Segment Information

9 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Information

15. Segment Information

The Company operates in two reportable segments: the Brooks Semiconductor Solutions Group segment and the Brooks Life Sciences segment. Brooks Life Sciences consists of two 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.

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 Consolidated Balance Sheets as of June 30, 2020 and September 30, 2019 (in thousands):

	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