provision		5,120		7,260		5,557		400		9,370		5,120		20,428		5,557
Income from continuing operations		13,696		921		36,062		4,359		39,170		13,696		90,110	��	36,062
Income (loss) from discontinued operations, net of tax		—		6,333		(182)		20,731
Loss from discontinued operations, net of tax										(4)		—		(1,168)		(182)
Net income	$	13,696	$	7,254	$	35,880	$	25,090	$	39,166	$	13,696	$	88,942	$	35,880
Basic net income per share:
Income from continuing operations	$	0.19	$	0.01	$	0.49	$	0.06	$	0.53	$	0.19	$	1.21	$	0.49
Income (loss) from discontinued operations, net of tax		—		0.09		(0.00)		0.29
Loss from discontinued operations, net of tax										(0.00)		—		(0.02)		(0.00)
Basic net income per share	$	0.19	$	0.10	$	0.49	$	0.35	$	0.53	$	0.19	$	1.20	$	0.49
Diluted net income per share:
Income from continuing operations	$	0.19	$	0.01	$	0.49	$	0.06	$	0.53	$	0.19	$	1.21	$	0.49
Income (loss) from discontinued operations, net of tax		—		0.09		(0.00)		0.29
Loss from discontinued operations, net of tax										(0.00)		—		(0.02)		(0.00)
Diluted net income per share	$	0.19	$	0.10	$	0.49	$	0.35	$	0.53	$	0.19	$	1.20	$	0.49
Weighted average shares used in computing net income per share:
Basic		73,759		72,188		73,473		71,903		74,296		73,759		74,195		73,473
Diluted		73,860		72,470		73,766		72,313		74,495		73,860		74,420		73,766

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

Table of Contents

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(In thousands)


	Three Months Ended				Nine Months Ended
	June 30,				June 30,				Three Months Ended				Nine Months Ended
	2020		2019		2020		2019		June 30,				June 30,
									2021		2020		2021		2020
Net income	$	13,696	$	7,254	$	35,880	$	25,090	$	39,166	$	13,696	$	88,942	$	35,880
Other comprehensive income (loss), net of tax:
Other comprehensive income, net of tax:
Foreign currency translation adjustments		3,690		2,724		7,484		888		4,003		3,691		4,721		7,484
Unrealized gains on marketable securities, net of tax effects of $0 during each of the three and nine months ended June 30, 2020, and $0 during each of the three and nine months ended June 30, 2019		—		—		7		111
Actuarial (losses) gains, net of tax effects of $2 and $4 during the three and nine months ended June 30, 2020, ($3) and $0 during the three and nine months ended June 30, 2019		(13)		9		(25)		—
Unrealized gains (losses) on marketable securities, net of tax effects of $0 during each of the three and nine months ended June 30, 2021, and $0 during each of the three and nine months ended June 30, 2020										—				—		7
Actuarial losses, net of tax effects of $3 and $4 during the three and nine months ended June 30, 2021, respectively, $2 and $4 during the three and nine months ended June 30, 2020, respectively										(21)		(13)		(20)		(25)
Total other comprehensive income, net of tax		3,677		2,733		7,466		999		3,982		3,678		4,701		7,466
Comprehensive income	$	17,373	$	9,987	$	43,346	$	26,089	$	43,148	$	17,374	$	93,643	$	43,346

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

Table of Contents

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)


					Nine Months Ended
	Nine Months Ended				June 30,
	June 30,				2021		2020
	2020		2019
Cash flows from operating activities
Net income	$	35,880	$	25,090	$	88,942	$	35,880
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		49,760		40,429		48,684		49,760
Impairment of property, plant and equipment		301		—		—		301
Stock-based compensation		12,348		15,172		20,277		12,348
Amortization of premium on marketable securities and deferred financing costs		177		766		169		177
Earnings of equity method investments		—		(4,876)
Deferred income taxes		(9,319)		(9,207)		(10,293)		(9,319)
Loss on extinguishment of debt		—		9,051
Other losses on disposals of assets		163		156		225		163
Loss on sale of divestiture, net of tax		319		—
Adjustment to the gain on divestiture, net of tax						948		319
Taxes paid stemming from divestiture		(91,500)		—		—		(91,500)
Changes in operating assets and liabilities, net of acquisitions and divestiture:
Accounts receivable		(15,719)		(6,456)		(40,286)		(15,719)
Inventories		(17,695)		(6,431)		(32,532)		(17,695)
Prepaid expenses and other assets		12,554		2,109		4,000		12,554
Accounts payable		11,032		(6,761)		23,327		11,032
Deferred revenue		214		4,959		(1,564)		214
Accrued warranty and retrofit costs		580		1,022		(286)		580
Accrued compensation and tax withholdings		1,928		(9,404)		(338)		1,928
Accrued restructuring costs		(609)		(361)		(153)		(609)
Proceeds from recovery on insurance claim		—		1,082
Accrued expenses and other liabilities		(4,347)		1,901		21,625		(4,347)
Net cash (used in) provided by operating activities		(13,933)		58,241
Net cash provided by (used in) operating activities						122,745		(13,933)
Cash flows from investing activities
Purchases of property, plant and equipment		(29,685)		(15,548)		(34,606)		(29,685)
Purchases of marketable securities		(10,843)		(1,290)		(100)		(10,843)
Sales of marketable securities		2,492		48,904		25		2,492
Maturities of marketable securities		42,226		2,557		25		42,226
Adjustment to proceeds from divestiture						(1,802)		—
Acquisitions, net of cash acquired		(15,743)		(442,704)		(92,375)		(15,743)
Issuance of a note receivable		(1,000)		—		—		(1,000)
Net cash used in investing activities		(12,553)		(408,081)		(128,833)		(12,553)
Cash flows from financing activities
Proceeds from term loans, net of discount		—		686,386
Proceeds from issuance of common stock		2,332		1,548		2,583		2,332
Payments of financing costs		—		(687)
Principal payments on debt		(828)		(354,940)		(828)		(828)
Payments of capital leases		(957)		(849)
Payments of finance leases						(915)		(957)
Common stock dividends paid		(22,127)		(21,658)		(22,288)		(22,127)
Net cash (used in) provided by financing activities		(21,580)		309,800
Net cash used in financing activities						(21,448)		(21,580)
Effects of exchange rate changes on cash and cash equivalents		3,095		(816)		7,582		3,095
Net decrease in cash, cash equivalents and restricted cash		(44,971)		(40,856)		(19,954)		(44,971)
Cash, cash equivalents and restricted cash, beginning of period		305,171		197,708		302,526		305,171
Cash, cash equivalents and restricted cash, end of period	$	260,200	$	156,852	$	282,572	$	260,200
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property, plant and equipment included in accounts payable	$	2,020	$	1,847	$	14,516	$	2,020

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents	$	256,633	$	156,802	$	269,862	$	256,633
Restricted cash included in prepaid expenses and other current assets		3,567		50
Short-term restricted cash included in prepaid expenses and other current assets						3,570		3,567
Long-term restricted cash included in other assets						9,140		—
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	260,200	$	156,852	$	282,572	$	260,200

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

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BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

(unaudited)

(In thousands, except share data)

Common

Accumulated

Common

Stock at

Additional

Other

Stock

Par

Paid-In

Comprehensive

Accumulated

Treasury

Total

Shares

Value

Capital

Income

Deficit

Stock

Equity

(In thousands, except share data)
Balance September 30, 2018

84,164,130

$
841

$
1,898,434

$
13,587

$
(994,074)

$
(200,956)

$
717,832
Shares issued under restricted stock and purchase plans, net

1,517,144

16

1,532

1,548
Stock-based compensation

15,172







15,172
Common stock dividends declared, at $0.30 per share







(21,656)



(21,656)
Foreign currency translation adjustments







888





888
Changes in unrealized gains on marketable securities, net of tax effects of $0







111





111
Net income







—

25,090



25,090
Cumulative effect of adoption of ASC 606







(859)



(859)
Balance June 30, 2019

85,681,274

$
857

$
1,915,138

$
14,586

$
(991,499)

$
(200,956)

$
738,126

Balance September 30, 2019

85,759,700

$
857

$
1,921,954

$
3,511

$
(586,412)

$
(200,956)

$
1,138,954
Shares issued under restricted stock and purchase plans, net

1,462,415

15

2,317

2,332
Stock-based compensation

12,348







12,348
Common stock dividends declared, at $0.30 per share







(22,127)



(22,127)
Foreign currency translation adjustments







7,484





7,484
Changes in unrealized losses on marketable securities, net of tax effects of $0







7





7
Actuarial losses, net of tax effects of $4







(25)





(25)
Net income







35,880



35,880
Balance June 30, 2020

87,222,115

$
872

$
1,936,619

$
10,977

$
(572,659)

$
(200,956)

$
1,174,853



		Common				Accumulated
	Common	Stock at		Additional		Other
	Stock	Par		Paid-In		Comprehensive		Accumulated		Treasury		Total
	Shares	Value		Capital		Income		Deficit		Stock		Equity
Balance March 31, 2021	87,755,666	$	878	$	1,959,619	$	22,637	$	(516,152)	$	(200,956)	$	1,266,026
Shares issued under restricted stock and purchase plans, net	2,932		—		—								—
Stock-based compensation					6,086								6,086
Common stock dividends declared, at $0.10 per share									(7,431)				(7,431)
Foreign currency translation adjustments							4,003						4,003
Actuarial loss, net of tax effects of $3							(21)						(21)
Net income									39,166				39,166
Balance June 30, 2021	87,758,598	$	878	$	1,965,705	$	26,619	$	(484,417)	$	(200,956)	$	1,307,829

Balance March 31, 2020	87,214,622	$	872	$	1,932,893	$	7,299	$	(578,975)	$	(200,956)	$	1,161,133
Shares issued under restricted stock and purchase plans, net	7,493		—		1								1
Stock-based compensation					3,725								3,725
Common stock dividends declared, at $0.10 per share									(7,380)				(7,380)
Foreign currency translation adjustments							3,691						3,691
Actuarial losses, net of tax effects of $2							(13)						(13)
Net income									13,696				13,696
Balance June 30, 2020	87,222,115	$	872	$	1,936,619	$	10,977	$	(572,659)	$	(200,956)	$	1,174,853

Balance September 30, 2020	87,293,710	$	873	$	1,942,850	$	21,919	$	(551,072)	$	(200,956)	$	1,213,614
Shares issued under restricted stock and purchase plans, net	464,888		5		2,578								2,583
Stock-based compensation					20,277								20,277
Common stock dividends declared, at $0.30 per share									(22,287)				(22,287)
Foreign currency translation adjustments							4,720						4,720
Actuarial loss, net of tax effects of $4							(20)						(20)
Net income									88,942				88,942
Balance June 30, 2021	87,758,598	$	878	$	1,965,705	$	26,619	$	(484,417)	$	(200,956)	$	1,307,829

Balance September 30, 2019	85,759,700	$	857	$	1,921,954	$	3,511	$	(586,412)	$	(200,956)	$	1,138,954
Shares issued under restricted stock and purchase plans, net	1,462,415		15		2,317								2,332
Stock-based compensation					12,348								12,348
Common stock dividends declared, at $0.30 per share									(22,127)				(22,127)
Foreign currency translation adjustments							7,484						7,484
Changes in unrealized losses on marketable securities, net of tax effects of $0							7						7
Actuarial losses, net of tax effects of $4							(25)						(25)
Net income									35,880				35,880
Balance June 30, 2020	87,222,115	$	872	$	1,936,619	$	10,977	$	(572,659)	$	(200,956)	$	1,174,853

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

Table of Contents

BROOKS AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Basis of Presentation

The unaudited consolidated financial statements of Brooks Automation, Inc. and its subsidiaries (“Brooks”, or the “Company”) included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all material adjustments, which are of a normal and recurring nature and necessary for a fair statement of the financial position and results of operations and cash flows for the periods presented, have been reflected in the accompanying unaudited consolidated financial statements. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year.

Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted and, accordingly, the accompanying financial information should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) for the fiscal year ended September 30, ~~2019~~2020 (the ~~"2019~~“2020 Annual Report on Form ~~10-K"~~10-K”). The accompanying Consolidated Balance Sheet as of September 30, ~~2019~~2020 was derived from the audited annual consolidated financial statements as of the period then ended.

Discontinued Operations

In the fourth quarter of fiscal year 2018, the Company entered into a definitive agreement to sell its semiconductor cryogenics business (the “Disposition”) to Edwards Vacuum LLC (a member of the Atlas Copco Group) (“Edwards”). The Company determined that the semiconductor cryogenics business met the “held for sale” criteria and the “discontinued operations” criteria in accordance with Financial Accounting Standard Boards (“FASB”) Accounting Standards Codification (“ASC”) 205, Presentation of Financial Statements (“FASB ASC 205”), as of September 30, 2018. The Consolidated Balance Sheets and Consolidated Statements of Operations, and the notes to the Consolidated Financial Statements were restated for all periods presented to reflect the discontinuation of the semiconductor cryogenics business, in accordance with FASB ASC 205. The discussion in the notes to these Consolidated Financial Statements, unless otherwise noted, relate solely to the Company's continuing operations. Please refer to Note 3, “Discontinued Operations” for further information.

On July 1, 2019, the Company completed the sale of the semiconductor cryogenics business. Results related to the semiconductor cryogenics business are included within discontinued operations. Please refer to Note 3, “Discontinued Operations” for ~~$661.1 million,~~further information.

Separation

On May 10, 2021, the Company announced its intention to separate its business into two independent, publicly traded companies. The Company plans to spin-off its semiconductor business, which ~~excludes $6.3 million retained by Edwards at closing~~operates as the Semiconductor Solutions Group segment through a ~~result~~pro rata distribution of shares to the Company’s common stockholders. Completion of the ~~initial net working capital adjustments. Net cash proceeds from the sale were $553.1 million, after deducting estimated taxes payable and closing costs, which remains~~proposed spin-off is subject to ~~adjustment for~~certain conditions, including final approval by the ~~final determination~~Company’s Board of ~~working capital and other items.~~Directors. The Company is targeting to complete the separation of the business before the end of calendar year 2021.

Risks and Uncertainties

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

During the COVID-19 pandemic, the Company’s facilities have remained operational with only required personnel on site, and the balance of employees working from home. ~~Both~~The Company’s semiconductor and life sciences business segments fall within the classification of an “Essential Critical Infrastructure Sector” as defined by the U.S. Department of Homeland Security and have continued operations during the COVID-19 pandemic. The Company has followed ~~government guidance in each region and has implemented Centers for Disease Control social distancing guidelines and other best practices to protect the health and~~

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government guidance in each region and country and has implemented U.S. Centers for Disease Control and Prevention social distancing guidelines and other applicable best practices to protect the health and safety of the Company’s employees. The COVID-19 pandemic has not had a substantial negative impact on ~~our~~the Company’s financial results and a portion of ~~this~~the impact has been mitigated by ~~our~~the Company’s realignment of resources to satisfy incremental orders related to virus research. ~~Future~~As states safely reopen the economy, get people back to work, and ease social restrictions while minimizing the health impacts of COVID-19, future impacts on the Company’s financial results will depend on ~~multiple variables~~future variants of the virus and vaccine effectiveness against the variants, which are not fully determinable, as the full impact of the pandemic on the economy and markets which the Company serves is as yet unknown. The Company’s financial results will also depend on variables ~~are many, but fundamentally include~~including reduced demand from ~~the Company’s~~its customers, the degree that the supply chain may be constrained towhich could impact ~~the Company’s~~its delivery of product and the potential impact to ~~our~~its operations if there is a significant outbreak among ~~our~~the Company’s employees, as well as the amount of incremental demand caused by research and treatments in the areas of COVID-19 or related threats.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of unaudited consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates are associated with recording accounts receivable, inventories, goodwill, intangible assets other than goodwill, long-lived assets, derivative financial instruments, deferred income taxes, warranty obligations, revenue recognized in accordance with the percentage of completion method, and stock-based compensation expense. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections that management believes to be reasonable under the circumstances. Although the Company regularly assesses these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they occur and become known.

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, - including results of operations and financial condition, sales, expenses, reserves and allowances, manufacturing and employee-related amounts, - will depend on future developments that are highly uncertain. This includes results from new information that may emerge concerning COVID-19 and any actions taken to contain or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. The Company has made estimates of the impact of COVID-19 within its financial statements and there may be changes to those estimates in future periods.

Foreign Currency Translation

Certain transactions of the Company and its subsidiaries are denominated in currencies other than their functional currency.

Foreign currency exchange gains and losses generated from the settlement and remeasurement of these transactions are recognized in earnings and presented within “Other ~~expenses,~~income (expenses), net” in the Company’s unaudited Consolidated Statements of Operations. Net foreign currency transaction and remeasurement losses were $1.6 million and less than $0.1 million ~~and $0.5 million, respectively,~~ during the three months ended June 30, 2021 and 2020, respectively. Net foreign currency transaction and ~~2019~~remeasurement losses were $1.2 million and $2.8 million ~~and $1.1 million, respectively,~~ during the nine months ended June 30, 2021 and 2020, ~~and 2019.~~respectively.

Derivative Financial Instruments

The Company has transactions and balances denominated in currencies other than U.S. dollars. Most of these transactions or balances are denominated in Euros, British Pounds and a variety of Asian currencies. The Company enters into foreign exchange contracts to reduce its exposure to currency fluctuations. The arrangements typically mature in three months or less and they do not qualify for hedge accounting. Net gains and losses related to these contracts are

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recorded as a component of "Other ~~expenses,~~income (expenses), net" in the accompanying unaudited Consolidated Statements of Operations and are as follows for the three and nine months ended June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands):


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Realized (losses) gains on derivatives not designated as hedging instruments	$	(1,719)	$	3,770	$	(963)	$	2,916
Realized losses on derivatives not designated as hedging instruments									$	(961)	$	(1,719)	$	(7,295)	$	(963)

The fair values of the forward contracts are recorded in the ~~Company’s~~ accompanying unaudited Consolidated Balance Sheets as “Prepaid expenses and other current assets” and “Accrued expenses and other current liabilities”. Foreign exchange contract assets and liabilities are measured and reported at fair value based on observable market inputs and classified within Level 2 of the fair value hierarchy described below due to a lack of an active market for these contracts.

Fair Value Measurements

The Company measures ~~at fair value~~ certain financial assets and liabilities, including cash equivalents and available for sale ~~securities.~~securities, at fair value. FASB ASC 820, Fair Value Measurement and Disclosures, establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following levels of inputs may be used to measure fair value:

Level 1 Inputs: Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 Inputs: Observable inputs other than prices included in Level 1, including quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 Inputs: Unobservable inputs that are significant to the fair value of the assets or liabilities and reflect an entity’s own assumptions in pricing assets or liabilities since they are supported by little or no market activity.

As of June 30, ~~2020,~~2021, the Company had 0 assets or liabilities measured and recorded at fair value on a recurring basis using Level 3 inputs.

Accounts Receivable, Allowance for Expected Credit Losses and Sales Returns

Trade accounts receivable do not bear interest and are recorded at the invoiced amount. The Company maintains an allowance for expected credit losses representing its best estimate of expected credit losses related to its existing accounts receivable and their net realizable value. The Company determines the allowance based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends, historical experience and other information over the payment periods. The Company reviews and adjusts the allowance for expected credit losses on a quarterly basis. Accounts receivable balances are written off against the allowance for expected credit losses when the Company determines that the balances are not recoverable. Provisions for expected credit losses are recorded in “Selling, general and administrative” expenses in the Consolidated Statements of Operations. The Company determines the allowance for sales returns based on its best estimate of expected customer returns. Provisions for sales returns are recorded in "Revenue" in the Consolidated Statements of Operations. The Company does not have any off-balance-sheet credit exposure related to its customers.

Leases

The Company has operating leases for real estate and non-real estate and finance leases for non-real estate. The classification of a lease as operating or finance and the determination of the right-of-use asset ~~(ROU asset)~~(“ROU asset”) and lease liability are determined at lease inception. The ROU asset represents the Company’s right to use an underlying asset for the lease term and the lease liability represents the Company’s obligation to make lease payments arising from the lease.

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Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, an incremental borrowing rate is used based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term.

The Company’s lease agreements may contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. Fixed payments for non-lease components are combined with lease payments and accounted for as a single lease component which increases the amount of the ROU asset and liability.

The ROU asset for operating leases is included within ~~Other assets~~“Other assets” and the ROU asset for finance leases is included within ~~Property,~~“Property, plant, and equipment, ~~net on~~net” in the accompanying unaudited Consolidated Balance Sheets. The short-term lease liabilities for both

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operating leases and finance leases are included within ~~Accrued~~“Accrued expenses and other current ~~liabilities.~~liabilities” in the accompanying unaudited Consolidated Balance Sheets. The long-term lease liabilities for operating leases and finance leases are included within ~~Long-term~~“Long-term operating lease ~~liabilities,~~liabilities”, and ~~Other~~“Other long-term ~~liabilities,~~liabilities”, respectively, onin the accompanying unaudited Consolidated Balance Sheets.

Recently Issued Accounting Pronouncements

In ~~March~~October 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-10, Codification Improvements. The amendments in this ASU represent changes to clarify the ASCs, correct unintended application of guidance, or make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. ASU 2020-10 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied retrospectively. This ASU will not affect the Company's consolidated financial statements. The Company will adopt the provisions of this ASU in the first quarter of fiscal 2022 and is currently evaluating the impact this guidance may have on the disclosure to the consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU2021-01, Reference Rate Reform (Topic 848): Scope. The ~~ASU provides~~amendments provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The provisions of ~~this ASU~~the amendments are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU ~~2019-12:~~ 2019-12, Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 clarifying and amending existing guidance. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2020. Early adoption is permitted. The Company ~~is evaluating~~will adopt the ~~impact~~provisions of this ~~ASU.~~

~~In August 2018,~~ASU in the ~~FASB issued ASU 2018-15,~~ ~~Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract~~. The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service elementfirst quarter of a hosting arrangement that is a service contract is not affected by these amendments. The provisions may be adopted prospectively or retrospectively. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted.fiscal 2022. The Company is currently evaluating the impact of this ~~ASU.~~guidance may have on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-14, Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The amendments require additional disclosure for the weighted-average interest crediting rates, a narrative description of the reasons for significant gains and losses, and an explanation of any other significant changes in the benefit obligation or plan assets. The amendment removes disclosure ~~requirement~~requirements for accumulated other comprehensive income expected to be recognized over the next year, information about plan assets to be returned to the entity, and the effects of a one-percentage-point change on the assumed health care costs and the effect of this change in rates on service cost, interest cost, and the benefit obligation for postretirement

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health care benefits. The ASU is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The ASU does not amend the interim disclosure requirements of ASC 715-20. The Company will adopt the provisions of this ASU in the first quarter of fiscal 2022 and is currently evaluating the impact of this ~~ASU.~~

~~In August 2018,~~guidance may have on the ~~FASB issued ASU 2018-13,~~ ~~Fair Value Measurement (Topic 820): Disclosure Framework - Changes to~~disclosures in the ~~Disclosure Requirements for Fair Value Measurement~~, which amends ASC 820 to add and remove disclosure requirements related to fair value measurement. The amendments include new disclosure requirements for changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The amendments eliminated disclosure requirements for amount of and reasons for transfers between Level 1 and Level 2, valuation processes for Level 3 fair value measurements, and policy for timing of transfers between levels of the fair value hierarchy. In addition, the amendments modified certain disclosure requirement to provide clarification or to promote appropriate exercise of discretion by entities. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted. The Company is currently evaluating the impact of this ASU.consolidated financial statements.

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~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments~~~~. The FASB subsequently issued ASU 2019-04,~~ ~~Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments~~~~, ASU 2019-05~~ ~~“Financial Instruments-Credit Losses”~~~~, ASU 2019-11,~~ ~~Codification Improvements to Topic 326, Financial Instruments - Credit Losses, and~~ ~~ASU 2020-02~~,~~Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842)~~ to clarify and address certain items related to the amendments in ASU 2016-13. Topic 326 provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of this ASU.

Recently Adopted Accounting Pronouncements

In ~~July 2019, the FASB issued ASU 2019-07,~~ Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization and Miscellaneous Updates (SEC Update). ASU 2019-07 aligns the guidance in various SEC sections of the Codification with the requirements of certain SEC final rules. ASU 2019 -07 was effective immediately during the Company’s last quarter of fiscal 2019 and the adoption did not have any impact on the Company’s consolidated financial statements and related disclosures.

~~In March~~August 2018, the FASB issued ASU ~~2018-02,~~ 2018-13, ~~Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC ~~220~~820 to add ~~remove,~~ and ~~clarify~~remove disclosure requirements related to ~~reporting comprehensive income. This ASU gives entities the option to reclassify tax effects recorded~~fair value measurement. The amendments include new disclosure requirements for changes in ~~accumulated~~unrealized gains or losses included in other comprehensive income ~~as a result~~for recurring Level 3 fair value measurements held at the end of ~~tax reform~~the reporting period and the range and weighted average used to ~~retained earnings.~~develop significant unobservable inputs for Level 3 fair value measurements. The ~~entities have~~amendments eliminated disclosure requirements for amount of and reasons for transfers between Level 1 and Level 2, valuation processes for Level 3 fair value measurements, and policy for timing of transfers between levels of the ~~option~~fair value hierarchy. In addition, the amendments modified certain disclosure requirements to ~~apply the guidance retrospectively~~provide clarification or ~~in the period~~to promote appropriate exercise of ~~adoption. The guidance requires entities to make new disclosures, regardless of whether they elect to reclassify tax effects. The guidance~~discretion by entities. ASU 2018-13 is effective for fiscal years beginning after December 15, ~~2018, and~~2019, including interim periods ~~within those fiscal years. Early adoption in any period is permitted.~~therein. The Company adopted the guidance during the first quarter of fiscal year ~~2020.~~2021. There is no significant accounting impact on the Company’s consolidated financial statements and related disclosures ~~because the Company does not have stranded tax effects in accumulated other comprehensive income~~ as a result of the ~~Tax Cuts~~adoption of this ASU.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and ~~Jobs Act.~~Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. The provisions may be adopted prospectively or retrospectively. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The Company adopted the guidance during the first quarter of fiscal year 2021 on a prospective basis. There is no significant accounting impact on the Company’s consolidated financial statements and related disclosures as a result of the adoption of this ASU.

In ~~February~~June 2016, the FASB issued ASU ~~2016-02,~~ 2016-13, ~~Leases~~Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued ASU 2019-04, (Codification Improvements to Topic ~~842)~~326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, ASU 2019-05 “Financial Instruments-Credit Losses”, ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, andASU 2020-02,Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) to clarify and address certain items related to the amendments in ASU 2016-13. Topic 326 provides guidance for recognizing credit losses on financial instruments based on an ~~amendment~~estimate of ~~the FASB ASC 840. Under Topic 842, lessees~~current expected credit losses model. The amendments are ~~required to recognize a ROU asset~~effective for fiscal years, and lease liability on the balance sheet for all leases with terms beyond twelve months. The new standard also requires enhanced disclosures that provide more transparent information to financial statement users about lease portfolios.interim periods within those years, beginning after December 15, 2019. The Company adopted ~~Topic 842 effective October 1, 2019 using~~ the guidance during the first quarter of fiscal year ~~modified retrospective~~2021 ~~approach. The Company applied Topic 842 to all its leases~~. There is no significant accounting impact on the Company’s consolidated financial statements and related disclosures as a result of ~~October 1, 2019 with comparative prior periods continuing to be reported under Topic 840. With~~ the adoption of Topic 842, the Company assumed the assessment determined under Topic 840 of whether contracts contain leases, the classification of leases as operating or finance and the remaining lease term of each lease. Certain leases contain both lease and non-lease components, which the Company has elected to treat as a single lease component. On October 1, 2019, the Company recorded a ROU asset related to its operating leases of $28.1 million and a lease liability related to its operating leases of $27.1 million on its Consolidated Balance Sheets. There was no impact to the Company’s finance ROU asset and liability on October 1, 2019. The adoption of the standard does not impact the Consolidated Results of Operations or Consolidated Statement of Cash Flows. See Note 9, “Leases” for further information.this ASU.

Other

For further information with regard to the Company’s significant accounting policies, please refer to Note 2 ~~"Summary~~“Summary of Significant Accounting ~~Policies"~~Policies” to the Company’s consolidated financial statements included in the ~~2019~~2020 Annual Report on Form 10-K.

3. Discontinued Operations

On August 27, 2018, the Company entered into a definitive agreement to sell its semiconductor cryogenics business to Edwards for $675.0 million in cash, subject to adjustments. OnThe sale closed on July 1, ~~2019, the~~2019. The Company completed the sale for $659.8 million. Net proceeds from the sale were approximately $551.7 million, net of taxes and closing costs paid and remaining estimated taxes payable. During the first quarter of fiscal year 2021, the final net working capital was

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~~semiconductor cryogenics business for $661.1~~determined and resulted in a negative adjustment in the amount of $1.8 million payable to Edwards, which ~~excludes $6.3 million retained by Edwards at closing based on~~was paid during the ~~initial adjustment for net working capital. Net proceeds from~~second quarter of the ~~sale were approximately $553.1 million, after deducting estimated taxes payable and closing costs, which remains subject to adjustment for the final determination of working capital and other items.~~ 2021 fiscal year.

In the third quarter of fiscal year 2020, Edwards ~~has~~ asserted claims for indemnification under the definitive agreement relating to alleged breaches of representations and warranties relating to customer warranty claims and inventory.The Company cannot determine the probability of any losses or outcome of these claims including the amount of any indemnifiable losses, if any, resulting from these claims at this ~~time, however, the~~time. The Company believes, however, that none of these claims will have a material adverse effect on its consolidated financial position or results of operations. If the resolution of these claims results in indemnifiable losses in excess of the applicable indemnification deductibles and indemnification escrow established under the definitive agreement, Edwards would be required to seek recovery under the representation and warranty insurance Edwards obtained in connection with the closing of the transaction. The Company believes that any indemnifiable losses in excess of the applicable deductibles and indemnification escrow established in the definitive agreement would be covered by such insurance. If Edwards is unable to obtain recovery under its insurance, however, it could seek recovery of such indemnifiable losses, if any, directly from the Company.

The semiconductor cryogenics business ~~consists~~consisted of the CTI pump business, Polycold chiller business, the related services business and ~~the Company's~~a 50% share in Ulvac Cryogenics, Inc., a joint venture based in Japan. The semiconductor cryogenics business was originally acquired by the Company in its 2005 merger with Helix Technology Corporation. The operating results of the semiconductor cryogenics business had been included in the Brooks Semiconductor Solutions Group segment before the plan of disposition.

In connection with the closing of the Disposition on July 1, 2019, the Company and Edwards entered into a transition service agreement, a supply agreement, and lease agreements. The transition service agreement outlined the information technology, people, and facility support the ~~Company would provide~~parties provided to ~~Edwards~~each other for athe period ~~up to~~ending 9 months after the transaction closing date. The supply agreement allowed the Company to purchase CTI and Polycold goods at cost from Edwards up to an aggregate amount equal to $1.0 million ~~during~~until the one-year ~~term after~~anniversary of closing of the Disposition. The lease agreements provide facility space in Chelmsford, Massachusetts to Edwards free of charge for three years after the transaction closing date. Edwards ~~will have~~has the option to renew each lease at the then current market rates after the initial three-year lease term has ended. This Disposition iswas consistent with the Company’s long-standing strategy to increase shareholder value by accelerating the growth of its Life Sciences ~~business~~businesses with further acquisitions and strengthening its semiconductor automation business with opportunistic acquisitions.

The Disposition met the "held for sale" criteria and the “discontinued operation” criteria in accordance with FASB ASC 205 as of September 30, 2018. As such, its operating results have been reported as a discontinued operation for all periods presented.

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

Three Months Ended June 30,

Nine Months Ended June 30,




2019

2020

2019

Revenue





Products

$
23,546

$
-
��
$
76,227

Services

10,994

-

33,291

Total revenue

34,540

-

109,518

Cost of revenue

Products

15,451

-

47,148

Services

6,288

-

19,016

Total cost of revenue

21,739

-

66,164

Gross profit

12,801

-

43,354

Operating expenses

Research and development

2,279

-

6,605

Selling, general and administrative

4,808

(171)

17,005

Restructuring charges

24

24

Total operating expenses

7,111

(171)

23,634

Operating income

5,690

171

19,720

Other income (loss), net

418

(410)

985

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

6,108

(239)

20,705

Income tax provision (benefit)

1,610

(57)

4,850

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

4,498

(182)

15,855

Equity in earnings of equity method investment

1,835

-

4,876

Net income (loss)

$
6,333

$
(182)

$
20,731

~~The Company did not record income or loss related to our semiconductor cryogenics business for the three months ended June 30, 2020.~~

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

Three Months Ended

Nine months ended



June 30, 2019

June 30, 2019

Statements of Operations:




Total revenue

$

23,209

$

68,252

Gross profit

9,905

27,134

Operating Income

5,267

14,476

Net income

3,674

9,777

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

Three Months Ended

Nine months ended

June 30, 2019

June 30, 2019

Depreciation and amortization

$

4

$

4

Capital expenditures

87

494

Stock-based compensation

215

635

Earnings of equity method investment

(1,835)

(4,876)


	Three Months Ended June 30,				Nine Months Ended June 30,
	2021		2020		2021		2020
Loss on discontinued operations before income taxes	$	(4)	$	-	$	(1,534)	$	(239)
Net loss from discontinued operations		(4)		-		(1,168)		(182)

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4. Marketable Securities

The Company invests in marketable securities that are classified as available-for-sale and records them at fair value in the ~~Company’s~~accompanying unaudited Consolidated Balance Sheets. Marketable securities reported as current assets represent investments that mature within one year from the balance sheet date. Long-term marketable securities represent investments with maturity dates greater than one year from the balance sheet date. The securities are valued using matrix pricing and benchmarking and classified within Level 2 of the fair value hierarchy because they are not actively traded. Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices.

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Unrealized gains and losses are excluded from earnings and reported as a separate component of ~~accumulated~~“Total other comprehensive income, net of tax” in the accompanying unaudited Consolidated Statement of Comprehensive Income until the security is sold or matures. Gains or losses realized from sales of marketable securities are computed based on the specific identification method and recognized as a component of "Other ~~expenses,~~income (expenses), net" in the accompanying unaudited Consolidated Statements of Operations. ~~There were 0 sales of marketable securities during the three months ended June 30, 2019.~~ During the nine months ended June 30, 2019, the Company sold marketable securities with a fair value and amortized cost of $49.4 million and $49.5 million, respectively, and recognized net losses of $0.1 million. As a result, during this period, the Company collected cash proceeds of $48.9 million from the sale2021, there were insignificant sales of marketable securities and reclassified net unrealized holding losses of $0.1 million from accumulated other comprehensive income into “Other expenses, net” in the accompanying unaudited Consolidated Statements of Operations as a result of these transactions. ~~There were 0 marketable securities sales during the~~ ~~three months~~ ~~ended June 30, 2020.~~ securities. During the nine months ended June 30, 2020, the Company sold marketable securities with a fair value and amortized cost of $2.5 million, and recognized a net gain of less than $0.1 ~~million.~~million in this period. As a result, during ~~this period,~~the nine months ended June 30, 2020, the Company collected cash proceeds of $2.5 million from the sale of marketable securities and reclassified net unrealized holding gains of less than $0.1 million from accumulated other comprehensive income into “Other expenses, net” in the accompanying unaudited Consolidated Statements of Operations as a result of these transactions.

The following is a summary of the amortized cost and the fair value, including accrued interest receivable and unrealized holding gains (losses) on the short-term and long-term marketable securities as of June 30, ~~2020~~2021 and September 30, ~~2019~~2020 (in thousands):


			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized				Amortized		Unrealized		Unrealized
	Cost		Losses		Gains		Fair Value		Cost		Losses		Gains		Fair Value
June 30, 2020:
June 30, 2021:
U.S. Treasury securities and obligations of U.S. government agencies									$	20	$	—	$	—	$	20
Bank certificates of deposits										30		—		—		30
Corporate securities										3,663		—		—		3,663
Municipal securities										25		—		—		25
									$	3,738	$	—	$	—	$	3,738
September 30, 2020:
Bank certificates of deposits	$	101	$	—	$	—	$	101	$	51	$	—	$	—	$	51
Corporate securities		2,939		—		—		2,939		3,101		—		—		3,101
Other debt securities		35		—		—		35		16		—		—		16
	$	3,075	$	—	$	—	$	3,075	$	3,168	$	—	$	—	$	3,168
September 30, 2019:
U.S. Treasury securities and obligations of U.S. government agencies	$	31,863	$	(2)	$	5	$	31,866
Bank certificates of deposits		750		—		—		750
Corporate securities		4,317		—		1		4,318
Other debt securities		35		—		—		35
	$	36,965	$	(2)	$	6	$	36,969

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The fair values of the marketable securities by contractual maturities at June 30, ~~2020~~2021 are presented below (in thousands):


	Fair Value		Fair Value
Due in one year or less	$	136	$	101
Due after one year through five years		—		—
Due after five years through ten years		—		—
Due after ten years		2,939		3,637
Total marketable securities	$	3,075	$	3,738

Expected maturities could differ from contractual maturities because the security issuers may have the right to prepay obligations without prepayment penalties.

The Company reviews the marketable securities for impairment at each reporting period to determine if any of the securities have experienced an other-than-temporary decline in fair value. The Company considers factors, such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer, the Company’s intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of its amortized cost basis. If the Company believes that an other-than-temporary decline in fair value has occurred, it writes down the investment to its fair value and recognizes the credit loss in earnings and the non-credit loss in accumulated other comprehensive income or loss. There was an insignificant amount of securities in an unrealized loss position as of June 30, 2021. There were 0 securities in an unrealized loss position as of ~~June~~September 30, 2020. ~~The aggregate fair value~~

Table of the marketable securities in an unrealized loss position was $12.0 million as of September 30, 2019. Aggregate unrealized losses for these securities were insignificant as of September 30, 2019 and are presented in the table above. The securities in an unrealized loss position as of September 30, 2019 were not considered other-than-temporarily impaired and, as such, the Company did 0t recognize impairment losses during the period then ended. The unrealized losses were attributable to changes in interest rates that impacted the value of the investments.Contents

Cash equivalents of less than $0.1 million ~~and $6.2 million, respectively,~~ at June 30, ~~2020 and September 30, 2019~~2021 consist of money market funds and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. There were 0 cash equivalents classified within Level 1 of the fair value hierarchy as of September 30, 2020. Cash equivalents of ~~$10.0~~$0.1 million as of September 30, ~~2019~~2020, consist primarily of treasury bills and agency bonds and are classified within Level 2 of the fair value hierarchy because they are not actively traded. Cash equivalents from ~~level~~Level 1 and ~~level~~Level 2 are recorded in “Cash and cash equivalents” within the accompanying unaudited Consolidated Balance Sheet.

5. Acquisitions

Acquisitions Completed in Fiscal Year 2021

Precise

On April 29, 2021, the Company acquired Precise Automation Inc. (“Precise”), a leading developer of collaborative robots and automation subsystems headquartered in Fremont, California. The total cash purchase price for the acquisition was approximately $69.6 million, subject to working capital and other adjustments. Precise provides the Company with a product offering and technology portfolio to take advantage of the opportunities in the collaborative robot market.

The allocation of the consideration included $38.9 million of technology, $2.4 million of customer relationships, $32.9 million of goodwill, $6.2 million of deferred tax liabilities, and several other assets and liabilities. The weighted useful life of all the intangible assets acquired is 11 years. The purchase price allocation was based on a preliminary valuation which is subject to further adjustments within the measurement period when additional information becomes available. The Company has included the financial results of the acquired operations in the Brooks Semiconductor Solutions Group segment. The goodwill and intangibles are not tax deductible.

Other Acquisitions

The Company closed an acquisition during the third quarter of fiscal year 2021. The Company has included the financial results of the acquired operations within the Brooks Life Sciences Products segment. The total net of cash purchase price was approximately $19.3 million which includes $9.4 million in contingent consideration based on the acquired business’ performance for the twelve-month period ending December 31, 2021, subject to customary working capital adjustments and other adjustments. The acquisition enhances the breadth and depth of the Company’s offerings and expands its expertise in the Brooks Life Sciences Products segment. The allocation of the consideration included $11.9 million of technology, $4.4 million of goodwill, and several other assets and liabilities. The weighted useful life of all the intangible assets acquired is 12 years. The purchase price allocation was based on a preliminary valuation which is subject to further adjustments within the measurement period when additional information becomes available. The goodwill and intangibles are tax deductible.

On December 3, 2020, the Company acquired Trans-Hit Biomarkers Inc. (“THB”), a worldwide biospecimen procurement service provider based in Montreal Canada. THB has an extensive collection capability for biospecimens and clinical samples through a worldwide partner network of clinical sites and biobanks. The total cash purchase price of the acquisition was approximately $15.1 million, net of cash acquired. The acquisition enhances the breadth and depth of the Company’s offerings and expands its expertise in the Brooks Life Sciences Services segment. The allocation of the consideration included $7.8 million of customer relationships, $9.3 million of goodwill, $2.4 million of deferred tax liabilities, and several other assets and liabilities. The weighted useful life of all intangibles acquired is 11 years. The purchase price allocation was based on a preliminary valuation which is subject to further adjustments within the measurement period when additional information becomes available. The Company has included the financial results of the acquired operations in the Brooks Life Sciences Services segment. The goodwill and intangibles are not tax deductible.

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Acquisition Completed in Fiscal Year 2020

~~Acquisition of~~ RURO ~~Inc.~~

On February 11, 2020, the Company acquired RURO, Inc. (“RURO”), an informatics software company based in Frederick, Maryland. RURO provides cloud-based software solutions to manage laboratory workflow and bio-sample data for a broad range of customers in the biotech, healthcare, and pharmaceutical sectors. The addition of RURO's capabilities and offerings will enable the Company to offer enhanced on-site and off-site management of biological sample inventories as well as integration solutions to its customers for their increasingly distributed workflow. The total cash purchase price of the acquisition ~~was $15.6 million, net of cash acquired.~~

~~The Company recorded the assets acquired and liabilities assumed related to RURO at their fair values as of the acquisition date, from a market participant’s perspective.~~ While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed on the acquisition date, its estimates and assumptions are subject to refinement. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations. ~~The finalization of the assignment of fair values will be~~

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~~completed within one year.~~ ~~The following table presents the preliminary net purchase price and the fair values of the assets and liabilities of RURO (in thousands):~~

Fair Value of

Assets and

Liabilities
Accounts receivable

$
1,220
Prepaid expenses and other current assets

29
Goodwill

11,116
Intangible assets

6,042
Other assets

230
Accounts payable

(15)
Deferred revenue

(1,320)
Accrued compensation and benefits

(344)
Other current liabilities

(91)
Long-term deferred tax liabilities

(1,091)
Long-term operating lease liabilities

(147)
Total purchase price, net of cash acquired

$
15,629

The Company applied variations of the income approach to estimate the fair values of the intangible assets acquired. The identifiable intangible assets include customer relationships (excess earnings method) of $2.9 million with a useful life of 12 years, technology (relief from royalty method) of $2.9 million with a useful live of 9 years and trademarks (relief from royalty method) of $0.2 million with a useful life of 5 years. The intangible assets acquired are amortized over the total weighted average period of 10.6 years using methods that approximate the pattern in which the economic benefits are expected to be realized.

Goodwill of $11.1 million largely reflects the potential synergies and expansion of the Company’s core technologies and offerings in the Life Sciences business. The goodwill from this acquisition is not tax deductible.

The Company reports the results of operations for RURO in the Brooks Life Science segment starting from the acquisition date. The revenues and net income from RURO recognized in the Company's consolidated results of operations were $1.9 million and $0.5 million, respectively, for the three months ended June 30, 2020. The revenues and net income from RURO recognized in the Company's consolidated results of operations were $2.3 million and $0.4 million, respectively, for the period between the acquisition date and June 30, 2020. During three months ended June 30, 2020 and the period between the acquisition date and June 30, 2020, the amortization expense of acquired intangible assets was $0.1 million and $0.2 million, respectively. During three months ended June 30, 2020 and the period between the acquisition date and June 30, 2020, the Company incurred less than $0.1 million and $0.2 million, respectively, in transaction costs, which were recorded in "Selling, general and administrative" expenses within the accompanying unaudited Consolidated Statements of Operations.

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

~~Acquisition Completed in Fiscal Year 2019~~

~~Acquisition of the GENEWIZ Group~~

On November 15, 2018, the Company acquired all the outstanding capital stock of GENEWIZ Group (“GENEWIZ”), a leading global genomics service provider headquartered in South Plainfield, New Jersey. GENEWIZ provides genomics services that enable research scientists to advance their discoveries within the pharmaceutical, academic, biotechnology, agriculture and other markets. It provides gene sequencing and synthesis services for more than 4,000 institutional customers worldwide supported by their global network of laboratories spanning the United States, China, Japan, Germany and the United Kingdom. This transaction has added a new and innovative platform

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~~which further enhances the Company’s core capabilities, and added even more value to samples that are under the Company’s care.~~

~~The total cash purchase price for the acquisition was $442.7 million,~~ net of cash acquired ~~which included~~was $15.2 million after the Company’s agreement with the seller of a net working capital settlement. The Company received $0.5 million in connection with the net working capital settlement ~~of $0.4 million.~~ on April 1, 2021.

The ~~Company used the proceeds~~allocation of the ~~incremental term loan described in Note 8, “Debt” to pay a portion of the purchase price.~~

On the acquisition date, the Company paid $32.3 million to escrow accounts related to the satisfaction of the seller's indemnification obligations with respect to their representations and warranties and other indemnities. The Company also retained an amount equal to $1.5 million as collateral for any adjustment shortfall based on the final merger consideration calculation. During the fiscal year 2019, the final merger consideration was calculated to be $4.0 million less than the merger consideration paid at closing. To satisfy the shortfall, the Company reversed the $1.5 million liability associated with the holdback, received approval from the former shareholders to retain $0.7primarily included $0.6 million of ~~funds the Company received on their behalf, and collected $1.8~~accounts receivable, $2.9 million ~~from the escrow accounts.~~

~~The Company recorded the assets acquired and liabilities assumed related to GENEWIZ at their fair values as~~ of the acquisition date, from a market participant’s perspective. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations. The following table presents the net purchase price and the fair values of the assets and liabilities of GENEWIZ (in thousands):

Fair Value of

Assets and

Liabilities
Accounts receivable

$
28,566
Inventories

4,370
Prepaid expenses and other current assets

11,635
Property, plant and equipment

36,379
Goodwill

235,160
Intangible assets

189,129
Other assets

15,998
Current portion of long-term debt

(3,170)
Accounts payable

(6,522)
Deferred revenue

(67)
Accrued compensation and benefits

(5,145)
Other current liabilities

(10,073)
Long-term debt

(2,482)
Long-term tax reserves

(13,400)
Long-term deferred tax liabilities

(34,993)
Other long-term liabilities

(2,681)
Total purchase price, net of cash acquired

$
442,704

~~The Company applied variations of the income approach to estimate the fair values of the intangible assets acquired. The identifiable intangible assets include~~ customer relationships, ~~(excess earnings method)~~$2.9 million of ~~$125.5~~technology assets, $11.0 million ~~with a useful life~~ of ~~14 years, completed technology (relief from royalty method)~~goodwill, and $2.7 million of $44.5 million with useful lives from 10 to 15 years and trademarks (relief from royalty method) of $19.1 million with a useful life of 13 years. The intangible assets acquired are amortized over the total weighted average period of 13.3 years using methods that approximate the pattern in which the economic benefits are expected to be realized.

~~Goodwill of $235.2 million largely reflects the potential synergies and expansion of the Company’s core technologies and offerings in the Life Sciences business.~~liabilities. The goodwill from this acquisition is reported within the Brooks Life Sciences Services segment and is not tax deductible.

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The revenues and net income from GENEWIZ recognized in the Company's consolidated results of operations were $37.3 million and $0.5 million, respectively, for the three months ended June 30, 2020. The revenues and net loss from GENEWIZ recognized in the Company's consolidated results of operations were $37.1 million and $2.4 million, respectively, for the three months ended June 30, 2019. During the three months ended June 30, 2020, and the comparable reporting period in fiscal year 2019, net income/loss included $5.1 million and $3.3 million, respectively, related to amortization expense of acquired intangible assets. The revenues and net income from GENEWIZ recognized in the Company's consolidated results of operations were $118.3 million and $1.5 million, respectively, for the nine months ended June 30, 2020. The revenues and net income from GENEWIZ recognized in the Company’s consolidated results of operations were $86.3 million and $3.0 million, respectively, during the period from the acquisition date to June 30, 2019. During the nine months ended June 30, 2020 and the comparable reporting period since the acquisition in fiscal year 2019, net income included $15.2 million and $8.2 million, respectively, related to amortization expense of acquired intangible assets. During the three months ended June 30, 2019 and the period from the acquisition date to June 30, 2019, the Company incurred $0.1 million and $6.4 million, respectively, in transaction costs, which were recorded in "Selling, general and administrative" expenses within the accompanying unaudited Consolidated Statements of Operations. During both the three and nine months ended June 30, 2020, the Company incurred less than $0.1 million in transaction costs, which were recorded in "Selling, general and administrative" expenses within the accompanying unaudited Consolidated Statements of Operations.

The following unaudited pro forma information reflects the Company’s consolidated results of operations as if the acquisition had taken place on October 1, 2017. The unaudited pro forma information is not necessarily indicative of the results of operations that the Company would have reported had the transaction actually occurred at the beginning of these periods nor is it necessarily indicative of future results. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, including, but not limited to, anticipated costs savings from synergies or other operational improvements (in thousands). The pro forma amounts in the below table were adjusted to reflect a correction made during the 2019 fiscal year, see the 2019 Annual Report on Form 10-K Note 4, “Acquisitions” for further information.

Three Months Ended

Nine Months Ended

June 30, 2019

June 30, 2019

Revenue

$
203,880

$
598,291

Net income from continuing operations

976

5,062

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

To present the Company’s consolidated results of operations as if the acquisition had taken place on October 1, 2017, the unaudited pro forma earnings for the three months ended June 30, 2019 has been adjusted to exclude $0.1 million non-recurring transaction cost. Th~~e unaudited~~ ~~pro forma earnings for the nine months ended June 30, 2019 has been adjusted~~ to include $1.6 million property, plant, and equipment, leases, and intangible asset step-up depreciation and amortization expense and $2.0 million interest expense related to financing activities and to exclude $42.3 million non-recurring compensation expenses and transaction costs.

6. Goodwill and Intangible Assets

Goodwill represents the excess of net book value over the estimated fair value of net tangible and identifiable intangible assets of a reporting unit. Goodwill is tested for impairment annually or more often if impairment indicators are present at the reporting unit level. If events occur or circumstances change that would more likely than not reduce fair values of the reporting units below their carrying values, goodwill will be evaluated for impairment between annual tests. No triggering events indicating goodwill impairment occurred during the nine months ended June 30, ~~2020.~~2021. Please refer to Note 7,8, "Goodwill and Intangible Assets" to the Company's consolidated financial statements included in the

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~~2019~~ 2020 Annual Report on Form 10-K for further information on the goodwill impairment testing performed during fiscal year ~~2019.~~2020.

The Company performs its annual goodwill impairment assessment on April 1st of each year. In accordance with ASC 350, Intangibles-Goodwill and Other, the Company initially assesses qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company determines, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying value, it performs a quantitative goodwill impairment test by comparing the reporting unit’s fair value with its carrying value. An impairment loss is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. No impairment loss is recognized if the fair value of the reporting exceeds its carrying value.

During the quarter ended June 30, ~~2020,~~2021, the Company completed the annual goodwill impairment test for each of its 6 reporting units, including the Automation Solutions, Contamination Control Solutions and Global Semiconductor Services reporting units within the Brooks Semiconductor Solutions Group segment, ~~as well as Sample Repository Solutions,~~the Brooks Life Sciences Products ~~and GENEWIZ~~reporting unit within the Brooks Life Sciences Products segment, and the Sample Repository Solutions and GENEWIZ reporting units within the Brooks Life Sciences Services segment. Based on the test results, the Company determined that 0 adjustment to goodwill was necessary. The Company conducted a qualitative assessment for the 3Automation Solutions, Global Semiconductor Services and Life Sciences Products reporting ~~units within the Brooks Semiconductor Solutions Group segment and~~units. The Company determined that it was more likely than not that their fair values were greater than their carrying values. As a result of the analysis, the Company did not perform the quantitative assessment for these reporting units, and therefore, did not recognize any impairment losses. The Company performed the quantitative goodwill impairment test for the 3Contamination Control Solutions, the Sample Repository Solutions and GENEWIZ reporting ~~units within the Brooks Life Sciences segment and~~units. The Company determined that 0 adjustment to goodwill was necessary since the estimated fair values exceed their book values.

~~The changes~~As a result of a change in our management reporting structure and immediately post to the ~~Company’s~~annual goodwill ~~by reportable segment at June 30, 2020 and September 30, 2019 are as follows (in thousands):~~

Brooks






Semiconductor

Solutions

Brooks

Group

Life Sciences

Other

Total
Gross goodwill, at September 30, 2019

$
636,791

$
440,755

$
26,014

$
1,103,560
Accumulated goodwill impairments

(588,944)

—

(26,014)

(614,958)
Goodwill, net of accumulated impairments, at September 30, 2019

47,847

440,755

—

488,602
Acquisitions and adjustments

316

11,144

—

11,460
Gross goodwill, at June 30, 2020

637,107

451,899

26,014

1,115,020
Accumulated goodwill impairments

(588,944)

—

(26,014)

(614,958)
Goodwill, net of accumulated impairments, at June 30, 2020

$
48,163

$
451,899

$
—

$
500,062

~~During the nine months ended June 30, 2020,~~impairment test, the Company ~~recorded a goodwill increase of $11.5 million primarily related to~~combined two components within the ~~RURO acquisition~~Brooks Life Sciences Services operating segment, Sample Repository Solutions and GENEWIZ components, into the ~~impact of foreign currency translation adjustments.~~Brooks Life Sciences Services reporting unit. The Company evaluated the aggregation criteria under ASC 350 for the two components and concluded that they exhibit

2016

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similar economic characteristics and meet the aggregation criteria. Post to this aggregation, the Company has five reporting units which includes the Automation Solutions, Contamination Control Solutions, Global Semiconductor Services, Brooks Life Sciences Products, and Brooks Life Sciences Services reporting units.

The changes in the Company’s goodwill by reportable segment since September 30, 2020 are as follows (in thousands):


	Brooks
	Semiconductor		Brooks		Brooks
	Solutions		Life Sciences		Life Sciences
	Group		Products		Services		Other		Total
Gross goodwill, at September 30, 2020	$	637,303	$	103,278	$	349,899	$	26,014	$	1,116,494
Accumulated goodwill impairments		(588,944)		—				(26,014)		(614,958)
Goodwill, net of accumulated impairments, at September 30, 2020		48,359		103,278		349,899		—		501,536
Acquisitions and adjustments		32,911		7,493		9,386		—		49,790
Gross goodwill, at June 30, 2021		670,214		110,771		359,285		26,014		1,166,284
Accumulated goodwill impairments		(588,944)		—				(26,014)		(614,958)
Goodwill, net of accumulated impairments, at June 30, 2021	$	81,270	$	110,771	$	359,285	$	—	$	551,326

During the nine months ended June 30, 2021, the Company recorded a goodwill increase of $49.8 million primarily related to acquisitions made during the nine months ended June 30, 2021 and the impact of foreign currency translation adjustments.

The components of the Company’s identifiable intangible assets as of June 30, ~~2020~~2021 and September 30, ~~2019~~2020 are as follows (in thousands):


	June 30, 2020						September 30, 2019						June 30, 2021						September 30, 2020
			Accumulated		Net Book				Accumulated		Net Book				Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value		Cost		Amortization		Value		Cost		Amortization		Value
Patents	$	8,251	$	5,013	$	3,238	$	5,302	$	4,628	$	674	$	5,302	$	5,013	$	289	$	5,302	$	4,865	$	437
Completed technology		88,736		46,504		42,232		88,288		38,778		49,510		144,440		58,118		86,323		92,477		49,875		42,602
Trademarks and trade names		25,604		8,425		17,179		25,340		5,807		19,533		27,625		12,102		15,523		25,769		9,322		16,447
Non-competition agreements														731		129		601		—		—		—
Customer relationships		268,913		104,942		163,971		265,450		84,047		181,403		285,685		133,488		152,197		271,113		112,277		158,836
Other intangibles		236		233		3		231		183		48		251		248		3		245		242		3
	$	391,740	$	165,117	$	226,623	$	384,611	$	133,443	$	251,168	$	464,034	$	209,098	$	254,937	$	394,906	$	176,581	$	218,325

Amortization expense for intangible assets was ~~$31.3~~$30.8 million and ~~$26.2~~$31.3 million, respectively, during the nine months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

Estimated future amortization expense for the intangible assets for the remainder of fiscal year ~~2020,~~2021, the subsequent four fiscal years and thereafter is as follows (in thousands):


Fiscal year ended September 30,
2020	$	10,454
2021		38,714	$	10,853
2022		35,459		40,414
2023		32,170		37,125
2024		27,211		32,242
2025				26,937
Thereafter		82,615		107,366
	$	226,623	$	254,937

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7. Line of Credit

The Company maintains a revolving line of credit under a credit agreement with Wells Fargo Bank, N.A. and JPMorgan Chase Bank, N.A. that provides for a revolving credit facility of up to $75.0 million, subject to borrowing base availability, as defined in the credit agreement. The line of credit matures on October 4, 2022 and expires no less than 90 days prior to the term loan ~~expiration.~~expiration discussed below. The proceeds from the line of credit are available for permitted acquisitions and general corporate purposes.

On October 4, 2017, the Company entered into a $200.0 million Senior Secured Term Loan Facility (the “term loan”) with Morgan Stanley Senior Funding, Inc., JPMorgan Chase Bank, N.A. and Wells Fargo Securities, LLC (collectively, the “lenders”). Coincident with the entry into the credit agreement for the term loan discussed in Note 8, “Debt” below, the Company amended certain terms and conditions of the credit ~~agreement.~~agreement for the line of credit. Based on the amended terms of the credit agreement, the line of credit continues to provide for a revolving credit facility of up to $75.0 million, subject to borrowing base availability. Borrowing base availability under the amended credit agreement excludes collateral related to fixed assets and is redetermined periodically based on certain percentage of certain eligible U.S. assets, including accounts receivable and inventory. The sub-limits for letters of credit were reduced to $7.5 million under the amended terms of the credit agreement. All outstanding borrowings under the credit agreement are guaranteed by the Company and Brooks Life Sciences, Inc. (fka BioStorage Technologies, Inc.), the Company’s wholly-owned subsidiary (“guarantor”), and subordinated to the obligations under the term loan which are secured by a first priority lien on substantially all of the assets of the Company and the guarantor, other than accounts receivable and inventory. Please refer to Note 8, “Debt”, for further information on the term loan transaction.

As of June 30, ~~2020,~~2021, the Company had approximately ~~$39.6~~$49.8 million available for borrowing under the line of credit. There were 0 amounts outstanding under the line of credit as of June 30, ~~2020~~2021 and September 30, ~~2019.~~2020. The Company records commitment fees and other costs directly associated with obtaining the line of credit facility as deferred financing costs which are ~~presented within "Other assets" in~~amortized over the ~~accompanying unaudited Consolidated Balance Sheets.~~

~~Table~~term of ~~Contents~~

the related financing arrangement. Deferred financing costs were ~~$0.3~~$0.2 million and $0.4 million, respectively, at June 30, ~~2020~~2021 and September 30, ~~2019. Such costs are amortized over the term of the related facility arrangement and are included in “Interest expense” in the accompanying unaudited Consolidated Statements of Operations.~~2020. The line of credit contains certain customary representations and warranties, a financial covenant and affirmative and negative covenants as well as events of default. The Company was in compliance with the line of credit covenants as of June 30, ~~2020 and September 30, 2019.~~2021.

8. Debt

Term Loans

On October 4, 2017, the Company entered into a $200.0 million term loan with the lenders pursuant to the terms of a credit agreement. The term loan was issued at $197.6 million, or 98.8% of its par value, resulting in a discount of $2.4 million, or 1.2%, which represented loan origination fees paid at the closing.

On November 15, 2018, the Company entered into an incremental amendment (the “First Amendment”) to the existing credit agreement. Under the First Amendment, the Company obtained an incremental term loan in an aggregate principal amount of $350.0 million. The proceeds of the incremental term loan were used to finance a portion of the purchase price for the Company’s acquisition of ~~GENEWIZ.~~GENEWIZ Group. The incremental term loan was issued at $340.5 million, or 97.3% of its par value, resulting in a discount of $9.5 million, or 2.7%, which represented financing cost of the incremental term loan. Except as provided in the First Amendment, the incremental term loan was subject to the same terms and conditions as set forth in the existing credit agreement.

On February 15, 2019, the Company entered into the second amendment to the credit agreement (the “Second Amendment”) and syndicated the incremental term loan to a group of new lenders which met the criteria of a debt extinguishment. The Company wrote off the carrying value of the incremental term loan of $340.1 million as of February 15, 2019 and recorded the syndicated incremental term loan at its present value for $349.1 million and a loss on debt extinguishment for $9.1 million. The syndicated incremental term loan was issued at $345.2 million, or 98.9% of its par value, resulting in a discount of $4.0 million which represented financing costs which are presented as a reduction of the incremental term loan principal balance in the accompanying unaudited Consolidated Balance Sheets and was accreted over the life of the incremental term loan. Except as provided in the Second Amendment with respect to an

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increase of the applicable interest rates, the syndicated incremental term loan was subject to the same terms and conditions as the initial incremental term loan.

On July 1, 2019, the Company completed the sale of its semiconductor cryogenics business and used $348.3 million of the proceeds from the Disposition to extinguish the outstanding balance of the incremental term loan. In addition, the Company used $147.0 million of the proceeds from the Disposition to extinguish a portion of the outstanding balance of the term loan. The Company recorded a loss on debt extinguishment of $5.2 million for the 2 term loans.

The Company’s obligations under the term loan are also guaranteed by Brooks Life Sciences, Inc. (fka BioStorage Technologies, Inc.) as the guarantor, subject to the terms and conditions of the credit agreement. The Company and the guarantor granted the lenders a perfected first priority security interest in substantially all of the assets of the Company and the guarantor to secure the repayment of the term loan.

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

Subject to certain conditions stated in the credit agreement, the Company may redeem the term loan at any time at its option without a significant premium or penalty, except for a repricing transaction, as defined in the credit agreement. The Company is required to redeem the term loan at the principal amount then outstanding upon occurrence of certain events, including (i) net proceeds received from the sale or other disposition of the Company’s or the ~~guarantor’~~guarantor’s assets, subject to certain limitations, (ii) casualty and condemnation proceeds received by the Company or the guarantor, subject to certain exceptions, or (iii) net proceeds received by the Company or the guarantor from the issuance of debt or disqualified capital stock after October 4, 2017. Commencing on December 31, 2018, the Company was required to

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make principal payments equal to the excess cash flow amount, as defined in the credit agreement. Such prepayments are equal to 50% of the preceding year excess cash flow amount reduced by voluntary prepayments of the term loan, subject to certain limitations.

The deferred financing costs are accreted over the term of the loan using the effective interest rate method and are included in “Interest expense” in the accompanying unaudited Consolidated Statements of Operations. At June 30, ~~2020,~~2021, deferred financing costs were ~~$0.4~~$0.3 million.

The credit agreement contains certain customary representations and warranties, covenants and events of default. If any of the events of default occur and are not waived or cured within applicable grace periods, any unpaid amounts under the credit agreement will bear an annual interest rate at 2.00% above the rate otherwise applicable under the terms and conditions of such agreement. The credit agreement does not contain financial maintenance covenants. As of June 30, ~~2020,~~2021, the Company was in compliance with all covenants and conditions under the credit agreement.

In connection with the GENEWIZ acquisition, the Company assumed 3 five-year term loans for a total of $3.3 million and 2 one-year short term loans for a total of $3.2 million. The 3 five-year term loans were initiated during 2016 and ~~mature~~matured in 2021. The principal payments ~~are~~were payable in 8 installments equal to 12.5% of the initial principal amount of the term loans on December 14th and June 14th of each year. The 3 five-year term loans were secured by GENEWIZ to fund equipment procurement and new building related payments and the interest rates ~~are~~were equal to the LIBOR plus 3.1%. The 2 one-year term loans were secured by GENEWIZ to fund operations. Both of the one-year term loans were initiated in 2018 and matured and were repaid in 2019. The interest rates of these 2 loans were 4.56% and 4.35%. There are 0 deferred financing costs related to either the five-year term loans or the one-year term loans. ~~At June 30, 2020, the Company had an aggregate outstanding principal balance of $0.8 million for the~~The 3 five-year ~~term loans. Both of the~~ ~~2 one-year short~~ term loans matured and were repaid in full ~~as of September~~on June 30, ~~2019.~~2021.

During the nine months ended June 30, ~~2020,~~2021, the weighted average stated interest rate paid on all outstanding debt was ~~4.3%~~2.8%. During the nine months ended June 30, ~~2020,~~2021, the Company incurred aggregate interest expense of ~~$1.8~~$1.3 million in connection with the borrowings, including $0.2 million of deferred financing costs amortization.

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The following are the future minimum principal payment obligations under all of the Company’s outstanding debt as of June 30, ~~2020~~2021 (in thousands):


	Amount		Amount
Fiscal year ended September 30,
2020	$	828
2021		—	$	—
2022		—		—
2023		—		—
2024		—		—
Thereafter		50,000
2025				50,000
Total outstanding principal balance		50,828		50,000
Unamortized deferred financing costs		(437)		(349)
		50,391		49,651
Current portion of long-term debt		828		—
Non-current portion of long-term debt	$	49,563	$	49,651

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9. Leases

The Company has operating leases for real estate and non-real estate and finance leases for non-real estate in North America, Europe, and Asia. Non-real estate leases are primarily related to vehicles and office equipment. Lease expiration dates range between ~~2020~~2021 and ~~2039.~~2041.

The components of ~~operating~~ lease expense were as follows (in thousands):


					Three Months Ended June 30,				Nine Months Ended June 30,
	Three months ended June 30, 2020		Nine Months Ended June 30, 2020		2021		2020		2021		2020

Operating lease costs	$	2,358	$	6,755	$	2,878	$	2,358	$	8,135	$	6,755
Finance lease costs:
Amortization of assets		311		933		182		311		745		933
Interest on lease liabilities		29		84		10		29		31		84
Total finance lease costs		340		1,017		192		340		776		1,017
Variable lease costs		448		1,314		514		448		1,578		1,314
Short-term lease costs		181		477		123		181		349		477
Total lease costs	$	3,327	$	9,563	$	3,707	$	3,327	$	10,838	$	9,563

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

As of June 30, 2020

Operating Leases:

Operating lease right-of-use assets
$
36,224

Accrued expenses and other current liabilities
$
6,457

Long-term operating lease liabilities

29,280

Total operating lease liabilities
$
35,737

Finance Leases:

Property, plant and equipment, at cost
$
2,540

Accumulated amortization

(934)

Property, plant and equipment, net
$
1,606

Accrued expenses and other current liabilities
$
1,183

Other long-term liabilities

599

Total finance lease liabilities
$
1,782

Weighted average remaining lease term (in years):

Operating leases

8.83

Finance leases

1.55

Weighted average discount rate:

Operating leases

4.29
%
Finance leases

4.72
%

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

Three months ended June 30, 2020

Nine Months Ended June 30, 2020
Cash paid for amounts included in measurement of liabilities:

Operating cash flows from operating leases
$
2,215

$
6,089
Operating cash flows from finance leases

22

77
Financing cash flows from finance leases

297

880


	June 30, 2021			September 30, 2020
Operating Leases:
Operating lease right-of-use assets	$	52,159		$	39,071

Accrued expenses and other current liabilities	$	7,489		$	7,015
Long-term operating lease liabilities		45,034			31,855
Total operating lease liabilities	$	52,523		$	38,870

Finance Leases:
Property, plant and equipment, at cost	$	2,252		$	2,540
Accumulated amortization		(1,989)			(1,246)
Property, plant and equipment, net	$	263		$	1,294

Accrued expenses and other current liabilities	$	610		$	1,135
Other long-term liabilities		(10)			348
Total finance lease liabilities	$	600		$	1,483

Weighted average remaining lease term (in years):
Operating leases		10.73			8.72
Finance leases		0.71			1.32

Weighted average discount rate:
Operating leases		4.02	%		3.92	%
Finance leases		4.81	%		4.73	%

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~~Future lease payments for operating and capital~~Supplemental cash flow information related to leases ~~as of June 30, 2020 were as follows for the remainder of fiscal year 2020, the subsequent four fiscal years and thereafter~~was as follows (in ~~thousands)~~thousands, unaudited):

Operating Leases

Finance Leases
2020
$
2,123

$
322
2021

7,259

1,171
2022

5,491

363
2023

4,445

-
2024

4,229

-
Thereafter

20,180

-
Total future lease payments

43,727

1,856
Less imputed interest

(7,990)

(74)
Total lease liability balance
$
35,737

$
1,782


	Three Months Ended June 30,				Nine Months Ended June 30,
	2021		2020		2021		2020
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	2,532	$	2,215	$	7,530	$	6,089
Operating cash flows from finance leases		8		22		35		77
Financing cash flows from finance leases		269		297		881		880

ROU assets obtained in exchange for lease liabilities:
Operating leases	$	14,066	$	3,026	$	19,033	$	13,753

Future lease payments for operating and finance leases as of ~~September~~June 30, ~~2019~~2021 were as follows for the remainder of fiscal year ~~2020,~~2021, the subsequent four fiscal years and thereafter ~~as follows~~ (in thousands):


	Operating Leases		Capital Leases		Operating Leases		Finance Leases
2020	$	6,794	$	1,276
Fiscal year ended September 30,
2021		5,520		1,171	$	2,501	$	251
2022		3,904		363		9,032		363
2023		3,110		-		7,286		-
2024		2,934		-		6,378		-
2025						5,779		-
Thereafter		10,499		-		34,475		-
Total future lease payments		32,761		2,810		65,451		614
Less imputed interest		(5,685)		(150)		(12,928)		(14)
Total lease liability balance	$	27,076	$	2,660	$	52,523	$	600

As of June 30, ~~2020,~~ 2021, the Company has entered into leases that have not commenced with future lease payments of ~~$3.8~~$15.1 ~~million, excluding purchase options.~~million. These leases are not yet recorded onin the accompanying unaudited Consolidated Balance Sheets. ~~Lease commencement dates for these~~These leases ~~range between 2020 and 2030.~~will commence in 2021.

10. Income Taxes

The Company recorded an income tax provision of $9.4 million and $20.4 million, respectively, during the three and nine months ended June 30, 2021. The tax provision for the three months ended June 30, 2021 was primarily driven by the provision on earnings from operations during the period. The provision was partially offset by a $1.5 million benefit from the reversal of uncertain tax positions during the period. The provision for the nine months ended June 30, 2021 was primarily driven by the provision on earnings from operations during the period and was partially offset by a $2.7 million discrete stock compensation windfall benefit for tax deductions that exceeded the associated book compensation expense.

The Company recorded an income tax provision of $5.1 million and $5.6 million, respectively, during the three and nine months ended June 30, 2020. The tax ~~expense~~provision for the three months ended June 30, 2020 was primarily driven by the provision on earnings from operations during the period. The tax provision for the nine months ended June 30, 2020 was primarily driven by the provision on earnings from operations during the ~~period, which~~period. The tax provision was offset by a $6.1 million discrete stock compensation windfall benefit for tax deductions that exceeded the associated compensation expense in ~~prior quarters and~~the period. During the nine months ended June 30, 2020, the Company also recorded a discrete benefit of $0.5 million from a reduction of deferred tax liabilities related to the extension of a tax rate incentive in China.

The Company recorded an income tax expense of $7.3 million and $0.4 million, respectively, during the three and nine months ended June 30, 2019. The tax expense for the three months ended June 30, 2019 was primarily driven by a $4.3 million discrete expense resulting from a change to the U.S. tax regulations issued during the quarter related to the transition tax and the provision on current earnings. This expense was partially offset by a discrete benefit for stock compensation windfalls of $0.4 million for tax deductions that exceeded the associated compensation expense, and a $0.3 million reversal of an unrecognized tax benefit upon the closing of an audit. The tax expense for the nine months ended June 30, 2019 was primarily driven by a $3.2 million expense upon completion of the accounting for the U.S. transition tax and the provision on current earnings. These items were partially offset by discrete benefits related to stock compensation windfalls of $4.5 million for tax deductions that exceeded the associated compensation expense and $1.4 million of tax benefits related to the remeasurement of net U.S. deferred tax assets due to state tax rate changes.

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During 2018, the Internal Revenue Service issued proposed regulations on the federal toll charge and various other aspects of the Tax Cuts and Jobs Act. The Company finalized its analysis of the toll charge and related liabilities, including uncertain tax positions, during the three months ended December 31, 2018 pursuant to SEC Staff Accounting Bulletin No. 118. As a result of the new guidance issued and additional work to complete the calculation of the federal toll charge, the Company reduced the provisional accrual for federal, state and foreign taxes by net $1.1 million during the three months ended December 31, 2018.

During March 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act ~~(“CARES Act”)~~ which contains numerous income tax provisions among other tax and non-tax provisions. Some of these income tax provisions have retroactive effects on years before the date of enactment. During December 2020, the United States enacted the

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Consolidated Appropriations Act 2021 which also contains numerous income tax provisions among other tax and non-tax provisions. During March 2021, the United States enacted the American Rescue Plan Act of 2021. The Company evaluated the ~~CARES Act~~ legislation of all three Acts in relation to income taxes and determined that the ~~CARES Act~~ income tax ~~provisions~~Acts do not have a material impact on its income tax provision.

The Company evaluates the realizability of its deferred tax assets by tax-paying component and assesses the need for a valuation allowance on a quarterly basis. The Company evaluates the profitability of each tax-paying component on a historic cumulative basis and a forward-looking basis while performing this analysis. The Company maintains a U.S. valuation allowance related to the realizability of certain ~~foreign tax credits,~~ state tax credits and state net operating loss carry-forwards, as well as a valuation allowance against net deferred tax assets on certain foreign tax-paying components as of June 30, ~~2020.~~2021.

The Company maintains liabilities for uncertain tax positions. These liabilities involve judgment and estimation and are monitored based on the best information available. The Company recognizes interest related to unrecognized tax benefits as a component of the income tax ~~expense~~provision or benefit. The Company recognized interest expense related to its uncertain tax positions of $0.3 million and ~~$0.9~~$0.8 million, respectively, during the three and nine months ended June 30, ~~2020.~~2021.

The Company is subject to U.S. federal, state, local and ~~international~~foreign income taxes in various jurisdictions. The amount of income taxes paid is subject to the Company’s interpretation of applicable tax laws in the jurisdictions in which it ~~files tax returns.~~ files.

In the normal course of business, the Company is subject to income tax audits in ~~the~~ various global jurisdictions in which it operates. The years subject to examination vary for the U.S. and international jurisdictions, with the earliest tax year being ~~2011.~~2013. Based on the outcome of these examinations or the expiration of statutes of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the Company’s ~~unaudited~~ Consolidated Balance Sheets. The Company currently anticipates that it is reasonably possible that the unrecognized tax benefits and accrued interest on those benefits will be reduced by ~~approximately $1.9~~an amount of $17.2 million ~~within~~in the next ~~twelve months.~~12 months due to statute of limitations expirations. These unrecognized tax benefits would impact the effective tax rate if recognized.

11. Other Balance Sheet Information

The following is a summary of accounts receivable at June 30, ~~2020~~2021 and September 30, ~~2019~~2020 (in thousands):


	June 30,		September 30,		June 30,		September 30,
	2020		2019		2021		2020
Accounts receivable	$	189,059	$	169,317	$	238,890	$	195,587
Less allowance for doubtful accounts		(5,805)		(3,644)
Less allowance for expected credit losses						(4,737)		(7,216)
Less allowance for sales returns		(87)		(71)		(74)		(80)
Accounts receivable, net	$	183,167	$	165,602	$	234,079	$	188,291

The decrease in the allowance for expected credit losses from September 30, 2020 is due to collections of previously reserved trade receivables in the Brooks Life Sciences Services segment during the first quarter of fiscal year 2021.

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


	June 30,		September 30,
	2021		2020
Inventories
Raw materials and purchased parts	$	98,997	$	73,609
Work-in-process		21,356		16,461
Finished goods		34,367		24,764
Total inventories	$	154,720	$	114,834

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~~The following is a summary of inventories at June 30, 2020 and September 30, 2019 (in thousands):~~

June 30,

September 30,


2020

2019

Inventories





Raw materials and purchased parts

$
77,715

$
67,176

Work-in-process

16,307

13,684

Finished goods

23,664

18,585

Total inventories

$
117,686

$
99,445

Reserves for excess and obsolete inventory were ~~$16.7~~$18.6 million and ~~$16.3~~$17.1 million, respectively, at June 30, ~~2020~~2021 and September 30, ~~2019.~~2020.

At June 30, ~~2020~~2021 and September 30, ~~2019,~~2020, the Company had cumulative capitalized direct costs of ~~$16.2~~$21.9 million and ~~$11.6~~$18.2 million, respectively, associated with the development of software for its internal use. As of June 30, ~~2020,~~2021, this balance included ~~$3.8~~$5.0 million associated with software still in the development stage which are included within "Property, plant and equipment, net" in the accompanying unaudited Consolidated Balance Sheets. During the nine months ended June 30, ~~2020,~~2021, the Company capitalized direct costs of ~~$4.6~~$3.7 million associated with the development of software for its internal use.

The Company establishes reserves for estimated costs of product warranties based on historical information. Product warranty reserves are recorded at the time product revenue is recognized, and retrofit accruals are recorded at the time retrofit programs are established. The Company’s warranty obligation is affected by product failure rates, utilization levels, material usage, service delivery costs incurred in correcting a product failure and supplier warranties on parts delivered to the Company.

The following is a summary of product warranty and retrofit activity on a gross basis for the three and nine months ended June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands):

Activity -Three Months Ended June 30, 2020
Balance





Balance
March 31,

June 30,
2020

Accruals

Costs Incurred

2020
$
7,910

$
1,380

$
(1,409)

$
7,881

Activity -Three Months Ended June 30, 2019
Balance





Balance
March 31,

June 30,
2019

Accruals

Costs Incurred

2019
$
7,202

$
2,257

$
(2,269)

$
7,190

Activity -Nine Months Ended June 30, 2020
Balance





Balance
September 30,

June 30,
2019

Accruals

Costs Incurred

2020
$
7,175

$
6,033

$
(5,327)

$
7,881

Activity -Nine Months Ended June 30, 2019
Balance





Balance
September 30,

June 30,
2018

Accruals

Costs Incurred

2019
$
6,340

$
6,419

$
(5,569)

$
7,190


Activity -Three Months Ended June 30, 2021
Balance						Balance
March 31,						June 30,
2021		Accruals		Costs Incurred		2021
$	8,044	$	1,892	$	(1,804)	$	8,132

Activity -Three Months Ended June 30, 2020
Balance						Balance
March 31,						June 30,
2020		Accruals		Costs Incurred		2020
$	7,910	$	1,380	$	(1,409)	$	7,881

Activity -Nine Months Ended June 30, 2021
Balance						Balance
September 30,						June 30,
2020		Accruals		Costs Incurred		2021
$	8,201	$	5,990	$	(6,059)	$	8,132

Activity -Nine Months Ended June 30, 2020
Balance						Balance
September 30,						June 30,
2019		Accruals		Costs Incurred		2020
$	7,175	$	6,033	$	(5,327)	$	7,881

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12. Stock-Based Compensation

The Company may issue to eligible employees options to purchase shares of the Company’s stock, restricted stock and other equity incentives which vest upon the satisfaction of a performance condition and/or a service condition. In addition, the Company issues shares to participating employees pursuant to an employee stock purchase plan, and stock awards ~~restricted stock awards~~ and deferred ~~stock and~~ restricted stock units to its directors in accordance with its director compensation program.

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The following table reflects stock-based compensation expense recorded during the three and nine months ended June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,				Three Months Ended June 30,				Nine Months Ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Restricted stock units	$	3,348	$	4,881	$	11,361	$	13,764	$	5,475	$	3,348	$	18,667	$	11,361
Employee stock purchase plan		377		359		987		773		611		377		1,610		987
Total stock-based compensation expense	$	3,725	$	5,240	$	12,348	$	14,537	$	6,086	$	3,725	$	20,277	$	12,348

The fair value of restricted stock units is determined based on the number of shares granted and the closing price of the Company’s common stock quoted on the Nasdaq Stock Market on the date of grant. For awards that vest based on service conditions, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. For awards that vest subject to performance conditions, the Company recognizes stock-based compensation expense ratably over the performance period if it is probable that performance condition will be met and adjusted for the probability percentage of achieving the performance goals. The Company makes estimates of stock award forfeitures and the number of awards expected to vest. The Company considers many factors in developing forfeiture estimates, including award types, employee classes and historical experience. Each quarter, the Company assesses the probability of achieving the performance goals. Current estimates may differ from actual results and future changes in estimates.

The Company grants restricted stock units that vest over a required service period and/or achievement of certain operating performance goals. Restricted stock units granted with performance goals may also have a required service period following the achievement of all or a portion of the performance goals. The following table reflects restricted stock units, including stock awards, granted during the nine months ended June 30, ~~2020~~2021 and ~~2019:~~2020:


		Time-Based	Stock	Performance-		Time-Based	Stock	Performance-
	Total Units	Units	Grants	Based Units	Total Units	Units	Grants	Based Units
Nine months ended June 30, 2021					346,172	162,842	14,683	168,647
Nine months ended June 30, 2020	411,967	163,390	27,007	221,570	411,967	163,390	27,007	221,570
Nine months ended June 30, 2019	792,103	330,006	38,708	423,389

Time-Based Grants

Restricted stock units granted with a required service period typically have three-year vesting schedules in which one-third of awards vest at the first anniversary of the grant date, one-third vest at the second anniversary of the grant date and one-third vest at the third anniversary of the grant date, subject to the award holders meeting service requirements.

Stock Grants

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

Certain members of the Board of Directors have elected to defer receiving their annual stock awards and related quarterly dividends until they attain a certain age or cease to provide services as the Company’s Board members. ~~Restricted stock~~Stock awards granted in fiscal years ~~2019~~2021 and 2020 were vested as of the respective grant dates.

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Performance-Based Grants

Performance-based restricted stock units are earned based on the achievement of performance criteria established by the Human Resources and Compensation Committee and approved by the Board of Directors. The criteria for performance-based awards are weighted and have threshold, target and maximum performance goals.

Performance-based awards granted in fiscal year 2021, 2020 ~~2019~~ and ~~2018~~2019 allow participants to earn 100% of the restricted stock units if the Company’s performance meets its target goal for each applicable financial metric, and up to a

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maximum of 200% if the Company’s performance for such metrics meets or exceeds the maximum or stretch goal. Performance below the minimum threshold for each financial metric results in award forfeiture. Performance goals will be measured over a three-year period for each year’s awards and at the end of the period to determine the number of units earned by recipients who continue to meet the service requirement. Around the third anniversary of each ~~year~~year’s awards’ grant date, the Company’s Board of Directors determines the number of units earned for participants who continue to meet the service requirements on the vest date.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the nine months ended June 30, ~~2020:~~2021:


		Weighted			Weighted
		Average			Average
		Grant-Date			Grant-Date
	Shares	Fair Value		Shares	Fair Value
Outstanding at September 30, 2019	1,782,726	$	24.63
Outstanding at September 30, 2020				1,183,009	$	36.10
Granted	411,967		46.52	346,172		71.81
Vested	(898,222)		26.03	(406,764)		36.01
Forfeited	(105,410)		34.94	(32,600)		44.27
Outstanding at June 30, 2020	1,191,061		36.08
Outstanding at June 30, 2021				1,089,817		47.23

The weighted average grant date fair value of restricted stock units granted during the three months ended June 30, 2021 and 2020 was $104.54 and ~~2019 was~~ $31.87, ~~and $36.12,~~ respectively. The weighted average grant date fair value of restricted stock units granted during the nine months ended June 30, 2021 and 2020 was $71.81 and ~~2019 was~~ $46.52, ~~and $30.47,~~ respectively. The fair value of restricted stock units vested during the three months ended June 30, 2021 and 2020 ~~and 2019~~ was ~~$0.2~~$0.3 million and ~~$3.4~~$0.2 million, respectively. The fair value of restricted stock units vested during the nine months ended June 30, 2021 and 2020 ~~and 2019~~ was ~~$41.6~~$28.2 million and ~~$34.5~~$41.6 million, respectively. During the nine months ended June 30, ~~2020~~2021 and ~~2019,~~2020, the Company remitted ~~$24.1~~$9.7 million and ~~$15.2~~$24.1 million, respectively, collected from employees to satisfy their tax obligations as a result of share issuances. Such proceeds collected and remitted were insignificant during the three months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

As of June 30, ~~2020,~~2021, the unrecognized compensation cost related to restricted stock units that are expected to vest is ~~$22.9~~$29.1 million and will be recognized over an estimated weighted average service period of approximately 1.7 years.

Employee Stock Purchase Plan

The Company maintains an employee stock purchase plan that allows its employees to purchase shares of common stock at a price equal to 85% of the fair market value of the Company’s stock at the beginning or the end of the semi-annual offering period, whichever is lower. There were ~~63,934~~58,124 and ~~59,549~~63,934 shares, respectively, purchased by employees under the employee stock purchase plan during the nine months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

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13. Earnings per Share

The calculations of basic and diluted net income per share and basic and diluted weighted average shares outstanding are as follows for the three and nine months ended June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands, except per share data):


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Income from continuing operations	$	13,696	$	921	$	36,062	$	4,359	$	39,170	$	13,696	$	90,110	$	36,062
Income (loss) from discontinued operations, net of tax		—		6,333		(182)		20,731
Loss from discontinued operations, net of tax										(4)		—		(1,168)		(182)
Net income	$	13,696	$	7,254	$	35,880	$	25,090	$	39,166	$	13,696	$	88,942	$	35,880

Weighted average common shares outstanding used in computing basic earnings per share		73,759		72,188		73,473		71,903		74,296		73,759		74,195		73,473
Dilutive restricted stock units		101		282		293		410		199		101		225		293
Weighted average common shares outstanding used in computing diluted earnings per share		73,860		72,470		73,766		72,313		74,495		73,860		74,420		73,766

Basic net income per share:
Income from continuing operations	$	0.19	$	0.01	$	0.49	$	0.06	$	0.53	$	0.19	$	1.21	$	0.49
Income (loss) from discontinued operations, net of tax		—		0.09		(0.00)		0.29
Loss from discontinued operations, net of tax										(0.00)		-		(0.02)		(0.00)
Basic net income per share	$	0.19	$	0.10	$	0.49	$	0.35	$	0.53	$	0.19	$	1.20	$	0.49

Diluted net income per share:
Income from continuing operations	$	0.19	$	0.01	$	0.49	$	0.06	$	0.53	$	0.19	$	1.21	$	0.49
Income (loss) from discontinued operations, net of tax		—		0.09		(0.00)		0.29
Loss from discontinued operations, net of tax										(0.00)		—		(0.02)		(0.00)
Diluted net income per share	$	0.19	$	0.10	$	0.49	$	0.35	$	0.53	$	0.19	$	1.20	$	0.49
Dividend declared per share	$	0.10	$	0.10	$	0.30	$	0.30	$	0.10	$	0.10	$	0.30	$	0.30

During the three and nine months ended June 30, 2021, restricted stock units of 13,593 and 18,548, respectively, were excluded from the computation of diluted earnings per share as their effect would be antidilutive based on the treasury stock method. During the three and nine months ended June 30, 2020, ~~antidilutive~~ restricted stock units of 148,085 and 162,189, respectively, were excluded from the computation of diluted earnings per share ~~based on the treasury stock method. During the three and nine months ended June 30, 2019,~~as their effect would be antidilutive ~~restricted stock units of 1,628 and 14,063, respectively, were excluded from the computation of diluted earnings per share~~ based on the treasury stock method.

14. Revenue from Contracts with Customers

Disaggregated Revenue

The Company disaggregates revenue from contracts with customers in a manner that depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. ~~The Company disaggregates revenue based on the transfer of control of the underlying performance obligations, the geographic location in which customer orders are placed and by reporting unit.~~

The Company transfers control of its performance obligations at a point in time or over time, depending on the nature of the product or service being provided. Revenue from contracts with customers is attributed to geographic areas based on locations in which the customer orders are placed. The Company reports financial results for 2has 3 operating and reportable segments ~~which consist~~consisting of Brooks Semiconductor Solutions Group, ~~segment~~Brooks Life Sciences Products and Brooks Life Sciences ~~segment.~~Services. The Company ~~also consists of 6~~has 5 reporting units, including 3 reporting units within the Brooks Semiconductor Solutions Group ~~reportable~~operating segment, 1 reporting unit within Brooks Life Sciences Products operating segment, and 31 reporting units within the Brooks Life Sciences Services

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operating segment. The following is revenue by reporting unit for the three and nine months ended June 30, 2021 and 2020 (in thousands):


	Three months ended June 30,				Nine months ended June 30,
	2021		2020		2021		2020
Reporting Unit
Automation Solutions	$	122,567	$	81,656	$	320,540	$	214,627
Contamination Control Solutions		50,742		34,780		117,236		124,584
Global Semiconductor Services		12,953		10,616		36,898		31,575
Total Brooks Semiconductor Solutions Group		186,262		127,052		474,674		370,786

Brooks Life Sciences Products		48,625		30,421		146,490		91,138

Brooks Life Sciences Services		80,462		62,877		230,275		189,153
Total	$	315,349	$	220,350	$	851,439	$	651,077

Contract Balances

Accounts Receivable, Net. Accounts receivable represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is unconditional and only the passage of time is required before payment is due. Accounts receivable do not bear interest and are recorded at the invoiced amount. The Company maintains an allowance for expected credit losses representing its best estimate of probable credit losses related to its existing accounts receivable and their net realizable value. The Company determines the allowance for expected credit losses based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends, historical experience and other information through the payment periods. Accounts receivable, net were $234.1 million and $188.3 million at June 30, 2021 and September 30, 2020, respectively.

Contract Assets. Contract assets represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is conditional on something other than the passage of time. These amounts typically relate to contracts within the life sciences segments where the right to payment is not present until completion of the contract or the achievement of specified milestones and the value of the products or services transferred exceed this constraint. Contract assets are classified as current. Contract asset balances which are included within “Prepaid expenses and other current assets” on the Company’s Consolidated Balance Sheet, were $16.1 million and $16.8 million at June 30, 2021 and September 30, 2020, respectively.

Deferred Commissions. Deferred commissions represent a direct and incremental cost of obtaining a contract. These amounts primarily relate to sales commissions within the life sciences segments and are deferred and amortized over a 60-month period, which represents the average period of contract performance. The Company classifies deferred commissions as noncurrent as the original amortization period of this asset is greater than one year. Deferred commissions balances are included within “Other assets” on the Company’s Consolidated Balance Sheet. Deferred commissions were $0.3 million and $0.4 million, respectively, at June 30, 2021 and September 30, 2020. The Company recorded amortization expense related to deferred commissions of less than $0.1 million and $0.1 million for the three months ended June 30, 2021 and 2020, respectively. The Company recorded amortization expense related to deferred commissions of $0.1 million and $0.4 million for the nine months ended June 30, 2021 and 2020, respectively.

Contract Liabilities. Contract liabilities represent the Company’s obligation to transfer products or services to a customer for which consideration has been received, or for which an amount of consideration is due from the customer. Contract assets and liabilities are reported on a net basis at the contract level, depending on the contracts position at the end of each reporting period. Contract liabilities are included within “Deferred revenue” on the Company’s Consolidated Balance Sheet. Contract liabilities were $35.4 million and $31.4 million at June 30, 2021 and September 30, 2020, respectively. Revenue recognized from the contract liability balance at September 30, 2020 was $30.2 million for the nine months ended June 30, 2021.

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Remaining Performance Obligations. Remaining performance obligations represent the transaction price of unsatisfied or partially satisfied performance obligations within contracts with an original expected contract term that is greater than one year and for which fulfillment of the contract has started as of the end of the reporting period. The aggregate amount of transaction consideration allocated to remaining performance obligations as of June 30, 2021 was $65.2 million. The following table summarizes when the Company expects to recognize the remaining performance obligations as revenue; the Company will recognize revenue associated with these performance obligations as transfer of control occurs (in thousands):


	As of June 30, 2021
	Less than 1 Year		Greater than 1 Year		Total
Remaining Performance Obligations	$	46,552	$	18,677	$	65,229

Cost to Obtain and Fulfill a Contract

The Company capitalizes sales commissions when incurred if they are (i) incremental costs of obtaining a contract, (ii) expected to be recovered and (iii) have an expected amortization period that is greater than one year. As part of the Company’s cumulative effect adjustment, incremental costs associated with obtaining a contract were capitalized and have been classified as deferred commissions within the Company’s Consolidated Balance Sheet. These amounts primarily relate to sales commissions within the Brooks life sciences segments and are being amortized over a 60-month period, which represents the average period of contract performance. The Company did not capitalize any sales commissions during the three and nine months ended June 30, 2021 as the amount of sales commissions that qualified for capitalization during the reporting period was insignificant. Sales commissions incurred during the reporting period have been expensed as incurred. These costs are recorded within “Selling, general and administrative” expenses on the Company’s Consolidated Statement of Operations. The Company has concluded that none of its costs incurred in fulfillment of customer contracts meet the capitalization criteria. The Company will account for shipping and handling activities as fulfillment activities and recognize the associated expense when control of the product has transferred to the customer.

15. Segment Information

Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and to assess performance. The Company’s Chief Executive Officer is the Company’s chief operating decision maker.

The Company operates in 3 reportable segments: the Brooks Semiconductor Solutions Group segment, the Brooks Life Sciences Products segment and the Brooks Life Sciences Services segment. These reportable segments also represent the Company’s operating segments. The Company previously operated in 2 reportable segments: the Brooks Semiconductor Solutions Group segment and the Brooks Life Sciences segment. The Brooks Life Sciences segment consisted of the Sample Management operating segment and the GENEWIZ operating segment that aggregated into one reportable segment. During fiscal year 2020, the Company reorganized its operating segments to better align with its business activities in connection with its recent acquisitions and the Company’s strategic vision. Historical information has been adjusted to reflect the new reportable segments.

The Brooks Semiconductor Solutions Group segment provides a variety of products, services and solutions that enable improved throughput and yield in controlled operating environments, as well as an extensive range of support services. The solutions include atmospheric and vacuum robots, robotic modules, tool automation systems, contamination control of carrier pods and reticle storage. The support services include repair services, diagnostic support services, and installation services in support of the products, which enable customers to maximize process tool uptime and productivity. This segment also provides end-user customers with spare parts and enhancement upgrades to maximize tool productivity.

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The Brooks Life Sciences Products segment provides automated cold sample management systems for compound and biological sample storage, equipment for sample preparation and handling, consumables and instruments, that help customers manage samples throughout their research discovery and development workflows. The segment’s product offerings include automated cold storage systems, cryogenic storage systems, consumables and instruments and the associated services business for these products.

The Brooks Life Sciences Services segment provides comprehensive sample management programs, integrated cold chain solutions, informatics, as well as sample-based laboratory services to advance scientific research and support drug development. The segment’s service offerings include sample storage, genomic sequencing, gene synthesis, laboratory processing services, laboratory analysis, and other support services which are provided to a wide range of life science customers, including pharmaceutical companies, biotechnology companies, biorepositories and research institutes.

The following is the summary of the financial information for the Company’s reportable segments for the three and nine months ended June 30, 2021 and 2020 (in thousands):


	Three Months Ended June 30,					Nine Months Ended June 30,
	2021		2020		2021		2020
Revenue:
Brooks Semiconductor Solutions Group	$	186,262	$	127,052	$	474,674	$	370,786
Brooks Life Sciences Products		48,625		30,421		146,490		91,138
Brooks Life Sciences Services		80,462		62,877		230,275		189,153
Total revenue	$	315,349	$	220,350	$	851,439	$	651,077

Operating income:
Brooks Semiconductor Solutions Group	$	44,797	$	23,414	$	99,637	$	55,120
Brooks Life Sciences Products		9,138		2,482		28,295		4,988
Brooks Life Sciences Services		13,783		4,109		41,501		15,695
Reportable segment adjusted operating income		67,718		30,005		169,433		75,803
Amortization of completed technology		3,352		2,779		8,060		8,194
Amortization of other intangible assets		7,733		7,611		22,690		23,137
Restructuring charges		—		(29)		179		1,125
Tariff adjustment		—		—		5,414		—
Other unallocated corporate expenses (income)		6,400		545		21,423		(990)
Total operating income		50,233		19,099		111,667		44,337
Interest income		409		29		503		865
Interest expense		(477)		(810)		(1,485)		(2,265)
Other income (expenses), net		(1,625)		498		(147)		(1,318)
Income before income taxes	$	48,540	$	18,816	$	110,538	$	41,619

		Brooks
		Semiconductor		Brooks Life		Brooks Life
Assets:		Solutions Group		Sciences Products		Sciences Services		Total
June 30, 2021	$	433,108	$	259,592	$	779,798	$	1,472,498
September 30, 2020		296,289		214,196		737,967		1,248,452

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~~is a reconciliation of revenue disaggregated in a manner discussed above to segment revenue for the three and nine months ended June 30, 2020 and 2019 (in thousands):~~

Brooks Semiconductor

Brooks Life

Solutions Group

Sciences

Total
Three months ended June 30, 2020

Point in time

$
125,237

$
27,001

$
152,238
Over time

1,815

66,297

68,112

$
127,052

$
93,298

$
220,350

Three months ended June 30, 2019

Point in time

$
115,910

$
23,121

$
139,031
Over time

130

64,719

64,849

$
116,040

$
87,840

$
203,880

Nine Months Ended June 30, 2020

Point in time

$
364,720

$
72,661

$
437,381
Over time

6,066

207,630

213,696

$
370,786

$
280,291

$
651,077

Nine Months Ended June 30, 2019

Point in time

$
339,537

$
71,270

$
410,807
Over time

2,087

168,743

170,830

$
341,624

$
240,013

$
581,637

~~The following is revenue by geographic location and reporting unit for the three and nine months ended June 30, 2020 and 2019 (in thousands):~~

Three months ended June 30,

Nine months ended June 30,

2020

2019

2020

2019
Geographic Location

North America

$
79,882

$
88,744

$
246,000

$
240,796
Asia/Pacific/Other

99,415

77,275

307,969

234,388
United Kingdom

15,441

13,879

35,745

38,497
Rest of Europe

25,612

23,982

61,363

67,956

$
220,350

$
203,880

$
651,077

$
581,637

Reporting Unit

Automation Solutions

$
81,656

$
77,410

$
214,627

$
223,531
Contamination Control Solutions

34,780

28,606

124,584

86,610
Global Semiconductor Services

10,616

10,024

31,575

31,483
Brooks Semiconductor Solutions Group

127,052

116,040

370,786

341,624
Life Science Products

30,421

28,022

91,138

86,933
Sample Repository Solutions

25,591

22,761

70,878

66,742
GENEWIZ

37,286

37,057

118,275

86,338
Brooks Life Sciences

93,298

87,840

280,291

240,013
Total

$
220,350

$
203,880

$
651,077

$
581,637

~~Contract Balances~~

~~Accounts Receivable, Net.~~ Accounts receivable represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is unconditional and only the passage of time is required

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before payment is due. Accounts receivable do not bear interest and are recorded at the invoiced amount. The Company maintains an allowance for doubtful accounts representing its best estimate of probable credit losses related to its existing accounts receivable and their net realizable value. The Company determines the allowance for doubtful accounts based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends and historical experience. Accounts receivable, net were $183.2 million and $165.6 million at June 30, 2020 and September 30, 2019, respectively.

~~Contract Assets.~~ Contract assets represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is conditional on something other than the passage of time. These amounts typically relate to contracts within the Brooks Life Sciences segment where the right to payment is not present until completion of the contract or the achievement of specified milestones and the value of the products or services transferred exceed this constraint. Contract assets are classified as current. Contract asset balances which are included within “Prepaid expenses and other current assets” on the Company’s Consolidated Balance Sheet, were $15.5 million and $14.0 million at June 30, 2020 and September 30, 2019, respectively.

~~Deferred Commissions.~~ Deferred commissions represent a direct and incremental cost of obtaining a contract. These amounts primarily relate to sales commissions within the Brooks Life Sciences segment and are deferred and amortized over a 60 month period, which represents the average period of contract performance. The Company classifies deferred commissions as noncurrent as the original amortization period of this asset is greater than one year. Deferred commissions balances are included within “Other assets” on the Company’s Consolidated Balance Sheet. Deferred commissions were $0.5 million and $0.8 million at June 30, 2020 and September 30, 2019, respectively. The Company recorded amortization expense related to deferred commissions of $0.1 million and $0.4 million, respectively for the three and nine months ended June 30, 2020.

~~Contract Liabilities.~~ Contract liabilities represent the Company’s obligation to transfer products or services to a customer for which consideration has been received, or for which an amount of consideration is due from the customer. Contract assets and liabilities are reported on a net basis at the contract level, depending on the contracts position at the end of each reporting period. Contract liabilities are included within Deferred revenue on the Company’s Consolidated Balance Sheet. Contract liabilities were $31.2 million and $29.4 million at June 30, 2020 and September 30, 2019, respectively. Revenue recognized from the contract liability balance at September 30, 2019 was $19.2 million for the nine months ended June 30, 2020.

~~Remaining Performance Obligations.~~ Remaining performance obligations represent the transaction price of unsatisfied or partially satisfied performance obligations within contracts with an original expected contract term that is greater than one year and for which fulfillment of the contract has started as of the end of the reporting period. The aggregate amount of transaction consideration allocated to remaining performance obligations as of June 30, 2020 was $55.1 million. The following table summarizes when the Company expects to recognize the remaining performance obligations as revenue, the Company will recognize revenue associated with these performance obligations as transfer of control occurs (in thousands):

As of June 30, 2020

Less than 1 Year

Greater than 1 Year

Total
Remaining Performance Obligations

$
35,213

$
19,927

$
55,140

~~Cost to Obtain and Fulfill a Contract~~

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capitalization during the reporting period was insignificant. Sales commissions incurred during the reporting period have been expensed as incurred. These costs are recorded within “Selling, general, and administration expenses”. The Company has concluded that none of its costs incurred in fulfillment of customer contracts meet the capitalization criteria. The Company will account for shipping and handling activities as fulfillment activities and recognize the associated expense when transfer of control of the product has transferred to the customer.

~~15. Segment Information~~

The Company operates in 2 reportable segments: the Brooks Semiconductor Solutions Group segment and the Brooks Life Sciences segment. Brooks Life Sciences consists of 2 operating segments aggregated into one reportable segment.

The Brooks Semiconductor Solutions Group segment provides a variety of products, services and solutions that enable improved throughput and yield in controlled operating environments, as well as an extensive range of support services. The solutions include atmospheric and vacuum robots, robotic modules, tool automation systems, contamination control of wafer carrier front opening unified pods and reticle storage. The support services include repair services, diagnostic support services, and installation services in support of the products, which enable customers to maximize process tool uptime and productivity. This segment also provides end-user customers with spare parts and productivity enhancement upgrades to maximize tool productivity.

The Brooks Life Sciences segment provides comprehensive life cycle sample management solutions for life science and bioscience customers including complete end-to-end “cold chain of custody” solutions and sample-based laboratory services such as genomic sequencing and gene synthesis to advance scientific research and support drug development. The segment’s product offerings include automated cold sample management systems for compound and biological sample storage, equipment for sample preparation and handling, consumables, and informatics that help customers manage samples throughout their research discovery and development workflows. The segment’s service offerings include sample storage, genomic sequencing, gene synthesis, laboratory processing services, laboratory analysis, and other support services which are provided to a wide range of life science customers, including pharmaceutical companies, biotechnology companies, biorepositories and research institutes.

The Company considers adjusted operating income, which excludes charges related to amortization of completed technology, the acquisition accounting impact on inventory contracts acquired and restructuring related charges as the primary performance metric when evaluating the business. Please refer to Note 21, "Segment and Geographic Information" to the Company’s consolidated financial statements included in the 2019 Annual Report on Form 10-~~K for further information on the operating segments’ description and accounting policies.~~

In conjunction with the acquisition of GENEWIZ during the quarter ended December 31, 2018, the Company reassessed its segment reporting structure and determined that GENEWIZ represents a separate operating segment based on ASC 280, Segment Reporting (“ASC 280”). As permitted by ASC 280, the Company elected to aggregate the Sample Management operating segment and the GENEWIZ operating segment as a single reportable segment titled Brooks Life Sciences. The aggregation was based on similarities in long-term forecasted economic characteristics, particularly adjusted operating income, similarity in services they offer, the customers they serve, the nature of their service delivery models, and their regulatory environments. The Company believes that the aggregated presentation is more useful to investors and other financial users. Management formally assesses the long-term financial outlook of its operating segments on an annual basis as part of its strategic planning process and more frequently on an informal basis. The customer bases of the operating segments overlap, serving life science and bioscience customers in the pharmaceutical and bio-technology companies as well as academic and government institutions. Both of these operating segments provide services relating to the biological samples needed to advance non-clinical and clinical research, serving scientific and business operations functions. In a typical customer workflow, a biological sample is collected, processed and analyzed with results interpreted and used to make scientific judgements. Critical or valuable samples are then annotated and stored for many years in environments where they can be easily retrieved for additional study. These operating segments provide services across this workflow. Both of these operating segments offer services meeting the standards of Good Manufacturing Practices set forth by the U.S. Food and Drug Administration.

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~~The following is the summary of the financial information for the Company’s reportable segments for the three and nine months ended June 30, 2020 and 2019 (in thousands):~~

Three Months Ended June 30,

Nine Months Ended June 30,

2020

2019

2020

2019
Revenue:







Brooks Semiconductor Solutions Group

$
127,052

$
116,040

$
370,786

$
341,624

Brooks Life Sciences

93,298

87,840

280,291

240,013

Total revenue

$
220,350

$
203,880

$
651,077

$
581,637

Operating income:

Brooks Semiconductor Solutions Group

$
23,414

$
20,201

$
55,120

$
56,367

Brooks Life Sciences

6,591

6,186

20,683

13,864

Reportable segment adjusted operating income

30,005

26,387

75,803

70,231

Amortization of completed technology

2,779

2,863

8,194

7,661

Acquisition accounting impact on inventory contracts acquired

—

—

—

184

Amortization of acquired intangible assets

7,611

6,187

23,137

18,569

Restructuring charges

(29)

256

1,125

685

Other unallocated corporate (income) expenses

545

658

(990)

7,705

Total operating income

19,099

16,423

44,337

35,427

Interest income

29

108

865

847

Interest expense

(810)

(8,041)

(2,265)

(21,348)

Loss on extinguishment of debt

—

—

—

(9,051)

Other income (expenses), net

498

(309)

(1,318)

(1,116)

Income before income taxes

$
18,816

$
8,181

$
41,619

$
4,759

Brooks



Semiconductor

Brooks

Assets:

Solutions Group

Life Sciences

Total

June 30, 2020

$
289,873

$
947,280

$
1,237,153

September 30, 2019

259,641

909,154

1,168,795

The following is a reconciliation of the Company’s reportable segments’ segment assets to the corresponding amounts presented in the accompanying unaudited Consolidated Balance Sheets as of June 30, ~~2020~~2021 and September 30, ~~2019~~2020 (in thousands):


	June 30,		September 30,
	2021		2020
Segment assets	$	1,472,498	$	1,248,452
Cash and cash equivalents, restricted cash, and marketable securities		286,310		305,694
Deferred tax assets		4,447		4,979
Total assets	$	1,763,255	$	1,559,125

June 30,

September 30,

2020

2019
Segment assets

$
1,237,153

$
1,168,795
Cash, cash equivalents, restricted cash, and marketable securities

263,275

342,140
Deferred tax assets

3,489

5,064
Total assets

$
1,503,917

$
1,515,999

Revenue from external customers is attributed to geographic areas based on locations in which customer orders are placed. Net revenue by geographic area for the three and nine months ended June 30, 2021 and 2020 (in thousands) are as follows:


		Three Months Ended June 30,				Nine Months Ended June 30,
	2021		2020		2021		2020
Geographic Location:
Asia / Pacific/ Other
China	$	55,062	$	30,228	$	137,945	$	76,435
Taiwan		29,844		15,266		73,350		91,993
Republic of Korea		28,994		22,369		77,982		46,296
Other		37,186		31,552		105,861		93,245
		151,086		99,415		395,138		307,969
North America
USA		108,344		79,032		290,883		243,883
Other		2,110		850		22,947		2,117
		110,454		79,882		313,830		246,000
Europe		53,809		41,053		142,471		97,108
Total	$	315,349	$	220,350	$	851,439	$	651,077

The geographic location of an OEM is not indicative of where the products will eventually be used. The geographic area for the orders is determined by the onward sale of an OEM system which incorporates the sub-systems and/or components.

16. Significant Customers

The Company had ~~one customer that accounted for 10% or more of its consolidated revenue, at 11%, during the nine months ended June 30, 2020. The Company had~~ no ~~customer that accounted for 10% or more of its consolidated revenue during the three months ended June 30, 2020. The Company had no~~individual customer that accounted for 10% or more of its consolidated revenue during the three and nine months ended June 30, ~~2019.~~2021. The Company had no individual customer that accounted for 10% or more of its consolidated revenue during the three months ended June 30, 2020. The Company had one customer that accounted for 10% or more of its consolidated revenue, at 11%, during the nine months ended June 30, 2020. There ~~were no customers~~was one customer that accounted for more than 10% of the Company’s accounts receivable ~~balances~~balance, at 11%, as of June 30, ~~2020~~2021 and no customer that accounted for more than 10% of the Company’s accounts receivable balance as of September 30, ~~2019.~~2020.

17. Commitments and Contingencies

GENEWIZ Tariff Matter

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

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third-party review and in light of a new interpretation surrounding the valuation method used to calculate the estimated transaction value, the Company revised its estimate of the tariffs owed and as a result recorded a liability of $6.1 million in the second quarter of 2021. Of the total liability, $2.8 million is for the period prior to the acquisition of GENEWIZ and an additional $3.3 million is for the period since the Company acquired GENEWIZ in November 2018. The Company intends to pay any tariffs determined to be owed. The Company does not expect to incur any significant penalties associated with such tariffs. As a result of the change in estimate, basic net income per share decreased $0.07 for the nine months ended June 30, 2021. Diluted net income per share also decreased $0.07 for the same period.

~~17. Commitments and Contingencies~~

Letters of Credit

As of June 30, ~~2020,~~2021, the Company had approximately ~~$1.2~~$1.3 million of letters of credit outstanding related primarily to customer advances and other performance obligations. These arrangements guarantee the refund of advance payments received from the Company’s customers in the event that the product is not delivered, or warranty obligations are not fulfilled in accordance with the contract terms. These obligations could be called by the beneficiaries at any time before the expiration date of the particular letter of credit if the Company fails to meet certain contractual requirements. None of these obligations were called during the nine months ended June 30, ~~2020,~~2021, and the Company currently does not anticipate any of these obligations to be called in the near future.

Purchase Commitments

At June 30, ~~2020,~~2021, the Company had non-cancellable commitments of ~~$151.3~~$288.0 million, including primarily purchase orders for inventory of ~~$111.3~~$254.6 million, information technology related commitments of ~~$24.1~~$18.0 million, and China facility commitments of ~~$16.0~~$15.2 million.

Contingencies

The Company is subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. The Company cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. The Company may also have certain indemnification obligations pursuant to claims made under the definitive agreement it entered into with ~~Edawards~~Edwards in connection with the Company’s sale of its semiconductor cryogenics business. See Note 3 “Discontinued Operations” for further information. However, as of the date of this report, the Company believes that none of these claims will have a material adverse effect on its consolidated financial position or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these matters, there can be no assurance that the Company’s assessment of any claim will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated financial position or results of operations in particular quarterly or annual periods.

18. Subsequent Events

Dividend

On ~~July 29, 2020,~~August 3, 2021, the Company’s Board of Directors declared a cash dividend of $0.10 per share payable on September ~~25, 2020~~24, 2021 to common stockholders of record as of September ~~4, 2020.~~3, 2021. Dividends are declared at the discretion of the Company’s Board of Directors and depend on the Company’s actual cash flows from operations, its financial condition and capital requirements and any other factors the Company’s Board of Directors may consider relevant. Future dividend declarations, as well as the record and payment dates for such dividends, will be determined by the Company’s Board of Directors on a quarterly basis.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Our MD&A is organized as follows:

●

Overview. This section provides a general description of our business and operating segments as well as a brief discussion and overall analysis of our business and financial performance, including key developments affecting the Company during the three and nine months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

●

Critical Accounting Policies and Estimates. This section discusses accounting policies and estimates that require us to exercise subjective or complex judgments in their application. We believe these accounting policies and estimates are important to understanding the assumptions and judgments incorporated in our reported financial results.

●

Results of Operations. This section provides an analysis of our financial results for the three and nine months ended June 30, ~~2020~~2021 as compared to the three and nine months ended June 30, ~~2019.~~2020.

●

Liquidity and Capital Resources. This section provides an analysis of our liquidity and changes in cash flows as well as a discussion of available borrowings and contractual commitments.

You should read the MD&A in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. 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” below for a discussion of important factors that could cause our actual results to differ materially from our expectations.

Sale of 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), or Edwards, for approximately $675.0 million in cash, which was subject to customary adjustments. We originally acquired the semiconductor cryogenics business in 2005 as part of the acquisition of Helix Technology Corporation. On July 1, 2019, we completed the sale of the semiconductor cryogenics business for $675.0 million in cash, subject to adjustments for working capital and other items. As part of this sale, we transferred our intellectual property, or IP, for our cryogenics pump products, but not our IPbusiness. Any results related to ~~our semiconductor automation or life sciences businesses. The~~the semiconductor cryogenics business ~~has~~have been classified as discontinued ~~operations and, unless otherwise noted, the description of~~operations.

Separation

On May 10, 2021, we announced our intention to separate our business ~~and the results~~into two independent, publicly traded companies. We plan to spin -off our semiconductor business, which operates as our Semiconductor Solutions Group segment through a pro rata distribution of ~~operations in this MD&A relates solely~~shares to our ~~continuing operations and does not include the operations~~common stockholders. Completion of the ~~semiconductor cryogenics business.~~proposed spin-off is subject to certain conditions, including final approval by our Board of Directors. We are targeting to complete the separation of the business before the end of calendar year 2021.

Impact of the COVID-19 Pandemic

During the COVID-19 pandemic, our facilities have remained operational with only required personnel on site, and the balance of employees working from home. Both ~~business~~our semiconductor and life sciences segments fall within the classification of “Essential Critical Infrastructure Sector” as defined by the U.S. Department of Homeland Security and have continued operations during the COVID-19 pandemic. We have followed government guidance in each region and

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country and have implemented U.S. Centers for Disease Control and Prevention social distancing guidelines and other applicable best practices to protect the health and safety of our employees. In the Life Sciences business, our operations are accepting customer orders for all of their offerings and are fast tracking customer requests which support research and development and testing related to the COVID-19 virus. The Semiconductor Solutions business continues to supply critical chip manufacturing equipment and support services globally. The COVID-19 pandemic has not had a substantial negative impact on our financial results and a portion of ~~this~~the impact has been mitigated by our realignment of resources to satisfy incremental orders related to virus research. ~~Future~~As states safely reopen the economy, get people back to work, and ease social restrictions while minimizing the health impacts of COVID-19, future impacts on ~~the Company’s~~our financial results will depend on ~~multiple variables~~future variants of the virus and vaccine effectiveness against the variants, which are not fully determinable, as the full impact of the pandemic on the economy and markets which we serve is as yet unknown. ~~The~~Our financial results will also depend on variables ~~are many,~~

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

Information Related to Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements that are, or may be considered to be, forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “likely” or similar statements or variations of such terms. Forward-looking statements include, but are not limited to, statements that relate to our future revenue, margins, costs, earnings, profitability, product development, demand, acceptance and market share, competitiveness, market opportunities and performance, levels of research and development, the success of our marketing, sales and service efforts, outsourced activities, operating expenses, anticipated manufacturing, customer and technical requirements, the ongoing viability of the solutions that we offer and our customers’ success, tax expenses, our management’s plans and objectives for our current and future operations and business focus, the impact of the COVID-19 pandemic, the expected benefits and other statements relating to our divestitures and acquisitions, ~~the material weaknesses identified in our internal control over financial reporting,~~ including the ~~impact thereof and~~separation of our ~~remediation plan,~~business into two independent, publicly traded companies, our adoption of ~~the~~ newly issued accounting guidance, the levels of customer spending, general economic conditions, the sufficiency of financial resources to support future operations, and capital expenditures. Such statements are based on current expectations and involve risks, uncertainties and other factors which may cause the actual results, our performance or our achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the Risk Factors which are set forth in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2019,~~2020, or the ~~2019~~2020 Annual Report on Form 10-K, filed with the U.S. Securities and ~~which are incorporated herein by reference,~~Exchange Commission, or SEC, on November 18, 2020, as updated and/or supplemented in subsequent filings with the ~~U.S. Securities and Exchange Commission, or SEC.~~SEC, including under Item 1A “Risk Factors” in Part II of this Quarterly Report on Form 10 Q. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on information currently and reasonably known to us. We do not undertake any obligation to release revisions to these forward-looking statements ~~which may be made~~ to reflect events or circumstances that occur after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence or effect of anticipated or unanticipated events. Precautionary statements made herein should be read as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report on Form 10-Q. Any additional precautionary statements made in our ~~2019~~2020 Annual Report on Form 10-K should be read as being applicable to all related forward-looking statements whenever they appear in this Quarterly Report on Form 10-Q.

Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q to ~~"we"~~“we”, ~~"us"~~“us”, ~~"our"~~“our” and ~~"the Company"~~“the Company” refer to Brooks Automation, Inc. and its consolidated subsidiaries.

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OVERVIEW

We are a leading global provider of semiconductor manufacturing automation solutions for the semiconductor industry, and life science sample-based services and solutions ~~worldwide.~~for the life sciences market. In the semiconductor manufacturing market, we ~~have been a provider of~~provide precision robotics, integrated automation systems and ~~services for more than 40 years.~~contamination control solutions to semiconductor fabrication plants, or fabs, and original equipment manufacturers, or OEMs, worldwide. In the life sciences market, we ~~apply our automation and cryogenics expertise to~~ offer a full suite of ~~sample-based~~ services and ~~products, including a full line of cold chain management~~ solutions for ~~handling~~analyzing, managing, and storing biological and chemical compound samples ~~used in areas such as drug development, clinical~~to advance research and ~~advanced cell therapies. We are also a global provider of~~development for clinical, pharmaceutical, and other scientific endeavors. Our life sciences solutions include gene sequencing and ~~gene~~ synthesis, ~~services. We believe our~~a broad suite of high-throughput automated cryogenic storage products, related consumables, sample inventory software, as well as fully outsourced solutions for sample storage, transport, and inventory management. Our leadership positions and our global support capability in each of these markets make us a valued business partner to the largest semiconductor and semiconductor capital equipment ~~device makers,~~manufacturers and pharmaceutical and life ~~science~~sciences research institutions in the world. In total, we employ approximately ~~3,000~~4,000 full-time employees worldwide and have sales in more than 5080 countries. We are headquartered in Chelmsford, Massachusetts and have operations in North America, Asia, and Europe.

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In the semiconductor capital equipment market, equipment productivity and availability are critical factors for our customers, who typically operate equipment under demanding temperature and/or ~~pressure~~vacuum environments. We are a leader in wafer ~~handling~~ automation and contamination controls solutions and services that are designed to improve throughput, yield, and cost of ownership of tools in semiconductor fabs. Our product offerings include vacuum and atmospheric robots, turnkey vacuum and atmospheric wafer handling systems, as well as wafer carrier cleaning and reticle storage systems. We also capture the complete life cycle of value through our global service network of expert application and field engineers who are located close to our customers. Our services include rapid refurbishment of robots to stringent specifications, upgrades to improve equipment productivity, and proactive monitoring and diagnostics for predictive risk management and improved up-time of the installed base. Although the demand for semiconductors and semiconductor manufacturing equipment is cyclical, resulting in periodic expansions and contractions, we expect the semiconductor equipment market to remain one of our principal markets as we continue making investments to maintain and grow our semiconductor product and service offerings. A majority of our research and development spending advances our current product lines and drives innovations for new product offerings. We invest in research and development initiatives within the Brooks Semiconductor Solutions Group segment to maintain continued leadership position in the markets we serve. ~~We launched our newest~~Our investments in Vacuum Automation and Contamination Control include ramping our intelligent vacuum robot platform, MagnaTran ~~LEAP™~~LEAP^TM, with new designs at customers releasing tools for ~~the rapidly emerging advanced technologies related to manufacturing~~semiconductor technology nodes at 10 ~~nanometer~~nanometers and ~~below design rule semiconductor chips. MagnaTran LEAP™ is well positioned to deliver clean, accurate and fast wafer transport for the fast-growing Deposition and Etch markets.~~below. In addition, our new PuroMaxx LEAP^TM carrier clean product line brings new innovation to handle new contamination control challenges at 3nm and below. As the market for extreme ultraviolet, or EUV, lithography expands, we ~~expect~~will continue our investment in EUV pod cleaning and reticle storage. Our initiatives with our Guardian LEAP^TM product line for EUV reticle storage will employ new innovation to ~~continue~~solve many contamination challenges with EUV reticles. In the third quarter of fiscal year 2021, we acquired collaborative robots and automation subsystems developer Precise Automation, Inc., or Precise, a leading developer of collaborative robots and automation subsystems headquartered in Fremont, California. The acquisition is expected to ~~support and~~ expand our ~~technology and product~~existing offerings ~~for~~within the ~~semiconductor market through acquisitions. In fiscal year 2018, we acquired Tec-Sem~~Brooks Semiconductor Solutions Group AG, or Tec-Sem, a Switzerland-based provider of semiconductor fabrication automation equipment with a focus on reticle management. The acquisition has enhanced our contamination controls solutions offerings.segment.

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, 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. ~~In October 2017,~~

Our life sciences portfolio includes products and services that we acquired ~~all~~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 ~~outstanding capital stock of 4titude Limited, or 4titude, a U.K.-based manufacturer of scientific consumables for biological sample materials used in a variety of genomic~~newly acquired teams and ~~DNA analytical applications. The acquisition has expanded~~ our existing ~~offerings~~research and development resources. This approach of ~~consumables~~acquisition, investment, and ~~instruments within the Brooks Life Sciences segment. In April 2018, we acquired BioSpeciMan Corporation, a Canadian provider of storage services for biological sample materials. The acquisition~~integration has ~~expanded customer relationships and geographic reach within our growing sample management storage services business.~~ On November 15, 2018, we acquired GENEWIZ Group, or GENEWIZ, a leading global genomics service provider headquartered in South Plainfield, New Jersey. GENEWIZ is a global leader in genomics services that enable research scientists to advance their discoveries within the pharmaceutical, academic, biotechnology, agriculture and other markets. GENEWIZ provides gene sequencing and synthesis services for more than 4,000 institutional customers worldwide supported by their global network of laboratories spanning the United States, China, Japan, Germany, France and the United Kingdom. This transaction has added a new and innovative platform which we expect to leverage, along with our core capabilities, to add even more value to samples under our care. ~~Please refer to Note 4, “Acquisitions” to the Company's consolidated financial statements included in the 2019 Annual Report on Form 10-K for further information on these transactions.~~ ~~On February 11, 2020, we acquired RURO, Inc. or RURO, a laboratory software company based in Frederick, Maryland. The acquisition will enable~~allowed us to ~~offer enhanced onsite~~accelerate our internal development and ~~off-site management~~that of ~~biological sample inventories as well as integration solutions~~the acquired entity, significantly decreasing our time to ~~our customers.~~ market.~~Since entering the life sciences industry, we~~

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We have also strengthened and broadened our product portfolio and market reach by investing in internal product development. For the fiscal years ended 2020, 2019 and 2018, more than 29% of our cumulative research and development spending was focused on innovating and ~~sales and marketing infrastructure.~~advancing solutions in the life sciences market. We expect to continue investing in research and development and making strategic acquisitions ~~and other investments~~ 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. Our customers are using our automated storage solutions from room temperature to -196°C. Our BioStore™ II’s unique design allows dual temperature storage down to -80°C with the industry’s highest throughput of sample retrieval. We recently launched the BioStore™ IIIv that compliments the BioStore™ III Cryo product line and offers improved data management ~~market.~~

~~Table~~and sample security for vaccines and biologics stored at -80°C. Within our Life Sciences Services segment, our GENEWIZ business advances research and development activities in gene sequencing, synthesis and related services to meet market demands. Recently, enabled by newly developed proprietary technologies, GENEWIZ launched a portfolio of ~~Contents~~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.

Business and Financial Performance

Three Months Ended June 30, ~~2020~~2021 Compared to Three Months Ended June 30, ~~2019~~2020

Results of Operations - Revenue for the three months ended June 30, ~~2020~~2021 increased 8%43% to ~~$220.4~~$315.3 million, as compared to the corresponding period of the prior fiscal year. Gross margin was ~~42.1%~~45.8% for the three months ended June 30, ~~2020,~~2021, as compared to ~~41.0%~~42.1% for the corresponding period of the prior fiscal year, an increase in gross profit of ~~$9.3~~$51.6 million. Operating expenses were ~~$73.7~~$94.2 million during the three months ended June 30, ~~2020,~~2021, as compared to ~~$67.1~~$73.7 million during the corresponding period of the prior fiscal year, an increase of ~~$6.6~~$20.5 million. Operating income was ~~$19.1~~$50.2 million during the third quarter of fiscal year ~~2020,~~2021, as compared to ~~$16.4~~$19.1 million for the corresponding period of the prior fiscal year. Income from continuing operations was ~~$13.7~~$39.2 million for the third quarter of fiscal year ~~2020,~~2021, as compared to ~~$0.9~~$13.7 million for the corresponding period of the prior fiscal year.

Nine Months Ended June 30, ~~2020~~2021 Compared to Nine Months Ended June 30, ~~2019~~2020

Results of Operations- Revenue for the nine months ended June 30, ~~2020~~2021 increased ~~by 12%~~31% to ~~$651.1~~$851.4 million, as compared to the corresponding period of the prior fiscal year. Gross margin was ~~41.2%~~45.2% for the nine months ended June 30, ~~2020,~~2021, as compared to ~~40.6%~~41.2% for the corresponding period of the prior fiscal year, an increase in gross profit of ~~$31.9~~$116.7 million. Operating expenses were ~~$223.7~~$273.1 million during the nine months ended June 30, ~~2020,~~2021, as compared to ~~$200.7~~$223.7 million during the corresponding period of the prior fiscal year, an increase of ~~$23.0~~$49.4 million. Operating income was ~~$44.3~~$111.7 million during the nine months ended June 30, ~~2020,~~2021, as compared to ~~$35.4~~$44.3 million for the corresponding period of the prior fiscal year. Income from continuing operations was ~~$36.1~~$90.1 million for the nine months ended June 30, ~~2020,~~2021, as compared to ~~$4.4~~$36.1 million for the corresponding period of the prior fiscal year. ~~The prior year fiscal period included a loss on extinguishment of debt of $9.1 million.~~

June 30, ~~2020~~2021 Compared to September 30, ~~2019~~2020

Cash Flows and Liquidity - Cash, cash equivalents, restricted cash and marketable securities were ~~$263.3~~$286.3 million at June 30, ~~2020,~~2021, as compared to ~~$342.1~~$305.7 million at September 30, ~~2019.~~2020. The decrease of ~~$78.9~~$19.4 million from September 30, ~~2019~~2020 was comprised of cash ~~outflows~~inflows of ~~$13.9~~$122.7 million from operating activities; offset by outflows from investing and financing activities ~~$29.7~~which include $92.4 million for acquisitions, $34.6 million for capital expenditures, ~~$15.7 million for acquisitions,~~ and ~~$22.1~~$22.3 million for dividends. Cash ~~outflows~~inflows from operating activities was comprised of $91.5 million of cash taxes paid for the gain on the sale of the semiconductor cryogenics business and $12.1 million uses of cash from the changes in operating assets and liabilities, partially offset by $89.6$148.9 million of earnings, ~~comprised of $35.9~~including $88.9 million of net income and ~~$53.7~~$60.0 million of adjustments to net income for non-cash ~~items.~~items, partially offset by $26.2 million of cash used for the changes in operating assets and liabilities.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our unaudited consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles, or GAAP. The preparation of the interim consolidated financial statements requires us to make estimates and

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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 semiconductor and life science industries, 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.

For further information with regard to our significant accounting policies and estimates, please refer to Note 2, "Summary of Significant Accounting Policies" in the Notes to the unaudited consolidated financial statements included in Item 1 "Consolidated Financial Statements" of this Quarterly Report on Form 10-Q and in the Notes to our audited consolidated financial statements included in Part II, Item 8 “Financial Statements and Supplementary Data” in our ~~2019~~2020 Annual Report on Form 10-K.

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Recently Issued and Adopted Accounting Pronouncements

For a summary of recently issued and adopted accounting pronouncements applicable to our unaudited consolidated financial statements, please refer to Note 2, "Summary of Significant Accounting Policies" in the Notes to the unaudited consolidated financial statements included in Item 1 "Consolidated Financial Statements" of this Quarterly Report on Form 10-Q.

RESULTS OF OPERATIONS

Three and Nine Months Ended June 30, ~~2020~~2021 Compared to Three and Nine Months Ended June 30, ~~2019~~2020

Revenue

We reported revenue of ~~$220.4~~$315.3 million for the three months ended June 30, ~~2020,~~2021, as compared to ~~$203.9~~$220.4 million for the corresponding period of the prior fiscal year, an increase of ~~$16.5~~$95.0 million, or 8%43%. We reported revenue of ~~$651.1~~$851.4 million for the nine months ended June 30, ~~2020,~~2021, as compared to ~~$581.6~~$651.1 million for the corresponding period of the prior fiscal year, an increase of ~~$69.4~~$200.4 million, or ~~12%~~31%. The COVID-19 pandemic has had varying impacts on our business for the three and nine months ended June 30, ~~2020.~~2021. Further discussion of ~~the~~these impacts by each segment are discussed in the paragraphs below.

Our Brooks Semiconductor Solutions Group segment reported revenue of ~~$127.1~~$186.3 million for the three months ended June 30, ~~2020,~~2021, compared to ~~$116.0~~$127.1 million for the corresponding period of the prior fiscal year, an increase of ~~$11.0~~$59.2 million, or 9%47%. ~~We reported increases~~During the three months ended June 30, 2021, Automation revenue increased $43.2 million, driven by vacuum robots and systems, and services revenue increased $2.3 million. The acquisition of Precise in ~~contamination~~April 2021 added $3.3 million of revenue. Contamination control solutions revenue ~~of $6.2~~increased $16.0 million ~~automation revenue of $4.2 million,~~primarily driven by our carrier clean solutions and ~~services revenue of $0.6 million.~~reticle stocker solutions product lines. For the nine months ended June 30, ~~2020,~~2021, our Brooks Semiconductor Solutions Group segment reported revenue of ~~$370.8~~$474.7 million, as compared to ~~$341.6~~$370.8 million for the corresponding period of the prior fiscal year, an increase of ~~$29.2~~$103.9 million, or 9%28%. ~~We reported~~During the nine months ended June 30, 2021, Automation revenue increased $111.2 million, driven by vacuum robots and systems, and services revenue increased $5.3 million. The acquisition of Precise added an additional $3.3 million of revenue. These increases were partially offset by a decline in contamination control solutions revenue of ~~$38.0 million and services revenue of $0.1 million, partially offset by a decrease in automation revenue of $8.9~~$7.3 million. ~~The decrease in automation revenue is driven by lower systems revenue partially offset by higher vacuum robot revenue.~~ The semiconductor markets are cyclical and may fluctuate significantly from quarter to quarter. Demand for our Brooks Semiconductor Solutions Group segments’ products and services is affected by these cycles and a prolonged effect of the COVID-19 pandemic could negatively impact demand for our products and services in this segment. To date, we have experienced some disruption in our supply chain and operations as a result of the COVID-19 pandemic, which has ~~constrained our ability~~impacted the timing of some shipments to ~~ship some of the orders in our backlog. However, we~~customers. We do not believe, however, that COVID-19 pandemic has ~~impacted~~resulted in a negative impact to our bookings or demand for our ~~products.~~products in this segment.

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Our Brooks Life Sciences Products segment reported revenue of ~~$93.3~~$48.6 million for the three months ended June 30, ~~2020,~~2021, as compared to ~~$87.8~~$30.4 million for the corresponding period of the prior fiscal year, an increase of ~~$5.5~~$18.2 million, or 6%60%. We reported increases in Life Sciences Products revenue of $2.4 million, driven by higher sales of consumables and instruments, which delivered record revenue levels driven by COVID-19 related demand, partially offset by lower automation systems revenue, which experienced schedule delays in the installation of large stores due to COVID-19. We reported increases in Sample Repository Solutions revenue of $2.8 million primarily driven by informatics revenue and genomic services. Informatics revenue included $1.9 million from product lines that we acquired in February 2020 in connection with the purchase of RURO in February 2020. We reported increases in GENEWIZ revenue of $0.2 million driven by higher gene synthesis services, partially offset by lower Sanger sequencing revenue, which was impacted by academic and institutional delays in non-essential research projects. For the nine months ended June 30, ~~2020,~~2021, our Brooks Life Sciences Products segment reported revenue of ~~$280.3~~$146.5 million, as compared to ~~$240.0~~$91.1 million for the corresponding period of the prior fiscal year, an increase of ~~$40.3~~$55.4 million, or ~~17%~~61%. The increase in revenue for both the three and nine months ended June 30, 2021 as compared to the same periods in the prior year was primarily driven by demand for consumables and instruments. Revenue related to our automation cold sample management systems and infrastructure services also contributed to the increase in revenues in these periods.

Our Brooks Life Sciences Services segment reported revenue of $80.5 million for the three months ended June 30, 2021, as compared to $62.9 million for the corresponding period of the prior fiscal year, an increase of $17.6 million, or 28%. Revenue from GENEWIZ increased $21.1 million, or 56%, as compared to the prior period. All service lines increased with the most significant impact coming from next generation sequencing, Sanger sequencing and gene synthesis services. We reported a decrease in revenue from Sample Repository Services of $3.5 million due to a decline in 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 this decrease were increases in revenue across several product lines, including storage services and sample administration. The acquisition of ~~$31.9 million from GENEWIZ, which is composed of $20.0~~Trans-Hit Biomarkers Inc., or THB, in December 2020 added $0.9 million of revenue for the three months ended June 30, 2021. For the nine months ended June 30, 2021, our Brooks Life Sciences Services segment reported revenue of $230.3 million, as compared to $189.1 million for the corresponding period of the prior fiscal year, an increase of $41.1 million, or 22%. Revenue from GENEWIZ increased $45.4 million, or 38%, as compared to the ~~additional months~~prior period. All service lines increased with the most significant impact coming from next generation sequencing and gene synthesis services. We reported a decrease in revenue from Sample Repository Services of ~~ownership~~$4.3 million due to the decline in outsourced genomic services as described previously. Offsetting this decline were increases across several product lines, including storage services and informatics, which was driven by the acquisition of RURO. In total, the acquisitions of RURO and THB added $4.4 million of revenue for the nine months ended June 30, ~~2020,~~2021 as compared to the nine months ended June 30, 2019, and $11.9 million from organic growth. Revenue from our Life Sciences Products business increased $4.2 million, driven by consumables and instruments and B3 cryo systems, offset by a decline in automated systems due to COVID-19 related delays in store installations as noted above. prior year period.

We reported increases in Sample Repository Services revenue of $3.8 million. The increase was primarily driven by Informatics, which included $2.3 million of revenue from product lines acquired in connection with the purchase of RURO in February 2020, storage revenue, and genomic services. The increases were offset by

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~~declines in transportation revenue. We estimated~~estimate the impact of the COVID-19 pandemic on our two life sciences segments’ revenue for the three and nine months ended June 30, ~~2020, were net reductions of~~2021, an increase to revenue of approximately ~~$11~~$12 million and ~~$14~~$39 million, respectively. The impact of the COVID-19 pandemic on our revenue is primarily attributable to a slow-down in the marketplace, reflecting the absence of a portion of the workforces within our customers. This slow-down 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 have 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.

Revenue generated outside the United States was ~~$141.3~~$206.6 million, or ~~64%~~66% of total revenue, for the three months ended June 30, ~~2020,~~2021, as compared to ~~$115.7~~$141.3 million, or ~~57%~~64% of total revenue, for the corresponding period of the prior fiscal year. Revenue generated outside the United States was ~~$407.2~~$541.6 million, or ~~63%~~64% of total revenue, for the nine months ended June 30, ~~2020,~~2021, as compared to $342.4 million, or 59% of total revenue, for the corresponding period of the prior fiscal year. We had no individual customer that accounted for more than 10% of our consolidated revenue for the three and nine months ended June 30, 2021. We had no individual customer that accounted for more than 10% of our consolidated revenue for the three months ended June 30, 2020.We had one customer that accounted for more than 10% of our consolidated revenue for the nine months ended June 30, 2020.

Operating Income

We ~~had no customer that accounted for more than 10%~~reported operating income of ~~our consolidated revenue~~$50.2 million for the three months ended June 30, ~~2020. We had no customer that accounted for more than 10% of our consolidated revenue in either of the three and nine months ended June 30, 2019.~~

~~Operating Income~~

~~We reported operating income of~~2021, as compared to $19.1 million for the three months ended June 30, ~~2020, as compared to $16.4 million for the three months ended June 30, 2019.~~2020. The increase of ~~16%~~163% was driven by higher gross profit of ~~$9.3~~$51.6 million, partially offset by an increase in operating expenses of ~~$6.6~~$20.5 million. Within operating expenses, selling, general, and administrative expenses increased ~~$7.1~~$16.2 million, ~~while~~and research and development expenses ~~and restructuring~~increased $4.3 million. Restructuring expenses ~~decreased $0.2 million and $0.3 million, respectively.~~ were essentially flat compared to the prior year period.

During the nine months ended June 30, ~~2020,~~2021, we reported operating income of ~~$44.3~~$111.7 million, as compared to ~~$35.4~~$44.3 million for the corresponding period of the prior fiscal year. The increase of ~~25%~~152% was driven by higher gross profit of ~~$31.9~~$116.7 million, partially offset by an increase in operating expenses of ~~$23.0~~$49.4 million. Within operating expenses, selling, general, and administrative expenses increased ~~$20.4~~$42.8 million, and research and development expenses increased ~~$2.2 million and restructuring~~$7.6 million. Restructuring expenses decreased ~~$0.3~~$1.0 million. Operating income for the nine months ended June 30, 2021 included $5.5 million of cost accrued for tariff liabilities on intercompany import activity in fiscal years 2016 through 2020. The costs resulted from an internal review of the transaction value used to calculate tariffs on intercompany

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imports of samples shipped from our GENEWIZ business. The drivers of the changes in gross profit, research and development, and selling, general and administrative expenses for the periods presented are discussed in further detail below.

Operating income for our Brooks Semiconductor Solutions Group segment was ~~$22.7~~$43.5 million for the three months ended June 30, ~~2020,~~2021, as compared to ~~$19.3~~$22.7 million for the corresponding period of the prior fiscal year. Operating income for the three months ended June 30, ~~2020~~2021 included ~~$0.7~~$1.2 million of charges for amortization related to completed technology, as compared to ~~$0.9~~$0.7 million of these charges incurred during the corresponding period of the prior fiscal year. Operating income for the three months ended June 30, 2021 also includes a $0.1 million charge related to the purchase accounting impact on inventory. Adjusted operating income for our Brooks Semiconductor Solutions Group segment, which excludes the charges mentioned above, was ~~$23.4~~$44.8 million for the three months ended June 30, ~~2020,~~2021, as compared to ~~$20.2~~$23.4 million for the corresponding period of the prior fiscal year. Operating income for our Brooks Semiconductor Solutions Group segment was ~~$52.9~~$97.6 million for the nine months ended June 30, ~~2020,~~2021 as compared to ~~$53.5~~$52.9 million for the corresponding period of prior fiscal year. Operating income for the nine months ended June 30, ~~2020~~2021 included ~~$2.2~~$1.9 million of charges for amortization related to completed technology, as compared to ~~$2.7~~$2.2 million of these charges incurred during the corresponding period of the prior fiscal year. ~~The nine~~Operating income for the three months ended June 30, ~~2019~~2021 also includes ~~inventory step-up charges of $0.2 million.~~a $0.1 million charge related to the purchase accounting impact on inventory. Adjusted operating income for our Brooks Semiconductor Solutions Group segment, which excludes the charges mentioned above, was ~~$55.1~~$99.6 million for the nine months ended June 30, ~~2020,~~2021, compared to ~~$56.4~~$55.1 million for the corresponding period of the prior fiscal year. Please refer to Note 15, “Segment Information”. in the Notes to the unaudited consolidated financial statements included in Item 1 "Consolidated Financial Statements" of this Quarterly Report on Form 10-Q.

Operating income for our Brooks Life Sciences Products segment was ~~$4.2~~$8.7 million for the three months ended June 30, ~~2020,~~2021, as compared to ~~$4.2~~$2.2 million for the corresponding period of the prior fiscal year. Operating income for our Brooks Life Sciences Products segment includes charges for amortization related to completed technology of ~~$2.1~~$0.4 million and ~~$2.0~~$0.3 million for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Adjusted operating income for our Brooks Life Sciences Products segment, which excludes the charges mentioned above, was ~~$6.6~~$9.1 million for the three months ended June 30, ~~2020,~~2021, as compared to ~~$6.2~~$2.5 million for the corresponding period of the prior fiscal year. During the nine months ended June 30, ~~2020,~~2021, operating income for our Brooks Life Sciences Products segment was ~~$14.4~~$27.3 million, as compared to ~~$8.9~~$4.1 million for the

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corresponding period of the prior fiscal year. Operating income for our Brooks Life Sciences Products segment includes charges for amortization related to completed technology of ~~$6.3~~$1.0 million and ~~$4.9~~$0.9 million, respectively, for the nine months ended June 30, 2021 and 2020. Adjusted operating income for our Brooks Life Sciences Products segment, which excludes the charges mentioned above, was $28.3 million for the nine months ended June 30, ~~2020 and 2019, respectively. Adjusted operating income for our Brooks Life Sciences segment, which excludes the charges mentioned above, was $20.7 million for the nine months ended June 30, 2020,~~2021, as compared to ~~$13.9~~$5 million for the corresponding period of the prior fiscal year. Please refer to Note 15, “Segment Information”. in the Notes to the unaudited consolidated financial statements included in Item 1 "Consolidated Financial Statements" of this Quarterly Report on Form 10-Q.

Operating income for our Brooks Life Sciences Services segment was $12.2 million for the three months ended June 30, 2021, as compared to $2.0 million for the corresponding period of the prior fiscal year. Operating income for our Brooks Life Sciences Services segment includes charges for amortization related to completed technology of $1.7 million and $1.8 million for the three months ended June 30, 2021 and 2020, respectively. Adjusted operating income for our Brooks Life Sciences Service segment, which excludes the amortization expense was $13.8 million for the three months ended June 30, 2021, as compared to $4.1 million for the corresponding period of the prior fiscal year. During the nine months ended June 30, 2021, operating income for our Brooks Life Sciences Services segment was $30.9 million, as compared to $10.2 million for the corresponding period of the prior fiscal year. Operating income for our Brooks Life Sciences Services segment includes charges for amortization related to completed technology of $5.2 million for both the nine months ended June 30, 2021 and 2020. The nine months ended June 30, 2021 also includes $5.5 million of cost accrued for tariff liabilities in the nine months ended June 30, 2021 discussed above. Adjusted operating income for our Brooks Life Sciences Service segment, which excludes the charges mentioned above, was $41.5 million for the nine months ended June 30, 2021, as compared to $15.6 million for the corresponding period of the prior fiscal year. Please refer to Note 15, “Segment Information” in the Notes to the unaudited consolidated financial statements included in Item 1 "Consolidated Financial Statements" of this Quarterly Report on Form 10-Q.

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We estimate that the impact of the COVID-19 pandemic on ~~the Brooks Life Sciences~~our two life sciences segments’ operating income was a net ~~reduction~~increase of approximately $6$7 million and $8$22 million ~~respectively,~~ during the three and nine months ended June 30, ~~2020.~~2021, respectively. The ~~reduction~~increase was primarily driven by the ~~net~~ revenue impacts to the ~~Life Sciences segment~~life sciences segments noted above and temporary premiums we elected to pay our labor-force that worked at our sites around the world. Offsetting these impacts were government subsidies that we received in China related to rent and payroll benefits, as well as, lower expenses related to travel and trade shows.

Gross Margin

We reported gross margins of ~~42.1%~~45.8% for the three months ended June 30, ~~2020,~~2021, as compared to ~~41.0%~~42.1% for the corresponding period of the prior fiscal year. Gross margin ~~increased in the Brooks Life Sciences segment by 1.1~~ ~~percentage points and in the Brooks Semiconductor Solutions Group segment by 1.2 percentage points~~ for the third quarter of fiscal year ~~2020,~~2021 as compared to the corresponding period of the prior fiscal year increased in all segments. The Brooks Life Sciences Services segment gross margins increased by 8.1 percentage points, the Brooks Life Sciences Products segment gross margins increased by 3.0 percentage points and the Brooks Semiconductor Solutions Group segment gross margins increased by 1.9 percentage points as compared to the corresponding period of the prior fiscal year. Cost of revenue for the three months ended June 30, ~~2020,~~2021, included ~~$2.8~~$3.4 million of charges related to amortization of completed technology, as compared to ~~$2.9~~$2.8 million during the corresponding period of the prior fiscal ~~year,~~year. The three months ended June 30, 2021 also included a charge of $0.1 million related to the purchase accounting impact on inventory. There were no such charges in the same period in the prior year. Excluding amortization and ~~$0.3 million of restructuring related charges for~~ the ~~impairment of software assets. Excluding these charges, margins~~purchase accounting impact on inventory, gross margin expanded ~~1.1~~3.4 percentage ~~point~~points during the three months ended June 30, ~~2020,~~2021, as compared to the corresponding period of the prior fiscal year. During the nine months ended June 30, ~~2020,~~2021, we reported gross margins of ~~41.2%~~45.2%, as compared to ~~40.6%~~41.2% for the corresponding period of the prior fiscal year. Gross ~~margin~~margins increased in ~~the~~all segments. The Brooks Life Sciences Services segment gross margins increased by ~~2.4~~ 5.3 percentage points, ~~and decreased in~~ the Brooks Semiconductor Solutions Group segment gross margins increased by ~~0.8~~3.6 percentage points inand the ~~nine months ended June 30, 2020,~~Brooks Life Sciences Products segment gross margins increased by 3.1 percentage points, as compared to the corresponding period of the prior fiscal year. Cost of revenue for the nine months ended June 30, ~~2020,~~2021 included ~~$8.2~~$8.1 million of charges related to amortization of completed technology, as compared to ~~$7.7~~$8.2 million during the corresponding period of the prior fiscal year, and ~~$0.3~~charges of $6.1 million ~~of restructuring related charges~~accrued for the ~~impairment of software assets.~~tariff liabilities discussed in the “Operating Income” section above. The ~~results~~nine months ended June 30, 2021 also included a $0.1 million charge related to the purchase accounting impact on inventory. There were no such charges for the nine months ended June ~~30, 2019 included $0.2~~31, 2020. Excluding amortization, the purchase accounting impact on inventory, and the $5.5 million of tariff charges related to ~~the inventory step-up in purchase accounting. Excluding the amortization of completed technology, the restructuring related charges and inventory step-up charges,~~prior fiscal years, margins expanded ~~0.5~~4.3 percentage points during the nine months ended June 30, ~~2020,~~2021, as compared to the corresponding period of the prior fiscal year.

Our Brooks Semiconductor Solutions Group segment reported gross margins of ~~42.1%~~44.0% for the three months ended June 30, ~~2020,~~2021, as compared to ~~40.9%~~42.1% for the corresponding period of the prior fiscal year. The increase of ~~1.2~~1.9 percentage points was driven by volume leverage from our automation products and ~~lower warranty costs, partially offset by unfavorable~~favorable product mix. Cost of revenue for the three months ended June 30, ~~2020~~2021 included ~~$0.7~~$1.2 million of charges for amortization related to completed technology, as compared to ~~$0.9~~$0.7 million of these charges incurred during the corresponding period of the prior fiscal year. In addition, the three months ended June 30, 2021 included a charge of $0.1 million related to the purchase accounting impact on inventory. There were no such charges in the corresponding period of the prior fiscal year. Excluding the impact of the amortization of completed technology and the purchase accounting impact on inventory, gross margins ~~declined 1.0~~increased 2.0 percentage points during the three months ended June 30, ~~2020,~~2021, as compared to the corresponding period of the prior fiscal year. During the nine months ended June 30, ~~2020,~~2021, our Brooks Semiconductor Solutions Group segment reported gross margins of ~~40.0%~~43.6%, as compared to ~~40.8%~~40.0% for the corresponding period of the prior fiscal year. The ~~decrease in gross margin percentage~~increase of ~~0.8~~3.6 percentage points was ~~primarily~~ driven by volume leverage from our automation products and favorable product mix. Cost of revenue for the nine months ended June 30, ~~2020~~2021 included ~~$2.2~~$1.9 million of charges for amortization related to completed technology, as compared to ~~$2.7~~$2.2 million of these charges incurred during the corresponding period of the prior fiscal year. The ~~results for the~~ nine months ended June ~~30, 2019~~31, 2021 also included ~~$0.2~~a $0.1 million ~~of charges~~charge related to the ~~inventory step-up in~~ purchase ~~accounting. There were no such charges in the corresponding fiscal 2020 period.~~accounting impact on inventory. Excluding the impact of the amortization of completed technology and the ~~charges related to the~~purchase accounting impact on inventory, ~~step-up,~~ gross margins ~~declined 1.0~~increased 3.4 percentage points during the nine months ended June 30, ~~2020,~~2021, as compared to the corresponding period of the prior fiscal year.

Our Brooks Life Sciences Products segment reported gross margins of ~~42.1%~~46.6% for the three months ended June 30, ~~2020,~~2021, as compared to ~~41.0%~~43.6% for the corresponding period of the prior fiscal year. ~~Cost~~The increase of revenue for the three months ended June 30, 2020 included $2.1 million of charges for amortization related to completed technology, as compared to $2.0 million incurred during the corresponding period of the prior fiscal year, and $0.3 million of restructuring related charges3.0 percentage points

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was primarily driven by volume leverage related to increased sales in our consumables and instruments product lines. Cost of revenue included $0.4 million of charges for amortization related to completed technology for the ~~impairment~~three months ended June 30, 2021, as compared to $0.3 million for the corresponding period of ~~software assets.~~the prior fiscal year. Excluding the impact of the amortization of completed technology, ~~and the restructuring related charges,~~ margins expanded ~~1.4~~3.0 percentage points during the three months ended June 30, ~~2020,~~2021, as compared to the corresponding period of the prior fiscal year. During the nine months ended June 30, ~~2020,~~2021, our Brooks Life Sciences Products segment reported gross margins of ~~42.7%~~45.9%, as compared to ~~40.3%~~42.8% for the corresponding period of the prior fiscal year. The ~~improvement in gross margin for the three and nine months ended June 30, 2020, compared to the same period in the prior year,~~increase of 3.1 percentage points was primarily driven by ~~the Life Science Products reporting unit, as a result of improved cost performance~~volume leverage related to increased sales in our consumables and ~~volume leverage.~~instruments product lines. Cost of revenue for the nine months ended June 30, 2021 and 2020 included ~~$6.0~~$1.0 million of charges for amortization related to completed technology, as compared to ~~$4.9~~$0.9 million ~~incurred~~in the same period of the prior fiscal year. Excluding the impact of the amortization of completed technology, margins expanded 2.8 percentage points during the nine months ended June 30, 2021, as compared to the corresponding period of the prior fiscal ~~year,~~year.

Our Brooks Life Sciences Services segment reported gross margins of 49.4% for the three months ended June 30, 2021, as compared to 41.4% for the corresponding period of the prior fiscal year. The increase of 8.1 percentage points was driven by volume leverage, as well as the favorable benefit of 4.4 points from the reduction of outsourced genomic services under the alliance contract referenced above. Cost of revenue for the three months ended June 30, 2021 and ~~$0.3~~2020 included $1.7 million of ~~restructuring related~~ charges for amortization related to completed technology, as compared to $1.8 million in the ~~impairment~~corresponding period of ~~software.~~the prior fiscal year. Excluding the impact of the amortization of completed technology, margins expanded 6.8 percentage points during the three months ended June 30, 2021, as compared to the corresponding period of the prior fiscal year. During the nine months ended June 30, 2021, our Brooks Life Sciences Services segment reported gross margins of 47.9%, as compared to 42.6% for the corresponding period of the prior fiscal year. The improvement of 5.3 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 3.6 points from the reduction of outsourced genomic services under the alliance contract referenced above. Cost of revenue for the nine months ended June 30, 2021 and 2020 both included $5.2 million of charges for amortization related to completed technology and $5.5 million related to the tariff charges discussed above. Excluding the impact of the amortization of completed technology, and the ~~restructuring~~$5.5 million of tariff charges related ~~charges,~~to prior periods, margins expanded ~~2.6~~7.1 percentage points during the nine months ended June 30, ~~2020,~~2021, as compared to the corresponding period of the prior fiscal year.

Research and Development Expenses

Research and development expenses were ~~$14.0~~$18.3 million and ~~$43.7~~$51.3 million, respectively, during the three and nine months ended June 30, ~~2020,~~2021, as compared to ~~$14.2~~$14.0 million and ~~$41.5~~$43.7 million, respectively, during the corresponding periods of the prior fiscal year. The ~~decrease~~increase of ~~$0.2~~$4.3 million and $7.6 million, respectively, during the ~~third quarter of fiscal year 2020~~three and nine months ended June 30, 2021 as compared to the corresponding ~~period~~periods of fiscal year ~~2019 reflects lower expense of $0.3~~2020, was driven by all three operating segments. Incremental research and development expenses related to acquisitions were $0.4 million ~~within~~and $0.7 million, respectively, for the ~~Brooks Semiconductor Solutions Group segment, partially offset by a $0.1 million increase within the Brooks Life Sciences segment. The increase of $2.2 million during the~~three and nine months ended June 30, ~~2020 as compared~~2021. The drivers of the increase to ~~the corresponding period of fiscal year 2019 reflects higher expense of $1.9 million within the Brooks Semiconductor Solutions Group~~research and development expenses by segment ~~and a $0.3 million increase within the Brooks Life Sciences segment.~~are discussed in more detail below.

Research and development expenses in our Brooks Semiconductor Solutions Group segment were ~~$9.6~~$12.8 million and ~~$30.6~~$35.5 million, respectively, during the three and nine months ended June 30, ~~2020,~~2021, as compared to ~~$9.9~~$9.6 million and ~~$28.6~~$30.6 million, respectively, during the corresponding periods of the prior fiscal year. The ~~decrease in research and development expenses for the three months ended June 30, 2020 compared to the corresponding period~~increase of the prior year was driven by lower travel costs, partially offset by higher payroll costs. The increase in research and development expenses during the nine months ended June 30, 2020 over the corresponding prior period were primarily attributable to increased employee related costs and outside services.

~~Research and development expenses in our Brooks Life Sciences segment were $4.4~~$3.2 million and ~~$13.2~~$4.9 million, respectively, during the three and nine months ended June 30, ~~2020,~~2021 as compared to ~~$4.3 million and $12.9 million, respectively, during~~ the corresponding periods of ~~the prior~~ fiscal ~~year. The increase~~year 2020 was driven by higher payroll related costs and project spend to support new product development initiatives in ~~research and development costs for~~our product sets, as well as the ~~three months ended June 30, 2020 compared to the prior year period was due to~~ expense structure added ~~in connection with~~from the acquisition of RURO of $0.3 million, partially offset by lower employee related costs. The nine months ended June 30, 2020 included an incremental $1.1 million of costs related to GENEWIZ which was acquired in November of 2018 and an additional $0.4 million of costs related to RURO. These increases were partially offset by lower project spending, outside services and travel expenses.

~~Selling, General and Administrative~~Precise acquisition.

~~Selling, general~~Research and ~~administrative~~development expenses in our Brooks Life Sciences Products segment were ~~$59.7~~$2.7 million and ~~$178.9~~$7.4 million, respectively, during the three and nine months ended June 30, ~~2020,~~2021, as compared to ~~$52.6~~$2.0 million and ~~$158.5~~$6.5 million, respectively, during the corresponding periods of the prior fiscal year. ~~During the three months ended June 30, 2020, the~~The increase of ~~$7.1~~$0.8 million ~~was due to increased expenses of $3.1 million within the Brooks Life Sciences segment and increased expenses of $3.0 million within the Brooks Semiconductor Solutions Group segment~~ and $1.0 million, ~~of unallocated corporate related expenses. During~~respectively, during the three and nine months ended June 30, 2021 as compared to the corresponding period of fiscal year 2020 ~~the increase of $20.4 million~~ was ~~due to increased expenses of $17.2 million within the Brooks Life Sciences segment~~driven by higher program and increased expenses of $7.6 million within the Brooks Semiconductor Solutions Group segment, partially offset by a reduction in corporate related expenses of $4.4 million. The reduction in unallocated corporate related expenses was primarily attributed to a decrease in net merger and acquisition costs, partially offset by increased amortization expense.outside services costs.

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Research and development expenses in our Brooks Life Sciences Services segment were $2.8 million and $8.4 million, respectively, during the three and nine months ended June 30, 2021, as compared to $2.4 million and $6.7 million, respectively, during the corresponding periods of the prior fiscal year. The increase of $0.4 million and $1.7 million, respectively, during the three and nine months ended June 30, 2021 as compared to the corresponding period of fiscal year 2020 was primarily driven by higher payroll related costs and project costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $75.9 million for the three months ended June 30, 2021, as compared to $59.7 million for the corresponding period of the prior fiscal year. The increase of $16.2 million was driven by $10.2 million from segment selling, general and administrative expenses, $5.9 million from corporate expenses not allocated to our segments and $1.0 million of incremental costs related to acquisitions. The segment selling, general and administrative expenses are discussed in further detail below. The increase in unallocated corporate expenses was primarily driven by mergers and acquisition related expenses, which were $6.3 million for the three months ended June 30, 2021, compared to nominal charges for the three months ended June 30, 2020. Merger and acquisition expenses for the three months ended June 30, 2021 included $5.8 million of costs related to the separation of the Company. Unallocated corporate expenses also include amortization primarily related to customer relationship intangible assets, which were $7.7 million and $7.6 million for the three months ended June 30, 2021 and 2020, respectively.

In connection with the announcement of the separation of our business into two publicly-traded companies, we announced that the Automation company will retain the Brooks Automation, Inc. name and the Life Sciences company will be rebranded at the time of the separation. In connection with the rebranding, management is assessing the utility, remaining useful life and fair values of the Life Sciences trademark and tradename assets. The total net book value of these intangible assets is $14.3 million as of June 30, 2021. The conclusion of management’s assessment of the impact of the rebranding could result in an impairment charge of the asset values or an acceleration of amortization expense in future periods.

Selling, general and administrative expenses were $221.6 million for the nine months ended June 30, 2021, as compared to $178.9 million for the corresponding period of the prior fiscal year. The increase of $42.8 million was driven by $21.6 million from the segment selling, general and administrative expenses, $21.2 million from corporate expenses not allocated to our segments and $2.7 million of incremental costs related to acquisitions. The segment selling, general and administrative expenses are discussed in further detail below. The increase in unallocated corporate expenses was primarily driven by mergers and acquisition related expenses, which were $21.1 million for the nine months ended June 30, 2021, compared to $0.5 million for the nine months ended June 30, 2020. Merger and acquisition expenses for the nine months ended June 30, 2021 included $19.6 million of costs related to the separation of the Company. Unallocated corporate expenses also include amortization primarily related to customer relationship intangible assets, which were $22.7 million and $23.1 million for the nine months ended June 30, 2021 and 2020, respectively.

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 the three and nine months ended June 30, 2021, corporate allocated expenses increased $3.8 million and $7.4 million respectively, compared to the corresponding prior periods, primarily due to higher variable compensation accruals and IT infrastructure costs.

Selling, general and administrative expenses in our Brooks Semiconductor Solutions Group segment were ~~$21.2~~$25.7 million and ~~$65.0~~$74.1 million, respectively, for the three and nine months ended June 30, ~~2020,~~2021, as compared to ~~$18.2~~$21.2 million and ~~$57.3~~$65.0 million, respectively, for the corresponding periods of the prior fiscal year. The increase of ~~$3.0~~$4.5 million and ~~$7.6 million for the three and nine months ended June 30, 2020 is primarily related to higher corporate allocated costs, driven by higher audit, legal, and IT costs.~~

~~Selling, general, and administrative expenses in our Brooks Life Sciences segment were $30.6 million and $92.1~~$9.1 million, respectively, for the three and nine months ended June 30, ~~2020,~~2021 is primarily related to higher variable compensation expense and corporate allocated costs, which were driven by the factors discussed above, as well as the Precise acquisition which added $0.5 million of costs for the three and nine months ended June 30, 2021. These increases were partially offset by lower travel and trade show expenses.

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Selling, general and administrative expenses in our Brooks Life Sciences Products segment were $11.2 million and $32.5 million, respectively, for the three and nine months ended June 30, 2021, compared to ~~$27.5~~$9.0 million and ~~$74.9~~$28.4 million, respectively, for the corresponding periods of the prior fiscal year. The increase ~~for the three months ended June 30, 2020 was driven by increased bad debt expense, payroll primarily related to our investment in GENEWIZ,~~of $2.2 million and $0.3 million of expense structure added with the acquisition of RURO. These increases were partially offset by lower travel expenses and expense structure reductions realized from the restructuring actions taken in Sample Management during 2019 and 2020. The increase for the nine months ended June 30, 2020, was primarily related to increases from GENEWIZ which consisted of $5.1 million due to the additional time under ownership during the nine months ended June 30, 2020 compared to the corresponding period of the prior fiscal year, and $1.6 million driven by the investment in selling, general, and administrative structure to support its growth. The increase was also driven by higher corporate allocated costs due to higher audit, legal, and IT costs, and $0.4 million of expense from RURO, acquired in February of 2020. These increases were partially offset by expense structure reductions realized from the restructuring actions taken in Sample Management during 2019 and 2020.

~~Restructuring Charges~~

~~We recorded restructuring charges of $0 and $1.1~~$4.1 million, respectively, ~~during~~for the three and nine months ended June 30, ~~2020, as compared to $0.3 million and $0.7 million, respectively, during~~2021 over the corresponding periods inof the prior ~~year. Cost savings realized during~~fiscal year was primarily driven by higher sales commission expenses, variable compensation expense and corporate allocated costs, which were driven by the ~~three months ended June 30, 2020 included $1.1 million~~factors discussed above. These items were partially offset by lower expenses related to ~~actions to reduce costs within the~~travel.

Selling, general and administrative expenses in our Brooks Life Sciences ~~segment. Restructuring charges~~Services segment were $24.9 million and $71.1 million, respectively, for the three and nine months ended June 30, ~~2020 consisted~~2021, compared to $21.6 million and $63.6 million, respectively, for the corresponding periods of ~~$0.6~~the prior fiscal year. The increase of $3.3 million ~~related to corporate restructuring actions~~ and ~~$0.6~~$7.5 million, inrespectively, for the Brooks Life Sciences segment related to the action initiated in the fourth quarter of fiscal year 2019 to eliminate costs within the segment’s Sample Management business. Cost savings realized during thethree and nine months ended June 30, ~~2020~~2021 over the corresponding periods of the prior fiscal year was primarily driven by variable compensation expense and infrastructure costs related to ~~these actions were $2.6 million in Brooks Life Sciences segment.~~acquisitions, partially offset by lower travel expenses and lower bad debt expense.

Non-Operating Income (Expenses)

Interest income - During the three and nine months ended June 30, ~~2020,~~2021, we recorded interest income of $0.4 million and $0.5 million, respectively, as compared to less than $0.1 million and $0.9 ~~million, respectively, as compared to $0.1 million and $0.8~~ million, respectively, during the corresponding periods of the prior fiscal year.

Interest expense - During the three and nine months ended June 30, ~~2020,~~2021, we recorded interest expense of ~~$0.8~~$0.5 million and ~~$2.2~~$1.5 million, respectively, as compared to ~~$8.0~~$0.8 million and ~~$21.3~~$2.2 million, respectively, during corresponding periods of the prior fiscal year. The decrease in interest expense in the current periods compared to the three and nine months ended June 30, 2019 is due to carrying less debt in the current period. We extinguished $495.3 million of debt during the fourth quarter of fiscal year 2019.

~~Loss on extinguishment of debt~~ - During the nine months ended June 30, 2019, we recorded a loss on extinguishment of debt of $9.1 million in connection with the syndication of the $350.0 million 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 loan was accelerated and recorded as a loss on extinguishment of debt on our statement of operations.

Other income (expenses), net - During the three and nine months ended June 30, ~~2020,~~2021, we recorded other expense net of $1.6 million and $0.1 million, respectively, compared to other income, net of $0.5 million ~~compared to~~for the three months ended June 30, 2020 and other expense, net of ~~$0.3~~$1.3 million ~~in the corresponding period of the prior year. The current period included a reduction in foreign currency exchange losses as compared to the prior year period. During~~for the nine months ended June 30, ~~2020 and 2019, we recorded other expense, net~~2020. The primary driver of ~~$1.3 million and $1.1 million, respectively. The~~

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the increase in other ~~expense,~~expenses, net in the three months ended June 30, 2021 as compared to the same period in the prior year was due to an increase in foreign currency exchange losses of $1.5 million. The primary driver of the decrease in other expenses, net for the nine months ended June 30, ~~2020~~2021 as compared to the ~~corresponding~~same period in the prior year ~~period~~ was ~~related~~due to ~~an increase in~~a decrease of foreign ~~currency~~ exchange ~~losses.~~losses of $1.6 million.

Income Tax Provision

We recorded an income tax provision of $9.4 million and $20.4 million, respectively, during the three and nine months ended June 30, 2021. The tax provision for the three months ended June 30, 2021 was primarily driven by the provision on earnings from operations during the period. The provision was partially offset by a $1.5 million benefit from the reversal of uncertain tax positions during the quarter. The provision for the nine months ended June 30, 2021 was primarily driven by the provision on earnings from operations during the period and was partially offset by a $2.7 million discrete stock compensation windfall benefit for tax deductions that exceeded the associated book compensation expense.

We recorded an income tax provision of $5.1 million and $5.6 million, respectively, during the three and nine months ended June 30, 2020. The tax ~~expense~~provision for the three months ended June 30, 2020 was primarily driven by the provision on earnings from operations during the period. The tax provision for the nine months ended June 30, 2020 was primarily driven by the provision on earnings from operations during the ~~period, which~~period. The tax provision was offset by a $6.1 million discrete stock compensation windfall benefit for tax deductions that exceeded the associated compensation expense in ~~prior quarters and~~the period. During the nine months ended June 30, 2020, we also recorded a discrete benefit of $0.5 million from a reduction of deferred tax liabilities related to the extension of a tax rate incentive in China.

~~We recorded an income tax expense~~43

Table of $7.3 million and $0.4 million, respectively, during the three and nine months ended June 30, 2019. The tax expense for the three months ended June 30, 2019 was primarily driven by a $4.3 million discrete expense resulting from a change to the U.S. tax regulations issued during the quarter related to the transition tax and the provision on current earnings. This expense was partially offset by a discrete benefit for stock compensation windfalls of $0.4 million for tax deductions that exceeded the associated compensation expense and a $0.3 million reversal of an unrecognized tax benefit upon the closing of an audit. The tax expense for the nine months ended June 30, 2019 was primarily driven by a $3.2 million expense upon completion of the accounting for the U.S. transition tax and the provision on current earnings. These items were partially offset by discrete benefits related to stock compensation windfalls of $4.5 million for tax deductions that exceeded the associated compensation expense and $1.4 million of tax benefits related to the remeasurement of net U.S. deferred tax assets due to state tax rate changes.Contents

Discontinued Operations

On July 1, 2019, we completed the sale of the semiconductor cryogenics business which we include as a discontinued ~~operation.~~operation in our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10 Q. During the first quarter of fiscal year 2021, the final net working capital was determined which resulted in our payment of an additional $1.8 million to Edwards in the nine months ended June 30, 2021. We generated a net loss from discontinued operations, net of tax of $1.2 million for the nine months ended June 30, 2021 related to our semiconductor cryogenics business. We recorded a nominal loss related to our semiconductor cryogenics business for the three months ended June 30, 2021. We did not record income or loss related to our semiconductor cryogenics business for the three months ended June 30, 2020. We generated a net loss from discontinued operations of $0.2 million for the nine months ended June 30, 2020 related to our semiconductor cryogenics business. We did not record income or loss related to our semiconductor cryogenics business for the three months ended June 30, 2020. We generated revenue and net income from discontinued operations of $34.5 million and $6.3 million, respectively, for the three months ended June 30, 2019 related to our semiconductor cryogenics business. We generated revenue and net income from discontinued operations of $109.5 million and $20.7 million, respectively, for the nine months ended June 30, 2019 related to our semiconductor cryogenics business. The net ~~income includes income from the Ulvac Cryogenics, Inc. joint venture during the fiscal 2019 periods. The income~~loss 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~~us on an ongoing basis. Indirect expenses which supported the semiconductor cryogenics business, and which will remain as part of ~~the~~our continuing operations, are not reflected in ~~income~~net loss from discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

~~A considerable portion~~Our semiconductor solutions business represents slightly more than half of our revenue and is dependent on the demand for semiconductor capital equipment which historically has experienced periodic downturns. 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 cyclical nature of our served markets and uncertainty in the current global economic environment, including the uncertainty related to 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 the disposition of the semiconductor cryogenics business and is stated on a total company consolidated basis.

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Overview of Cash Flows and Liquidity

Our cash and cash equivalents, restricted cash and marketable securities as of June 30, ~~2020~~2021 and September 30, ~~2019~~2020 consist of the following (in thousands):



	June 30, 2020		September 30, 2019		June 30, 2021		September 30, 2020
Cash and cash equivalents	$	256,633	$	301,642	$	269,862	$	295,649
Restricted cash		3,567		3,529		12,710		6,877
Short-term marketable securities		136		34,124		101		67
Long-term marketable securities		2,939		2,845		3,637		3,101
	$	263,275	$	342,140	$	286,310	$	305,694

Our cash is held in numerous locations throughout the world. As of June 30, ~~2020,~~2021, we had cash and cash equivalents of ~~$263.3~~$269.9 million, of which ~~$217.1~~$206.1 million was held outside of the United States. If these funds are needed for our U.S. operations, we would need to repatriate these funds. ~~As a result of recent changes in U.S.~~Although under current tax ~~legislation,~~laws any repatriation inof these fund to the ~~future~~United States would likely not result in further U.S. federal income ~~tax.~~tax, it is uncertain whether this will be the case in the future based on changes to the tax laws that may be enacted. Our intent is to reinvest these funds outside of the United States and our current operating plans do not demonstrate a need to repatriate these funds for our U.S. operations. As of June 30, ~~2020,~~2021 and September 30, ~~2019,~~2020, we had marketable securities of ~~$3.1~~$3.7 million and ~~$37.0~~$3.2 million, respectively. Our marketable securities are generally readily convertible to cash without an adverse impact.

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Nine Months Ended June 30, ~~2020~~2021 Compared to Nine Months Ended June 30, ~~2019~~2020

Overview

Cash, cash equivalents, restricted cash and marketable securities were ~~$263.3~~$286.3 million at June 30, ~~2020,~~2021, as compared to ~~$342.1~~$305.7 million at September 30, ~~2019.~~2020. The decrease of ~~$78.9~~$19.4 million from September 30, ~~2019~~2020 was comprised of cash ~~outflows~~inflows of ~~$13.9~~$122.7 million from operating activities; offset by outflows from investing and financing activities ~~$29.7~~which include $92.4 million for acquisitions, $34.6 million for capital expenditures, ~~$15.7 million for acquisitions,~~ and ~~$22.1~~$22.3 million for dividends. Cash ~~outflows~~inflows from operating activities was comprised of $91.5 million of cash taxes paid for the gain on the sale of the semiconductor cryogenics business and $12.1 million uses of cash from the changes in operating assets and liabilities, partially offset by $89.6$148.9 million of earnings, ~~comprised of $35.9~~including $88.9 million of net income and ~~$53.7~~$60.0 million of adjustments to net income for non-cash ~~items.~~items, partially offset by $26.2 million of cash used for the changes in operating assets and liabilities.

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 operating charges impact reported cash flows.

Cash provided by operating activities was $122.7 million during the nine months ended June 30, 2021 and was comprised primarily of $148.9 million of earnings, including $88.9 million of net income and $60.0 million of adjustments to net income for non-cash items. Partially offsetting these items was the net use of cash of $26.2 million for the increase in net operating assets and liabilities. The net increase in operating assets and liabilities consisted primarily of increases in accounts receivable and inventory, partially offset by increases to accrued expenses and other liabilities and accounts payable. Cash used in operating activities was $13.9 million during the nine months ended June 30, 2020, comprised primarily of $91.5 million of cash taxes paid for the gain on the sale of the semiconductor cryogenics business and a use of cash of $12.1 million related to ~~changes~~increases in ~~our~~net operating assets and liabilities partially offset by ~~$89.6~~$89.6 million of ~~earnings,~~earnings, comprised of $35.9 million of net income, and $53.7 million of adjustments to net income for non-cash items. The ~~changes~~net increase in operating assets and liabilities ~~that resulted in a use of cash~~ consisted primarily of an increase in inventory ~~levels. These uses of cash were~~ partially offset by ~~an increase~~increases in ~~accounts payable and decreased prepaid~~accrued expenses and other ~~assets. Cash provided by operating activities was $58.2 million during the nine months ended June 30, 2019, comprised primarily of earnings of $76.6 million, including net income of $25.1 million~~liabilities, accrued compensation and ~~the impact of non-cash related charges of $51.5 million. Partially offsetting these items were the uses of cash of $18.4 million related to the changes in our operating assets and liabilities.~~accounts payable.

Investing Activities

Cash flows used in investing activities consist primarily of cash used for acquisitions, capital expenditures and purchases of marketable securities as well as cash proceeds generated from sales and maturities of marketable securities.

~~Table~~ Cash used in investing activities was $128.8 million during the nine months ended June 30, 2021 and included cash outflows for acquisitions of ~~Contents~~

$92.4 million and capital expenditures of $34.6 million. Cash used in investing activities was $12.6 million during the nine months ended June 30, 2020. Cash used in investing activities during the nine months ended June 30, 2020 included cash outflows for capital expenditures of $29.7 million, $15.7 million for the acquisition of RURO, and $10.8 million for the purchases of marketable securities. These outflows were partially offset by cash inflows from the maturities and sales of marketable securities of $44.7 million. Cash used in investing activities of $408.1 million during the nine months ended June 30, 2019 included cash outflow of $442.7 million for the acquisition of GENEWIZ, $15.5 million of capital expenditures and $1.3 million for the purchases of marketable securities, partially offset by cash inflows from the proceeds of sales and maturities of marketable securities of $51.5 million.

Financing Activities

Cash outflows for financing activities were $21.4 million during the nine months ended June 30, 2021 which primarily consisted of cash outflows for cash dividend payments of $22.3 million. Cash used in financing activities was $21.6 million during the nine months ended June 30, ~~2020. Cash outflows for financing activities during the nine months ended June 30,~~ 2020 ~~included~~which primarily consisted of cash outflows for cash dividend payments of $22.1 million. Cash provided by financing activities was $309.8 million during the nine months ended June 30, 2019. Cash provided by financing activities during the nine months ended June 30, 2019 included net cash inflows of $331.4 million primarily related to net proceeds from the incremental term loan secured in November 2018 and the syndication of the incremental term loan in February 2019, partially offset by cash dividend payments of $21.7 million.

China Facility

In April 2019, we committed to construct a facility in Suzhou China, to consolidate the Suzhou operations of the GENEWIZ business and provide an infrastructure to support future growth. The facility ~~will be~~is being constructed in two ~~phases. We expect to incur $50.0 to $55.0 million~~

Table of ~~capital expenditures related to this facility over the next five years, of which up to $10.0 million is expected to be incurred during 2020.~~Contents

phases. We have incurred ~~$6.2~~$23.2 million of capital expenditures to date related to the construction of the facility, which includes ~~$3.2~~$6.2 million and ~~$5.5~~$13.8 million, respectively, for the three and nine months ended June 30, ~~2020.~~

2021.

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.

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.

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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, contains certain customary representations and warranties, covenants and events of default. As of June 30, ~~2020,~~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.~~ At June 30, ~~2020, we had an aggregate~~2021, the outstanding principal balance of ~~$0.8 million under~~ the ~~three five-year~~ term ~~loans. The two one-year short term loans matured and were repaid in full as of September 30, 2019.~~

~~At June 30, 2020, the aggregate outstanding principal balance of all of the outstanding term loans~~loan was ~~$50.4~~$49.7 million, excluding unamortized deferred financing costs of ~~$0.4~~$0.3 million.

Borrowings under the term ~~loans bear~~loan are subject to a variable interest ~~rates.~~rate. As a result, we may experience exposure to interest rate risk due to the potential volatility associated with the variable interest ~~rates~~rate on the term ~~loans.~~loan. If rates increase, we may be subject to higher costs of servicing the ~~loans~~loan which could reduce our profitability and cash flows.

In connection with our acquisition of GENEWIZ Group in November 2018, we assumed three five-year term loans, which matured and were repaid in full on June 30, 2021.

During the nine months ended June 30, ~~2020,~~2021, the weighted average stated interest rate on the term loans was ~~4.3%~~2.8%. During the nine months ended June 30, ~~2020,~~2021, we incurred aggregate interest expense of ~~$1.8~~$1.3 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.

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As of June 30, ~~2020,~~2021, we had approximately ~~$39.6~~$49.8 million available for borrowing under the line of credit. There were no amounts outstanding pursuant to the line of credit as of June 30, ~~2020.~~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 June 30, ~~2020.~~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 during potentially severe downturns of the cyclical semiconductor market, and for strategic investments or acquisitions.

Dividends

On ~~July 29, 2020, the Company’s~~August 3, 2021, our Board of Directors declared a cash dividend of $0.10 per share payable on September ~~25, 2020~~24, 2021 to common stockholders of record as of September ~~4, 2020.~~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. We intend to pay quarterly cash dividends in the future; however, the amount and timing of these dividends may be impacted by the cyclical nature of certain markets we serve or the impact of the COVID-19 pandemic. We may reduce, delay or cancel a quarterly cash dividend based on the severity of a cyclical downturn or if the effects of the COVID-19 pandemic are prolonged.

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Share Repurchase 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 will be based on market and business conditions, legal requirements and other factors and repurchases may be commenced or suspended at any time at our discretion. There were no shares repurchased under this program during the nine months ended June 30, ~~2020~~2021 and there have been no shares repurchased under this program since its inception.

Contractual Obligations and Requirements

At June 30, ~~2020, the Company~~2021, we had non-cancellable commitments of ~~$151.3~~$288.0 million, including primarily purchase orders for inventory of ~~$111.3~~$254.6 million, information technology related commitments of ~~$24.1~~$18.0 million, and China facility commitments of ~~$16.0~~$15.2 million.

At June 30, ~~2020,~~2021, we had approximately ~~$1.2~~$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 the nine months ended June 30, ~~2020,~~2021, and we currently do not anticipate any of these obligations to be called in the near future.

Off-Balance Sheet Arrangements

As of June 30, ~~2020,~~2021, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a variety of market risks, including fluctuations in foreign currency exchange rates and changes in interest rates affecting interest payments on our term loan and investment return on our cash and cash equivalents, restricted cash and ~~marketable securities.~~short-term and long-term investments.

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Interest Rate Exposure

Our term ~~loans bear~~loan has a variable interest ~~rates~~rate which ~~subject~~subjects us to interest rate risk. Our primary interest rate risk exposure results from changes in the short-term LIBOR rate, the federal funds effective rate and the prime rate. During the nine months ended June 30, ~~2020,~~2021, the weighted average stated interest rate on ~~the~~all of our then outstanding term loans was ~~4.3%~~2.8%. At June 30, ~~2020,~~2021, the outstanding term loans principal balance on our remaining term loan was ~~$50.4~~$49.7 million, net of unamortized deferred financing costs of ~~$0.4~~$0.3 million. During the nine months ended June 30, ~~2020,~~2021, we incurred cash interest expense of ~~$1.7~~$1.1 million on ~~the~~all of our then outstanding term loans. A hypothetical 100 basis point change in interest rates would result in a $0.4 million change in interest expense incurred during the nine months ended June 30, ~~2020.~~2021.

Our cash and cash equivalents and restricted cash consist principally of money market securities that are short-term in nature. At June 30, ~~2020,~~2021, our total short-term and long-term investments were ~~$3.1~~$3.7 million, consisting mostly of highly rated corporate debt securities and other debt securities. At June 30, ~~2020,~~2021, we had noan insignificant amount of securities in an unrealized loss position. A hypothetical 100 basis point change in interest rates would result in an insignificant increase in interest income earned during the nine months ended June 30, ~~2020.~~2021.

Currency Rate Exposure

We have transactions and balances denominated in currencies other than the U.S. dollar. Most of these transactions or balances are denominated in Euros, British Pounds and a variety of Asian currencies. Sales in currencies other than the U.S. dollar were approximately ~~39%~~38% and ~~35%~~39% of our total sales, respectively, during the nine months ended June 30,

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~~2020~~ 2021 and ~~2019.~~2020. These sales were made primarily by our foreign subsidiaries, which have cost structures that substantially align with the currency of sale.

In the normal course of our business, we have liquid assets denominated in non-functional currencies which include cash, short-term advances between our legal entities and accounts receivable which are subject to foreign currency exposure. Such balances were approximately ~~$137.6~~$103.2 million and ~~$117.7~~$142.9 million, respectively, at June 30, ~~2020~~2021 and September 30, ~~2019,~~2020, and related to the Euro, British Pound and a variety of Asian currencies. We mitigate the impact of potential currency translation losses on these short-term intercompany advances by the timely settlement of each transaction, generally within 30 days. We also utilize forward contracts to mitigate our exposures to currency movement. We incurred foreign currency losses of ~~$2.8~~$1.2 million and ~~$1.1~~$2.8 million ~~respectively,~~ during the nine months ended June 30, 2021 and 2020, ~~and 2019,~~respectively, which related to the currency fluctuation on these balances between the time the transaction occurred and the ultimate settlement of the transaction. A hypothetical 10% change in foreign exchange rates at June 30, ~~2020~~2021 and ~~2019~~2020 would result in an approximate change of $2.8 million and less than $0.1 ~~million and $1.6~~ million, respectively, in our net income during the nine months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~Under~~. As of the ~~supervision~~end of the period covered by this report, and ~~with~~pursuant to Rules 13a-15(e) and 15d-15(e) under the ~~participation~~Securities Exchange Act of ~~our~~1934, the Company’s management, including our chief executive officer and chief financial officer, ~~we conducted an evaluation of~~has concluded that our disclosure controls and procedures ~~as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Disclosure controls and procedures~~ are ~~designed to ensure that information required to be disclosed by us~~effective.

Change in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon this evaluation, our chief executive officer and our chief financial officer concluded that because of the material weakness identifiedInternal Controls. There were no changes in our internal control over financial reporting ~~discussed below,~~that occurred during our ~~disclosure controls and procedures were not effective as of June 30, 2020 the end of the period covered by this Quarterly Report on Form 10-Q.~~

~~Previously Identified Material Weaknesses in Internal Control Over Financial Reporting~~

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

~~We previously disclosed in our 2019 Annual Report on Form 10-K, the following control deficiencies, that constitute material weaknesses in our internal control over financial reporting:~~

●

We did not maintain effective controls related to the accuracy of revenue recorded at a business unit within our Brooks Life Sciences segment. Specifically, we did not maintain effective controls to verify the accuracy of the price and quantity data for customer transactions entered into the business unit’s billing system, and to verify that the invoices generated from the billing system were based on the appropriate amounts. These control deficiencies resulted in immaterial misstatements and subsequent immaterial adjustments to revenue and related accounts and disclosures in the interim and annual consolidated financial statements for the years ended September 30, 2019, 2018 and 2017.

●

We did not design and maintain effective controls related to the occurrence and cutoff of revenue on products shipped to customers from contract manufacturers for a business unit within our Brooks Semiconductor Solutions Group segment. Specifically, we did not design and maintain effective controls to verify that revenue from product shipments from contract manufacturers in this business unit were evaluated for proper revenue recognition at the point of transfer of control. Management determined that this control deficiency resulted in an immaterial audit adjustment related to the revenue, cost of sales and the corresponding balance sheet accounts of our consolidated financial statements for themost recent fiscal ~~year ended September 30, 2019.~~

~~Remediation of Prior Material Weakness~~

~~To address the material weakness related to the business unit within our Brooks Semiconductor Solutions Group segment noted above, during the~~ quarter ended December 31, 2019, we designed and implemented a new control to verify that product shipments from contract manufacturers are reviewed for proper revenue recognition at the point of transfer of control. We also initiated employee training with respect to these procedures. Based upon the actions taken, as well as the testing and evaluation of the design and operating effectiveness of the new control, we concluded that the material weakness relating to the occurrence and cutoff of revenue on products shipped from contract manufacturers was remediated as of March 31, 2020.

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~~Remediation Efforts and Status of Remaining Material Weakness~~

We are committed and are taking steps necessary to remediate the control deficiencies that constituted the material weakness described above related to the Brooks Life Sciences segment by implementing changes to our internal control over financial reporting. Management has been implementing and continues to implement measures to ensure that the control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed and operating effectively. The remediation actions include: (i) leveraging the implementation a new billing system and enterprise resource planning system (ERP) which will reduce the complexity of the billing process, (ii) improving the oversight of the accuracy of invoice processing and (iii) improving process documentation and training related to the billing and oversight process.

We implemented a new billing system and enterprise resource planning system (ERP) during the quarter ended December 31, 2019, for the business unit within our Brooks Life Sciences segment noted above. During the quarter ended March 31, 2020, we designed and implemented new and enhanced controls to verify the accuracy of price and quantity data for customer transactions and enhancing our documentation related to the business unit’s billing procedures and controls, which will support the business unit’s ability to train employees and execute the controls effectively.

We believe the measures described above will facilitate the remediation of the control deficiencies we have identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and will continue to review, optimize and enhance our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify, or, in appropriate circumstances, not complete, certain of the remediation measures described above. This material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

~~Changes in Internal Control Over Financial Reporting~~

Except for the remediation efforts discussed above under “Remediation Efforts and Status of Remaining Material Weakness”, there were no changes in internal control over financial reporting during the fiscal third quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. We cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this Quarterly Report on Form 10-Q, we believe that none of these claims will have a material adverse effect on our consolidated financial condition or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that our assessment of any claim will reflect the ultimate outcome and an adverse outcome in certain matters could, from ~~time-to-time,~~time to time, have a material adverse effect on our consolidated financial condition or results of operations in particular quarterly or annual periods.

Item 1A. Risk Factors

You should carefully review and consider the information regarding certain factors that could materially affect our business, consolidated financial condition or results of operations set forth under Item 1A. Risk Factors in our ~~2019~~2020 Annual Report on Form ~~10-K as updated and/or supplemented in our subsequent Quarterly Reports on Form 10-Q.~~10-K. There have been no material changes from the risk factors disclosed in our ~~2019~~2020 Annual Report on Form 10-K, ~~and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020,~~ other than ~~updates to~~the addition of the risk ~~factors~~factor set forth below.We may disclose changes to risk factors or additional factors from time to time in our future filings with the SEC.

Our ~~financial condition~~plans to separate into two independent, publicly traded companies may not be completed on the currently contemplated timeline or at all and ~~results~~may not achieve the intended benefits.

On May 10, 2021, we announced our intention to separate our business into two independent, publicly traded companies. We plan to spin off our semiconductor business, which operates as our Semiconductor Solutions Group segment, through a pro rata distribution of ~~operations could~~shares to our common stockholders. The proposed separation is subject to various conditions, is complex in nature, and may be ~~adversely~~ affected by unanticipated developments, credit and equity markets, or changes in market conditions. As independent, publicly traded companies, each of the ~~recent coronavirus pandemic or other outbreak of a contagious disease.~~

~~Any outbreak of a contagious disease, or other adverse public health developments, could have a material~~resulting companies will be smaller and ~~adverse effect on~~less diversified than our business, ~~operations. In December 2019,~~with a ~~novel strain of coronavirus, causing a disease referred to as COVID-19, was first identified in Wuhan, Hubei Province, China,~~ ~~resulting in shutdowns of manufacturing~~narrower business focus, and commerce in the months that have followed. Since then, COVID-19 has spread worldwide, including in the United States, and has resulted in authorities implementing numerous measures to try to contain the disease, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns. The spread of COVID-19 has caused us to modify our business practices (including curtailing employee travel, mandatory work-from-home policies and cancellation of physical participation in meetings, events and conferences), and we may take further actions as required by government authorities or that we determine are in the best interests of our employees, customers, partners and suppliers. There is no certainty that such measures will be sufficient to mitigate the risks posed by the disease, and our ability to perform critical functions could be harmed.

As a result of the COVID-19 pandemic and the measures designed to contain its spread, our suppliers may not have the materials, capacity, or capability to supply our components according to our schedule and specifications. Further, there may be logistics issues, including our ability and our supply chain’s ability to maintain production and transportation demands that may cause further delays. If our suppliers’ operations are curtailed, we may need to seek alternate sources of supply, whichthey may be more ~~expensive. Alternate sources~~vulnerable to changing market conditions.

We may not be ~~available~~able to achieve the full strategic and financial benefits that we anticipate to result from the separation, or such benefits may ~~result~~be delayed or not occur at all. We may experience negative reactions from financial markets if we do not complete the separation in ~~delays in shipments~~a reasonable time period, or at all. Following the proposed separation, the combined value of the shares of the two publicly traded companies may not be equal to ~~us from~~or greater than what the value of our ~~supply chain and subsequently to our customers.~~common stock would have been had the proposed separation not occurred. In addition, the ~~COVID-19 pandemic~~cost and resources required to effectuate the ~~measures designed to stop the spread of the virus~~separation may ~~have similar effects on our customers. The current pandemic may also give rise to force majeure contractual protections being asserted by customers and/or suppliers that~~be significantly higher than what we maintain contracts with, potentially relieving contractual obligations these parties have to us. In any case, any disruption of our suppliers’ or customers’ businesses would likely negatively impact our sales and operating results.currently anticipate.

~~While the disruptions and restrictions on the ability to travel, quarantines and other measures taken as a result of the COVID-19 pandemic are expected to be temporary, the duration of any~~

Any of these ~~measures, and related financial impact, cannot be estimated at this time. Should these measures continue for an extended period of time, the impact on our supply chain and customers~~factors could have a material adverse effect on our business, financial condition, results of operations, ~~and~~ cash ~~flows. Further, while~~flows or the ~~potential impact and duration~~price of ~~the COVID-19 pandemic on the global economy and~~ our ~~business in particular may be difficult to assess or predict, the COVID-19 pandemic has resulted in, and may continue to result in,~~common stock.

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significant disruption of global financial markets and an economic downturn that may affect demand for our products and services, reduce our ability to access capital or our customers’ ability to pay us for past or future purchases, impact our operating results, and have a negative impact on our liquidity and stock price. In addition, an extended recession or an additional financial market correction resulting from the spread of COVID-19 could decrease overall technology manufacturing spending, adversely affecting demand for our products and services, in particular in the Brooks Semiconductor Solutions Group segment, our business and the value of our common stock. The global pandemic of COVID-19 continues to rapidly evolve, and we will continue to monitor the COVID-19 situation closely. Although the magnitude of the impact of the pandemic on our business and operations remains uncertain, the continued spread of COVID-19 or the occurrence of other outbreaks of contagious diseases could adversely impact our business, financial condition, operating results and cash flows.

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Item 6. Exhibits

The following exhibits are included herein:


Exhibit No.		Description

31.01		Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02		Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following material from the Company’s Quarterly Report on Form 10-Q, for the quarter ended June 30, ~~2020,~~2021, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the unaudited Consolidated Balance Sheets; (ii) the unaudited Consolidated Statements of Operations; (iii) the unaudited Consolidated Statements of Comprehensive Income; (iv) the unaudited Consolidated Statements of Cash Flows; (v) the unaudited Consolidated Statements of Changes in Stockholders Equity; and (vi) the Notes to the unaudited Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because XBRL tags are embedded in the iXBRL document.

104		Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	BROOKS AUTOMATION, INC.

Date: ~~July 31, 2020~~August 5, 2021	/s/ Lindon G. Robertson
	Lindon G. Robertson
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

Date: ~~July 31, 2020~~August 5, 2021	/s/ David Pietrantoni
	David Pietrantoni
	Vice President-Finance and Corporate Controller
	(Principal Accounting Officer)

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	Three Months Ended		Nine months ended
	June 30, 2019		June 30, 2019
Statements of Operations:
Total revenue	$	23,209	$	68,252
Gross profit		9,905		27,134
Operating Income		5,267		14,476
Net income		3,674		9,777


	Fair Value of
	Assets and
	Liabilities
Accounts receivable	$	1,220
Prepaid expenses and other current assets		29
Goodwill		11,116
Intangible assets		6,042
Other assets		230
Accounts payable		(15)
Deferred revenue		(1,320)
Accrued compensation and benefits		(344)
Other current liabilities		(91)
Long-term deferred tax liabilities		(1,091)
Long-term operating lease liabilities		(147)
Total purchase price, net of cash acquired	$	15,629


	As of June 30, 2020
Operating Leases:
Operating lease right-of-use assets	$	36,224

Accrued expenses and other current liabilities	$	6,457
Long-term operating lease liabilities		29,280
Total operating lease liabilities	$	35,737

Finance Leases:
Property, plant and equipment, at cost	$	2,540
Accumulated amortization		(934)
Property, plant and equipment, net	$	1,606

Accrued expenses and other current liabilities	$	1,183
Other long-term liabilities		599
Total finance lease liabilities	$	1,782

Weighted average remaining lease term (in years):
Operating leases		8.83
Finance leases		1.55

Weighted average discount rate:
Operating leases		4.29	%
Finance leases		4.72	%


	Brooks Semiconductor		Brooks Life
	Solutions Group		Sciences		Total
Three months ended June 30, 2020
Point in time	$	125,237	$	27,001	$	152,238
Over time		1,815		66,297		68,112
	$	127,052	$	93,298	$	220,350

Three months ended June 30, 2019
Point in time	$	115,910	$	23,121	$	139,031
Over time		130		64,719		64,849
	$	116,040	$	87,840	$	203,880

Nine Months Ended June 30, 2020
Point in time	$	364,720	$	72,661	$	437,381
Over time		6,066		207,630		213,696
	$	370,786	$	280,291	$	651,077

Nine Months Ended June 30, 2019
Point in time	$	339,537	$	71,270	$	410,807
Over time		2,087		168,743		170,830
	$	341,624	$	240,013	$	581,637