Segment and Geographic Information

12 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment and Geographic Information

18.    Segment and Geographic 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 has two operating and reportable segments consisting of (i) Brooks Semiconductor Solutions Group segment and (ii) Brooks Life Science Systems segment. Prior to fiscal year 2016, the Company had three operating and reportable segments that consisted of Brooks Product Solutions segment, Brooks Global Services segment and Brooks Life Science Systems segment. During fiscal year 2016, the Company reorganized its reporting structure into two operating and reportable segments. The Company’s reportable segment information for the fiscal year ended September 30, 2015 has been reclassified to reflect the current segment structure and to conform to the presentation of information for fiscal years ended September 30, 2017 and 2016. The accounting policies of the operating segments remained unchanged as a result of the realignment.

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, tool automation systems that provide precision handling and clean wafer environments, contamination control of wafer carrier front opening unified pods, as well as cryogenic pumps and compressors that provide vacuum pumping and thermal management solutions used to create and control critical process vacuum applications. The support services include repair services, diagnostic support services, and installation services in support of the products, which enable our 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 Science Systems segment provides comprehensive life cycle sample management solutions for life science and bioscience customers 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 manage samples throughout our customers’ research discovery and development work flows. The segment’s service offerings include sample storage and support services provided to a wide range of life science customers, including pharmaceutical companies, biotechnology companies, biobanks and research institutes.

The Company evaluates the performance and future opportunities of its segments and allocates resources to them based on their revenue, operating income (loss) and returns on invested assets. Operating income (loss) for each segment includes selling, general and administrative expenses directly attributable to the segment. Amortization of acquired intangible assets (excluding completed technology), restructuring and other charges, pension settlement, in-process research and development, as well as other unallocated corporate expenses are excluded from the segments’ operating income (loss). The Company’s indirect overhead costs, which include various general and administrative expenses, are allocated among the segments based upon several cost drivers associated with the respective administrative function, including segment revenue, headcount, or benefits that each segment derives from a specific administrative function. Segment assets exclude cash, cash equivalents, marketable securities, deferred tax assets, assets held for sale and equity method investments.

The following is the summary of the financial information for the Company’s operating and reportable segments for the fiscal years ended September 30, 2017, 2016 and 2015 (in thousands):

	Brooks		Brooks
	Semiconductor		Life Science
	Solutions Group		Systems		Total
Fiscal Year Ended September 30, 2017
Revenue
Products	$	466,871	$	66,753	$	533,624
Services		77,305		81,956		159,261
Segment revenue	$	544,176	$	148,709	$	692,885
Gross profit	$	212,652	$	54,752	$	267,404
Segment operating income		86,716		4,695		91,411
Depreciation expense		5,052		4,694		9,746
Assets		325,408		306,666		632,074
Fiscal Year Ended September 30, 2016
Revenue
Products	$	375,237	$	46,546	$	421,783
Services		76,973		61,567		138,540
Segment revenue	$	452,210	$	108,113	$	560,323
Gross profit	$	159,018	$	39,063	$	198,081
Segment operating income (loss)		37,926		(6,451)		31,476
Depreciation expense		4,788		3,496		8,284
Assets		317,717		247,735		565,452
Fiscal Year Ended September 30, 2015
Revenue
Products	$	406,579	$	50,832	$	457,411
Services		78,058		17,239		95,297
Segment revenue	$	484,637	$	68,071	$	552,708
Gross profit	$	171,379	$	17,726	$	189,105
Segment operating income (loss)		49,695		(19,580)		30,115
Depreciation expense		4,312		1,295		5,607
Assets		317,069		110,910		427,979

The following is a reconciliation of the Company’s operating and reportable segments’ operating income and segment assets to the corresponding amounts presented in the accompanying Consolidated Balance Sheets and Consolidated Statements of Operations for the fiscal years ended September 30, 2017, 2016 and 2015 (in thousands):

	As of and for the Year Ended
	September 30,
	2017		2016		2015
Segment operating income	$	91,411	$	31,476	$	30,115
Amortization of acquired intangible assets		13,929		10,799		7,656
Restructuring charges		3,226		12,039		4,713
Other unallocated corporate expenses		10,143		4,400		856
Total operating income	$	64,113	$	4,238	$	16,890

	September 30,		September 30,
	2017		2016
Segment assets	$	632,074	$	565,452
Cash, cash equivalents and marketable securities		104,292		91,221
Deferred tax assets		1,692		1,982
Equity method investments		28,570		27,250
Total assets	$	766,628	$	685,905

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 fiscal years ended September 30, 2017, 2016 and 2015 are as follows (in thousands):

	Year Ended September 30,
	2017		2016		2015
North America	$	242,331	$	209,727	$	199,103
Asia / Pacific/ Other		327,864		247,241		231,840
Europe:
United Kingdom	$	42,138	$	36,611	$	32,160
Rest of Europe	$	80,552	$	66,744	$	89,605
	$	692,885	$	560,323	$	552,708

The majority of the Company’s net revenue in North America is generated in the United States which amounted to $240.6 million, $208.3 million and $197.4 million, respectively, during fiscal years ended September 30, 2017, 2016 and 2015.

Property, plant and equipment by geographic area as of September 30, 2017 and 2016 are as follows (in thousands):

	September 30,
	2017		2016
North America	$	52,235	$	49,505
Asia / Pacific / Other		676		952
Europe		5,551		4,428
	$	58,462	$	54,885

Property, plant and equipment located in the United States amounted to $52.0 million and $49.3 million, respectively, at September 30, 2017 and 2016.