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Azenta (AZTA)

Participants
Steve Schwartz President and CEO
Lindon Robertson EVP and CFO
Mark Namaroff Director, IR
Patrick Ho Stifel Nicolaus
Jacob Johnson Stephens
Stephen Unger Needham
Amanda Scarnati Citi
Paul Knight Janney Montgomery Scott
John Pitzer Credit Suisse
Call transcript
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Operator

Greetings, and welcome to the Brooks Automation Q2 2020 Financial Results.

During the presentation, all participants will be in a listen-only mode. Afterwards, we’ll conduct a question-and-answer session. [Operator Instructions].

As a reminder, this conference is being recorded, Thursday, April 30, 2020.

to conference like Namaroff. to now would turn over the Mark I go Please ahead.

Mark Namaroff

Good the We'd everyone hope you, of conference afternoon Thank Malika. second the on you our staying quarter in call for welcome XXXX. everyone healthy line this to environment. like fiscal to earnings is We today.

the it that was located our on Investor be Web site press Our the the of available QX release prepared earnings slides the is close brooks.investorroom.com supplementary as using during are at after we'll issued market PowerPoint today and remarks. Relations'

many remind identified would like a financial actual that I in within Private XXXX. those of course other factors the or forward-looking results are Securities of today, to the to such making that everyone be may and differ during of statements. from the of Litigation the cause we'll meaning forward-looking events statements call Act number There

of Statement, annual our reports release presentation various XX-Q. you Form would Form earnings site, and our the titled the filings on our and XX-K slide on our on Harbor our with Harbor section SEC Safe aforementioned our Safe Web including I to reports on refer quarterly PowerPoint the

update events should the these obligation financial data future or We no statements presented make occur to from differ that statements forward-looking today.

to presented accordance in with We financial measures of with results to refer number will which also addition non-GAAP GAAP. a conjunction are used and in

to aspects of financial the and measures even themselves. of an exclusion GAAP We believe business. results understanding they of operations non-GAAP reconciliation with relied not an complete be of measures the measures measures, our provide more viewing but of upon should Non-GAAP and the when way performance, GAAP additional considered Brooks' GAAP provide

Chief Executive with Officer, our So Financial Vice me Officer, Lindon and President today Chief is on Schwartz; Robertson. and the Executive Steve and President call

XXXX. financial highlights a up results call second detailed look with then the of provide our will We into the remarks more quarter third outlook and from on an will open quarter Lindon up the for for of and the Steve the quarter fiscal

to end We questions prepared have the your remarks. will time at then the take of

And with our the that, CEO, now I’d to over call to Steve turn Schwartz. like

Steve Schwartz

Mark, you, good and afternoon, Thank everyone.

We’re you today. have glad with us to

press published I’ll April environment. on preliminary recap how and results you those briefly we’ve issued extra the to in the remarks focus near-term on a some business already segment about release give results we and current As indication XXth, color at we see level some my

during I’d like to priorities start our discussing this pandemic. by

well our safety the is well as suppliers our partners, our of families customers. and First and including and as being their employees

customers and on Second, to essential have long and our health our urgent of ability serve businesses with there that this COVID-XX that to we’re taking emerge we all actions and for ensure And finally, stronger requests from the focus term ongoing many. are the crisis company been ever. deemed the any specific than

that our With factories, approximately and a only our of employees, our be rest jobs operating. currently home. require X,XXX about interruptions, throughout repair brief few working employees running work of QX all them the Of global The were up laboratories from are to are on-site. X,XXX exceptions and and have of centers all XX-plus

way environment and more customers. operations be times. the during could serving other have All embraced and new practices not pleased shifts to We of allowed staggered the social have which us new work has and include these with our screening, the resiliency that employee temperature particularly each of we adapted that turbulent proud PPE, distancing, are use every the work practices of this to diligent continue

services need new even needed our and who COVID-XX and customers their the provide with or about providers capability in customers up side services We’ve Management to crisis. to GENEWIZ, more either energizing informatics their many that instances supply from bring delivery to our of on services consistently came to and for as and Sample It's lost we customers to services struggled our commitments Sciences us regular met Life chains, they the underscores been who because their purpose stepped had mission. our

deliver of positions term portfolio, building allows presence we’ve global to quarter-to-quarter in we're possess this are and We've market Finally, and trusted the to incredible growth that an customers envy around scientific and capability brands amassed a to for we company our us competitors. and earnings the revenue our momentum world and long our speaks that year-to-year generated. the that world-class the technology

just so accomplished much long-term and in be know how of workforce. since front our opportunity capability to down slow this especially energy even we’re we global now, will through shortsighted commitment on of it that of be us in would and valuable ensure They building the deliver our to future. We've the There's the goals. more us

intend support. retain reason, market development, we our team activities and capture customer to For their that new discovery, for and fund technology

investments that actions emerge from pandemic making day more customers. each and our by, to stronger to we’re taking necessary goes and With even the

through it’s earnings continue action this to the decision the on absolutely some have will Our year, right these to take. but of performance rest we impact investments our believe that

dedicated countries As pandemic, to drive that definitive team momentum we've that place plan contemplating from to in companies have and and are the how the will we reemerge a established. a continue

on report QX. Now, I’ll

up for XX% performance growth $XXX XX% million, revenue our the of year-over-year Life quarter each same with was Second segments. Sciences of Semiconductor strong with and

changes and As demand, as customer throughout were quarter. we our both for to adjustments factories of worked most part, the the to I meet and mix running because with quarter many albeit mentioned, laboratories the demand throughout supply

Sciences I’ll from which dynamics. each witnessed own coming Sample and begin of these sub-segments revenue, them growth cover GENEWIZ. starting Life its GENEWIZ with in separately, sequentially Management. delivered up million X% And $XX I'll with with strong results with

overcome our a advantaged of readers $XX GENEWIZ to to capabilities were our us some genes year-over-year again, curveballs We expectations of which even allowed Once thrown and XX% unique in as increase outperformed delivering million. our by the revenue both writers way.

that were basically where QX you team shutdown. scientists our gene told our of when vast support synthesis. remained a of the It’s operations early China our in of research, we except site COVID-XX in Suzhou First, we majority our site who urgent Suzhou, on for in February results, performed we announced

Although we’d came of were China, much what for been in By was employees customers prolonged were strong. the end operations at our imagined. from XX% And than could in faster have February, back than recovery China a global bracing work. a slowdown, we demand of academia back even without more

bump March for record was synthesis fact, February, over just the In despite speed million. quarter in the $XX a at

but X% a saw growth quarter year-over-year we more sequencing, had quarter of sequential for the then with as NGS quarter the followed months demand half We spike with a in normal volatility orders pattern next-generation weeks in of two growth two and record in by also of the a March, order progressed. of Similarly, in first and XX% consistent of volume. lower first the something

serve. the laboratories much capture. assess we their came time, believe the March and GENEWIZ it and synthesis signals NGS appears as capacity remained That have eager active. in from that result increase steady same synthesis no lower at both NGS the we full remains facing engagements As who synthesis our of from was and both QX core their while capability normal some customer of for NGS but been or existing longer reduced businesses, productivity mixed to projects have for customer the said, slightly the At April that but quite suppliers, order of had from researchers patterns and we was burst

of the of of daily volumes weeks for of we weeks our In labs thousands when most millions business for of April. which shelter of caused we research, quarter, [ph] customers closed that each throughout saw that for more a XX% academic steady than But XX has was quarter. where the and is last Sanger of and average performed the of sequencing, orders the non-essential high-volume many the measurements turns and abrupt place quarter, revenue an overnight persisted level shutdown reduction two first

though decreased back we we industry In XX% still online although one up revenue actually of QX average single year seen the weeks, each of And from and remain during Sanger until below still And past academic reaccelerates. it volumes Sanger total was digits slightly increase average. low come ago. labs daily quarter-over-quarter, lower anticipate QX, four we've revenue

point this say it a that quarter, have be of will early concrete the to any too at signs work. we in meaningful So return to

to return but prepared. be, rest where the a make the upswing. for one we volumes like we environment A of as when terms outlook, business we researchers In until their benches be expect have down prediction back support slightly to on a overall activities will this the gradual in clinical trials that companies towards of more for quarter. opportunities We difficult don't are return our academic GENEWIZ and are model the provides through way that that normal

our In and opportunities support hundreds gave essential projects incredible round-the-clock scientific of QX, in fast research. collaboration acumen, results that COVID-XX with demonstrate challenged customers us turn their us of high-quality to

we addition, run, new on to them than took believe and first-time to GENEWIZ the projects customers this many new in the to add for long customers. that it’s cement urgent over customer We more solving us that issues In attention quarter. enable XXX

from quarter. year in to coronavirus, on even that came turn all this progress return remind areas a Sample environment, margin this with Even was improvement, goals. the and and right very sustainable have disruptions in against Sample solid we I’ll we’re revenue forecast. gross with focus; our growth to of the in Management, pleased I’ll a Now which, QX you double-digit two Management these

QX X% QX. basis was $XX in Moreover, million, up came year-over-year. from X% XXX up Revenue points and at another from margin gross

business on our a these results this be We’re encouraged deliver by it very solidly to gives confidence path is expectations. us that to and on able

our two that organization were XXXX, reacceleration changes QX to growth were focus performance of time track the revenue deliver improvements. to on deliver results, announced structure trajectory more and for the more in we to and and knew a we keep that had on us profitability made things; on set we the we At

foresee complete obviously equipment. our also on had our not our said, open system startups $X headwind our from we customers could the incur approximately of of built to service that for to and inability the teams did mentioned headwind because the that perform did potential million and we employees forecast. field we coronavirus That you we our into Unfortunately, revenue-generating

trends the want few business. do were highlight I as and there accomplishments many said, in quarter to the to That they relate in a

make momentum have those continues buyers. the to Revenue repeat in and into strong our cell cryosystems to build. for systems therapy customers, To six cold and progress. solutions automated continued cryogenics' topped nine chain these gene the of date, quarter BXC different sold applications million three-fourths $X we to been products shipped were Our of and

our the since made we XXXX, consumables to quarter and diagnostics of BioStorage QX added volume encouraged respond used capacity activity additions in our clinical of increased slowdown the capture lines, spite trial largest sell activity should allow This intake business consumables and significant in sample us as COVID-XX fast-turn reinvigoration that instruments increase our of March, activities. In packages we're in of be customer that part will generated for to to capital And to QX. tests in revenue we companies. by

a for actions ever. was the schedule very some and and than The growth upon. come Even related we stronger track, of of was ahead COVID-XX we’ll team active is it our quarter deliberate out right days that with and All-in, to the energized good COVID-XX plan revenue delays, Management. and Sample something profitability build with on of result

is What underway. of amount large and energizes that’s more deal activity level large us customer, even the

deals moved for has and During still working our activity days being engagement no these to the are we've advanced. on Internet of travel, months that customer been

resume currently to final speak opportunities have the two profitability more and our in capabilities dollar and large contracts in [indiscernible] to this pipeline. growth the we and on negotiating business. contracts We confidence These are multimillion

in experienced portfolio. demonstrates close On Semiconductor that's COVID-XX of impact our performance quarter established to as At to small all million the our Semiconductor our which record and new related caused because impact in we more for still industry our the relationship capital of only side, customers. with Semiconductor chain, remarkable in quarterly our supply we the equipment working back And revenue we're a product no spending. $XXX revenue because QX our QX, not an a for highs the value high

and our products packaging contamination automation this attribute of process equipment, outperformance business, continued design with position solutions equipment win to our factors; market steadily capture advanced We the rapidly share which satisfies and OEM evolving high a in our two strong technology a for along control need growing market market. share

specific our business event I’ll to give color drivers control solutions. some and our packaging automation from Semiconductor contamination major

our quarter's and to Our remains robots results. vacuum We last bookings indicating up automation with demand very products in similar had remain record the strong. strong for quarter approximately systems and systems XX% robots vacuum

indicator still activity to is Chinese lower $XX up but than last for and indicator. and to a This ago, packaging both this We percolate, XX% in advanced China. fab uptick capability. from indication packaging opportunities up is in good the or an the Sales to events it’s just QX. in are saw order China in on quarters over quarter Based activity, and picking manufacturers the equipment first packaging especially three general may have one sequential we year do uptick a advanced starting in that be positive some million

control several revenue. give extremely brief a million The XX reasons. strong million business significant delivered a is I’ll record been contamination which as Finally, has on in update our extremely for number $XX we

as In the levels. quarters shipped two much within truly of XXXX tested chain we those of three were last our we already to and healthy and revenue capable. First, determined the very business XXXX, first quarters it be supply

we met spending of the foundry on continued win will finally, schedule for we technologies the customers, as device business us serve subsides. range Tier with expansion X demand additional to a quality. that ramp broad of foundry well high very X-nanometer Second, And and across

more in technology will broader which across orders, back-to-back two of applications. of be in of strong QX very a than be base made but still largely healthy different expect revenue CCS necessarily up and Revenue in we geographies will $XX lower customers million after levels

some supply prepared for said, issues slowing aware we’re are Semiconductor parts. quarter All-in, of COVID-XX some business. delivery that at strong related we’re That also our in another chain

able through remains been the but customers. what demand most actual impact be might from it we’ve issues be these to seen far, So navigate on of to our

to yet ago on of X.X quarter in QX quarter in record global speculation was March quarter book-to-bill revenue we quarter to revenue do a currently allow a our if the June processing any capability our our There’s for chain, Already upon year another backlog would XXXX. June meaningful us the customer deliver and expectations Semiconductor equipment one quarter. and Depending supply lot demand of as up see the XX% outlook was Semiconductor not for Semiconductor record from interruptions.

all need had and June we’re well opportunities solid We but uncertain, on changes even with hit all and All-in, where already diligently today. us a companies. quarter. investing those we’ll confident more in adaptive know in rely the quarter adjusted we very we’re we’re positioned these to We that maybe skills that we’re winning second long-term same that which extremely the

And to remarks, that concludes turn I'll my formal and Lindon. the over call now

Lindon Robertson

the site, of we Thank your I’d Since to our Steve. our on Slide with remarks, also on you, like the hit be his refer headlines on messages see will in Web I starting attention brief what these to X. slides performance. Steve as

slowed we by that First, only momentum had modestly excellent disruptions. COVID-XX has

top, and well remarkably We serve. reliable a ourselves have performed in have both year-over-year supplier revenue every double as we truly market with digit segments growth in established

Life XXX a business finer on segment. enhancements earning Sciences up substantially from Management basis ago. continued To Next, year in the a gross are margins point in it, the Sample nearly performance expanded we points with put

we lies what third, well-equipped And are ahead. for

contributing year. prior of liquidity strong million million. To and cash Our this Semi over profit flow. balance are flow $XX paid year-to-date growth, generation. exclude sides taxes of point, the from cryo cash the is improvement both XX our operations, cash with year-to-date The of the when the and on million sale helping is sheet net This is the business, you cash a and business XXX on healthy are

to review on to overall move X P&L. the Let’s Slide

you shown and the is in growth what point line. what of is revenue comparison. the non-GAAP is on the on similar the different But that left operating different right side. that highlight to income GAAP tax the first me to profile is Let The and earnings in in side

benefit the allowed first we with offsets fiscal performance the quarter. tax swing first back In tax a incentive million The the benefit fiscal GAAP second GAAP, million recognized to the windfall operating expense. quarter in million in first resulted That deduction, quarter, positive tax is a normal the quarter under in $X to the which as is for X picture million X profile. stock divested $X and of the approximately a of units net related guided long-term

In so the you rate projected take across the the performance to XX% performance fiscal year-to-year performance we with windfall use side, tax growth that Continuing can indicator. supported and the you non-GAAP financials results, year see right the quarters per of earnings the this it in apply the of non-GAAP can level a share. for the

nice points with margins gross by came saw Semiconductor. and and improvement top, and Sciences driven business improvement. the gross a basis remained margins Starting softer is a QX each in also Life from growth similar from the But dynamics to progress XX% with at continued The margins On the revenue gross of contribute year-over-year We uptick growing as the are in Semiconductor level each bottom basis, Life approximately bit year-to-year. the Sciences line. similarly sequentially. expected make to uptick in margins all-in, XX

Operating expenses was On R&D the our for up. business. sequential a quarter Semiconductor increase during basis, the were in

engineering year-over-year throughout was been projects $X Our advancing SG&A. R&D team million operating and the has kept customers. environment COVID-XX higher, to with On expense committed both by driven a basis, the busy

transition line, in In primarily was acquisition our RURO recent the from Sciences, structure our Life some ERP single driven additional growth around and the of to cloud-based SG&A IT platform, growth investments software. a including GENEWIZ

$X some and we environment through in result third in million will spending a and approximately in operating onboard expenses While crisis, reductions our quarter. the to extra keep lower travel expense safe with which we $X to anticipate G&A us in are team million COVID the by

you XX% XX% and net sequentially. You expansion. the also can with income the can year-over-year see operating growth expanded Combining non-GAAP expansion, margin margin see grew

acquisition. expense tax about non-GAAP for line, interest the operating the XX%, came year. Moving the for carrying to with consistent quarter of were with last associated our compared net very XX% XXX,XXX lower expectation rate income was $X below with GENEWIZ debt when million year XX% by the we about in The

the second Let’s with to discuss year. organic well. as turn XX% results, million last Slide quarter, to In X with Sciences Sciences to Sciences. grew basis, On Life Life segment now an the over second compared XX% XX revenue starting the grew quarter Life

in the quarter revenue business COVID-XX acquisition first quarter the growing year, had was quarter XX% million includes a of second This GENEWIZ year-over-year which strong from full the comparison XX of the addressed. of with revenue of a impacts since despite of XXXX. full GENEWIZ last that Steve November

quarter. As our gene were GENEWIZ closed from through $X reminder, impact research synthesis strict a New the largely February which GENEWIZ and operations labs that approximately to that estimated quarantine provided Year China COVID-XX in for XX. The had the exception down customers. We shutdown that from the Chinese support were million of restrictions observed an

We fully China operational are market returned. demand and currently the has from largely

when described post see large headwind an installation during store organic we about quarter, the warranty on-site the provided systems X some Management customer did to COVID-XX to and Sample and access lack X% from quarter. and sites. started with the services. of We line in million was in growth we and had our general due expectation delays This

cryo more Year-over-year, in than growth as spots doubled bright Sample were services there well. X%. substantively grew But BioStorage which driven and more was Management by

return the significant path to and growth. teams business BioStorage this the and double-digit large environment, by in engagements to fueling the continued been have very stores in We by wins encouraged the during

data firm revenue customers manage addition, that informatics the solutions time during since and quarter, the RURO bio-sample provides to software the owned million X.X acquired them of the broad pharmaceutical biotech, approximately In workflow business we've cloud-based and of The software in for life in range sectors. second laboratory a mid-February. we healthcare science, contributed RURO.

in we announced press As Life X, March release, we reorganized effective a business. our April Sciences

capabilities. the XX GENEWIZ combined year-to-year showed handling $XX growth leveraging quarter’s is XX%. business combined have BioStorage This this million million We services lab the basis common with and and services business of on of that now sample

X% impact of we segment Sciences this and of million Life Sciences is we have of was estimate Life XX portion that Sciences Life was which constraints, the had X%. remaining avoided the year-over-year. up products negative about would If COVID-XX the products, business the grown The about

XXX line. Management. improved year. quarter the spot bright the performance was nicely driven in basis to on with the in segment last was quarter by The margin in up up XX.X%, gross Sample The the points year-over-year second Another compared improvement

In on instruments our improvement systems, including of and the area the store fact, that’s the been performance cost reductions management and services. improvements, every is and This we BioStorage improved price business, large by services, had systems the the Cryo implemented. Twinbank consumables driven the the and

this and XXX business on drove increased operating The basis year-over-year. The model evident incremental growth and of is leverage quite growth this of segment margin gross covered margin operating of expansion the points in expense page. mode this

third As COVID-XX. we more impacts we the due look cautious into and continued to the varied of quarter, are

demand some As in volatility Steve sequencing. rate sequencing inside sustained synthesis, we've run described, and seen from [ph] Sanger in GENEWIZ next lower a generation the

a is we services. to us access status. academic of world seen to full have installations commercial is of for portion when customer institutions around open continued notable research unclear the Management, in And Sample will only limiting active our return Most fully it that sites teams and absence the the and

in range million to XX lower the we’re to expecting Sciences XX deliver X% revenue this XX% quarter-to-quarter. to which million at of Life So point, about is

review and to second the Let’s business. X Slide Semiconductor X% to for increase turn Semiconductor XX% was quarter, million revenue year-over-year. over an XXX sequentially solutions our of

the to would which into quarter-to-quarter, uptick we to Tier the systems you business details of X OEMs. If look in an were primarily see the you shipped

half which would we more I the is in systems the strength margin. assist atmospheric that that in should expected. gross the systems to line expect as highlight We vacuum coming do second see on

story fabs. the which however, is the solutions line, control in strength user revenue contamination of real the The [indiscernible]

for in many continue quarters and see across orders we are CCS of expansion these qualifications referenced, us to and As fabs. record

The rest of the robots. Semiconductor in story is

as continue half. additional significantly our output second and is to head stable Tier X call is year-over-year we it OEM it customers higher quarter-to-quarter, into While for our

much faced needs. to the second It course but accomplishment in challenges diligence of factory availability, may production in reflects quarter, the customer supply we fact and coordinate appear no

Semiconductor the estimate the revenue was impact that and services the to X due for during approximately million negative We quarter supply of chain on COVID-XX challenges.

positive And the by this. our opportunities. these lost customers surprised are not coordination due side, the delayed efforts, disappointed On to were not nor

were XX% quarter Gross XX the operating improved at similar Semi to about basis and prior in margins margins by points.

As margins we mix improves expect And the second growth gross if market of will the margins in bring to back leverage on the unfolds, model. strengthen. upward half, operating the

to outlook Similar the Life for third Sciences quarter. business, we’re the the cautious about

We some expect our supply chain will continue issues. to face

aside are broader but the the also customers We us our supply users’ end chain for sensitive, when our product. of they from affects timing need

Finally, the can COVID-XX impact end markets of rapidly. the we on change know

to business Semiconductor our of to quarter-to-quarter. XXX million. X% XXX in revenue to expect flat the down This million approximately is range We deliver

over associated XXXX of of tax our Let's XX during quarter. This of flow We Slide over summary the flow turn adjusted a million over to excludes the cash business. generated income quarter. now the of cryo sale payments for X with the cash operating of million gain XX Semiconductor

We also of mentioned for million XX used previously. as approximately RURO, of the acquisition cash

the quarter and Our net XX uses during balance quarter equivalents equivalents and totaled the cash, the the XXX during cash cash the in our operation cash million and it restricted cash of includes facility down change quarter, to XXX Suzhou, brings million. to China. X investments in by CapEx operations for in for new driven GENEWIZ million and approximately amounted primarily Total million

we business. million to GENEWIZ highlight the as the I an the cash million subsequent XX built here Year-to-date, capability in tax our when of divestiture gain business sale on the with the cash of you have before, said year-over-year. Semi exclude increase or operating XX flow was The cryo the is on the of

a will X, see balance summary On of the Slide you sheet.

our can of the we of in and operations at net You XXst marketable securities. XXX customers March fuel us million we will and the strong now for carry times, The these and have of growth million debt, With top cash investments. from confidence position invest that confidence XXX XX see cash column, uncertain investments. million weather will we we us and the employees and provides the sustain the to our gives

summary customers Fundamentals the are and gained Let’s market to of during a business turn share and Slide now X. these we’ve times. on intact

the journey We our preparing and ourselves have ready the the leadership market. is and be to accelerate recovery balance provides The us the with strong, of strategic to the extended fuel continue sheet for flexibility.

in vulnerable. business. chain time have each know In the that on OEM orders growth environment seen chipmakers take. have path saw in comes particular, customers Semiconductor, strong backlog WFE we the down supply depend healthy decide broad we and this but momentum to the the We in also CapEx which to And is

support continues Our Life to Sciences business our business. stepped improving and our to themselves. markets with on their COVID continue new research biotech to and engage request win clinical do The active of for capabilities the pharma, infrastructure they’ve that to up

that across of institutions uncertain to and timing varied the return is work returned research and the academic have the meanwhile, now So, regions.

mixed momentum, ourselves Good signals. find market near-term. continuity with but we demand So uncertain the customer in unusually

clear aspect is have to but But locations. one solid to backlog, uncertain customer that there very We some access us. is

us. We customers opportunity with and the them. that have keep momentum delight to We the momentum with

maintain as resources do markets be the for return. ramp fully our will ready We and

short the we carrying are term, costs. In some

business active during some less have but keep the of to elements this We team time, we’re our going employed.

are labor, facilities delivery stress safe providing clean environment schedules. make to pay that PPE satisfy expediting shipments We and ensuring and premium for a on-site

the some recovery the for be will for working this as as we term we win and will short order. we will prepared the and full are there them of market ramp throughout, We carry to cost additional returns customers in

to be of non-GAAP to the guidance range the diluted of to to is earnings EBITDA be in XXX per Let’s $X.XX XXX for be in cover expected and to XXXX. million share. per to the $X.XX be range anticipated the XX is third will $X.XX. fiscal quarter Revenue million million, adjusted GAAP XX of million share to $X.XX

we Sciences, in Life in markets the the a factored June return For of month.

This prepared line. the back operator, from our to to now call return concludes the questions Malika, remarks, take and over the I'll

Operator

Instructions]. Thank you. [Operator

Ho line go question is of Patrick the first Our with from ahead. Stifel. Please

open. is line Your

Patrick Ho

were everyone volatilities on the terms hope is a these bit really in well first end of disruptions and seeing. Steve, much very your how you quarter they you able and got of steps continuity business you little you your making of the bit little a congrats maybe the challenging been color off just circumstances. customers if a give plans nice fluid the in work, give of Thank Can were on and you you’ve top What that a to took, how first? manage some did that color needed? and sure Tier on what environment could very

Steve Schwartz

question. thanks and Patrick, the for Sure,

a we Specifically lot it our quite out managed a side, get customers. They do at the well. look in supply on we’re the adjust of large the team of They supply chain. then frequently, so base credits And Semi OEM the extremely to us front good able business. give to the

wasn’t I get the everybody are And for team and to well. to past the that X we the something OEMs, over it I become to job company, get everybody that’s them for managed signal transmit years but really the Patrick, accelerate customers without knows inside think fluid. sure, that get this a the problems how knew quickly done. really top suppliers It priority. the deliveries we’re from Tier to and able is When our our think prepared

to we get if do over we we there, time do we spend, So it for something if what it. go shipments

in everybody responded out could and know don’t think they magnitude the period. that’s we action I that was so that model with, think business if we think anticipated into well. And it’s but think played I well. going have extremely place, continuity out through I anybody a I faced And to be team successful have played kicked the of the just the them plans COVID what – I

just two even same fluidity Two a mode. weeks were weeks period, shutdown operating but period. We’re into into the we the with functioning shutdown differently in different really completely the

general, through in work that past base. have So coming we’re to and pockets continue manage Malaysia the now the been are we’ve air weeks. five from from forward should to supply There India, things going that trying the did finding we happened for

weathering I but kinds with same the and I the in supply think and But pretty believe seem you to hear is things from it around the do think in when well. we be everybody we’re all we’re chain, of doing very it dealing well. front team I uncertainty of

Patrick Ho

internally helpful. that’s buffer moving customers going little both we’re [indiscernible] your a given you a side, Lindon maybe bit ensure delivery there. what building that’s keeping and occurring the to Steve maybe margin very of holding chain out you on staying as to are the side see Semi pieces your well the yourself Great, of your of managing as profile, are your little given well my the bit the as given uncertainty? of management that as lot supply uncertainty on a guess it’s as it up customer terms question follow-up Can or buffer market the And inventory in well Semi How I are actually things. for inventory discuss all of

Steve Schwartz

good a question. It’s

fronts. So on communications have on been I has the most biggest all that the see is hopefully fluid inventory the say to satisfying thing front, change to and the one the

with this. is basis happening our on the daily I a chain on of intense is and communications customers say leader supply I the chain supply as think would well pretty So as

operating multiple he’s time zones. So

force, chain the that here. been required most those not if had a key we marry situation labor has particular are priorities that or our aspect parts, given force. at supply our is we��ve labor our tying then this been they of exercising they if and latitude modest them resolvable. we’ve with have very And been force out So if what and they – [ph] we’re high-risk constraints to home We’ve we concern don’t be our have a have specific have labor and that

part force large here. been our in has However,

So those things customers. the of to we priorities marry the

much to point a into in decided to buffers? million I’d million, third we’re because where the to the environment. supply X about is we that see we of have in it’s we call as in it that X We have sure what when sure have the put make securing momentum need your investment we as inventory couple we strong we not third to into what quarter go do making of quarter Now, need this million chain in to it need ramp, we which – but suggest

some in putting we’re exercising So buffers ours.

customer our inventory we’re seeing front, levels. respectable on think I

we’re slow demands seeing seeing not put either. anybody just high anybody but not things We’re pull in to down

make question. front. part covered want on did to another balanced that question I Patrick, it’s that So I missed? have think I there I pretty sure your you your of

Patrick Ho

No, that very well. – that was you’ve answered

the clearly levels own it much. managing given your answered how You inventory you in That’s it terms from of or so. uncertain marketplace me. very Thank

Steve Schwartz

Patrick. you, Thank

Operator

you. Thank

line question Stephens. with Jacob ahead. Johnson Our the Please next is of from go

Your line open. is

Jacob Johnson

thoughts I Sample on first business and interested question your on synergies questions. the latest GENEWIZ. just taking guess the between the for Services be Thanks

to your guess between more you these managed customers use way businesses And are single or there seeing to I is being unit, versa? if services Management overlap Sample bases? that as are any now customer a vice these Now are GENEWIZ beginning quantify

Steve Schwartz

Yes. Hi, Jacob.

you give So the background and me about little bit then to you a talk of here let future.

in, often related prepare work prepare get disease samples, in particular collection, data would a And And did historically, we something long-term the the ongoing Indianapolis BioStorage samples this those business the the a store samples we’ve alliance that’s studies, the of give in with the and on of of that this study. with often the customer Rutgers to with XXXX. when for at team acquisition is came do are the the the kit, a there So, had is business Rutgers the to alliance. BioStorage number number and there, in combination related the the to we University, samples, that measurements storage. projects the have particular then are a And called team

add a you acquisition model growth go without the full large we any such with we you and get to business We we And on – GENEWIZ them and keep other that to we understand. services get In there’s presence synergies tear a left continue an we integration. words, we three with a and alliance. version sales the to the that have bigger an that to and to eye but for the a capability the of had laboratory would growing, force, increase broader GENEWIZ integration would global the is business. which the which for we allowed them intentionally a allow in can idea all an about time speed expansions did amount be them between imagine in have of there’s we a incredible acquisition was their roots. capital scientific much time it’s So of what GENEWIZ, Sample that the much now and a with Management

eye Liao brought focus really both I these to business this work to get business, capture team has how to think businesses it. So this to unit. to under had we’ve their – accelerated and an And go identify how about now this with effort business how unit putting this Amy the go of customer always to the after it, in on

to not see for. over going next the wait something So we’re you’ll it’s years – quarters

or inside successful. engaged, heads a for You’ll Eckenrode see run you, one of for think GENEWIZ the some she that GENEWIZ, we’ll start took and She that took you organization to they responsibility with the Sanger and is will person the number BioStorage of we the change, to is particularly I we unit years. well be know CEO will tremendous be on team’s until On already. over. Sarah next also report April over them one The In about change. Amy to tremendously note speed the And had. them BioStorage. here it win Liao GENEWIZ. for now Amy been it’s which they’ve know of business just other Co-Founder who’s had synergies Amy now a quarters they business are the of she XX because the Dr. we working responsible contracts business. with and X, think took will

So well. the services head Sarah incredibly BioStorage understands as of GENEWIZ the business

opportunities. to identify us help she’ll so And and capture those

standpoint, knowledge a the samples exciting side. opportunities put to We energy see able and to samples the it for And be some business GENEWIZ QX. of to here think the I from hope and think you QX a of there’s lot better. be the couldn’t we structure new that. report into So on good We do in

Jacob Johnson

Got color, it it. Thanks leave I’ll the there. Steve. for

Steve Schwartz

Okay.

Operator

you. Thank

question go Our the of line Needham. Steve Please ahead. from with next is Unger

open. is line Your

Stephen Unger

all the Hi. expanded Are Thanks. performance understand to projects these and one had just just you are that online? to wanted of I GENEWIZ. relative of I related question. synthesis gene came capacity COVID the how the doing

Lindon Robertson

from what first China, thing is that – that but proud we Here’s was call not highlight in It in to tragedy U.S. element the makes so demand but done that. the on the team that synthesis we analysis, the is the help COVID. There the synthesis and sequencing has proud impacted is would nobody the for but were UK. the one first that solely And not what was demand made China [indiscernible] was we obviously, GENEWIZ the from in just the I likes fact well, the – but continued, beginning. on through COVID first research gene it necessary were were it is team took and also

And we’re other engagements as continue. to for projects are demands would highlight synthesis well on seeing continue. We I gene seeing

It’s mix. So a a a got of quarter. core nice It’s our this is business. part record

I that in step. think the that the record usefulness service and in there the provides reflects the research the business momentum

I to will expand, I our own a have. of samples after reagent. of for been labs, sensitive space, freezers lab the terms row are in And we continue for we to just we in the around reagents most as make work have have labs amount the on know say those That’s factor the equation that have as from that equipment our then critical business sure on to R&D the the and capital in. that you our But the synthesis, on row have scheduled that come Now lab capacity sequencing to place. you skills, side. freezers do who as in of put fair you day characterize capacity put with expansion to pretty been in have a steady I us has and It’s variable one. us storage run other

So sure is there the all capacity it, of in this each we but region. make factors into

Steve Schwartz

synthesis. so we not lab clear, it’s small where moved the place, important do they what as business. capacity dollar not relatively we the To but European the the COVID up be projects put synthesis into were set we one, the were And needle in volume,

for and analysis for purely Sanger was that NGS. So

expansion. a Jersey, major New we did NGS

some place. the – already we in already not ability China in had major which you to other we deliver in us already building is and the We in So capacity of Suzhou, is And more have in synthesis Sanger had so functional. saw NGS. that capacity the yet still investment for place

the So business that we continue on can to synthesis add without capital now. having to for right grow side

Stephen Unger

Great, Thank all right. you.

Operator

you. Thank

ahead. Our of is from the Amanda next line Citi. Please go with question Scarnati

open. is line Your

Amanda Scarnati

and for we in I where I Semiconductor the earlier the year taking little in X to year, of Hi. know expect want you Thanks the a coming talked at year. to Tier in about replacing picking from should sort just – demand demand China from about the that question. bit XXXX. start talk that seen sort that this on? see just of Tier and to or of we any some up if expect X Tier X to you continue at of demand see that were Korea all Have of pickup more

Steve Schwartz

the lull had see two we two do last picking were ago. had activity quarters. Amanda, about in see up. but China. on actually. So, China We an uptick was We lull significant, a the We we pretty call. It both a We quarters talked over

pretty factory in it’s in results very like is QX activity QX. certainly we tough the healthy China from see further the say the visibility for healthy. see And CCS representative It’s OEMs. at end we’d days Tier of any and that. But any than level for remain have. X the for normally – we We have user both these our what to So backlog, don’t what different products

Amanda Scarnati

Great. Thank you.

Steve Schwartz

Amanda. Thanks,

Operator

Thank you.

question from Montgomery. with Paul Please next of is Janney Our the Knight go ahead. line

open. is line Your

Paul Knight

here say would GENEWIZ was was XQ? or part what Hi, will quarter, that impacted in most in you Steve. right, I Sanger the be guess of the

Steve Schwartz

us way, seems capture and until which academic feels this Lindon the it June for for We the of and know the share that if some to it’s unless put is quarter. going, some and think really slow and But either and good. but healthy to aren’t I well. We Since pretty facilities Yes, at Again, that’s open, really steady has volatility Sanger be could up a been swinger low industry the customer like swing know it a tremendous. labs down. pick that relatively gets would us level. just NGS

Paul Knight

Okay. Thanks.

Steve Schwartz

Thanks, Paul.

Operator

you. Thank

of question next John line Suisse. from with Please is ahead. Our go the Pitzer Credit

is Your line open.

John Pitzer

like just good then Congratulations comments pose trying some get afternoon, department and week the kind embedding that risk prepared this given for on is what to view your million environment. about It number and came commerce your revenue a to from And licensees of or I’m better relative operating million quarter just a potentially was what that June business guys. of kind intensifying into Semi on perhaps quarter. the right? March hit the just out curious. business, sounds of and curious I’m said might to that the to earlier indirectly? Good your China your just COVID X for March results the of in I’m X the understanding what directly

Steve Schwartz

Yes.

million and business, consumable we the of of or to factor in we on PCR on made the of have DNA could and total were million including first with estimate it COVID on total rounds the opportunities that it disrupted in driven the you for shipments in X could it’s netted on Generally about customers our or that side Sciences analysis. talking to prioritization had the some what from on X another. fluidly. research the most But plates – million one a been net we not Semi impact, supply impacts referenced that’s Life also of that chain shift the provide more in X So a is

that shape absence gets put equation does a demand on demand Frankly, been reshaped we more because how what disrupted coming was us market. we and QX? well, the bit challenging John, QX QX to know the and know QX, into up it defined asked, has number the you for a So quite by of

expected were grow sequentially COVID environment. absent tell can the I question say I any all. you will at both Life that without And elements So without hesitation Sciences to

this sequentially. and well a market we’ve Sciences. to to us when know, us. new impact it business as a a us X% and in to it’s we similarly On think when it’s we about so embraced -- for down sorry, And customers we on an you of being through design pretty the in impacting that get it’s I’m significant significant flat impact number XX%, fact talk see Life X% think We don’t I Semiconductor, don’t

However, we global the to everybody’s happens all see know what that economy investments. watching semiconductor with

any now, a demand. ask a we reschedule in For change or had haven’t one delay a for or

to it. reiterating customers us, our demand their and more still emphasizing In are fact, need we in us to active

and all What crisis can that steam also ensure still Semi in steam is if from endpoints need And sometimes need? messages help customers are lived customer How long we it. full it ahead. full us do in the sometimes conditioned making a coming? So we’re our is ahead that it’s changes. that to you Our

it’s that’s economically. time we say So a why vulnerable

me one on a that Let and and see pause I’ll address the question have regulations. you if

John Pitzer

That’s a perfect answer.

commerce, If regulations? you the BIS can about just talk

Steve Schwartz

Yes.

So much. but we are it it’s is us affecting our assessing preliminary reading is, very not

assessments anticipate – not those that license any systems we to under three you is scrutiny And if plus won’t licenses. early So – were able ago, affected. that that under back for and individual that to require don’t requirement we years qualify we had notably, went be and most were directly have We other that longer. we and

John Pitzer

Thank you, guys.

Steve Schwartz

All right. Thanks, John.

Operator

at are this Thank no there questions you. further time. And

Steve Schwartz

your analysts and really let without healthy hope the we the on just hear and all unusual way no you environment. question that finish in to an started. indication If Okay. this me families us with we’re that the that’s times. are we One, solid questions, more It’s pleased and call

response an more through disturbing same couldn’t times has mission straight essential very been for and marched at engaged. us to you what Life unusual need be encouraging. will And we Semiconductor from and Sciences from businesses, two in the want they but team us energizing stayed has that and they I the are fully be our we proud customers tell these time working and has and support what and that energizing have; with their it is

and what faster we excited this we the up. when our of continues anticipate, quarter But are. fundamentals quarter a than improve and look get we and confidence in to in through we walking stay the that And we place end And what hope have delivering and longer that we’re then position of forward to a about on stronger year talk that we’ll through this we it shapes term lot the this we’re that certainly guidance.

So you interest with us. thank your very for much

Operator

this you lines. that Thank participation conclude call. your and your gentlemen, disconnect please for We you. does Ladies thank ask and today’s you