Conference Call First Quarter Financial Results ...

Azenta, Inc. (NASDAQ:AZTA) Q1 2024 Earnings Conference Call February 7, 2024 4:30 PM ET Company Participants Sara Silverman - Head of Investor Relations Stephen Schwartz - President and Chief Executive Officer Herman Cueto - Chief Financial Officer Conference Call Participants David Saxon - Needham Jacob Johnson - Stephens Andrew Cooper - Raymond James Paul Knight - KeyBanc Vijay Kumar - Evercore ISI Yuan Zhi - B. Riley Operator Greetings, and welcome to the Azenta Q1 2024 Financial Results. [Operator Instr ...

Table of Contents 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: December 31, 2023 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 AZENTA, INC. (Exact name of registrant as specified in its charter) Delaware 04 ...

The Ultra features a breakthrough eco-friendly cooling system utilizing natural air rather than manufactured, ozone-depleting refrigerants, enabling a zero ozone depletion potential (ODP) and zero global warming potential (GWP), two factors that are key to sustainability needs and initiatives within life sciences industries and applications. The innovative, eco-friendly, refrigeration technology also reduces electric power consumption by 70% with a similar reduction in storage system footprint (compared to ...

Company Overview - Azenta Inc is a leading global provider of life sciences solutions, enabling faster breakthroughs and therapies to market [2] - The company offers a full suite of cold-chain sample management solutions and multiomics services across drug development, clinical research, and advanced cell therapies [2] - Azenta serves top pharmaceutical, biotech, academic, and healthcare institutions worldwide [2] - The company operates globally with headquarters in Burlington, MA and operations in North America, Europe, and Asia [2] - Azenta's portfolio includes industry-leading brands such as GENEWIZ, FluidX, Ziath, 4titude, Limfinity, Freezer Pro, Barkey, and B Medical Systems [2] Investor Relations - Azenta will host an Investor Day on March 14, 2024 in New York City [1] - The event will feature presentations from the executive leadership team outlining the company's strategy and vision [1] - A live webcast of the Investor Day will be available on Azenta's website from 9:00 AM to 12:00 PM ET [1] - A replay of the audio webcast will be accessible on the website after the event concludes [1] Contact Information - Sara Silverman serves as Head of Investor Relations & Corporate Communications [3] - Sherry Dinsmore is another key contact for investor relations [3]

Revenue and Growth - Revenue for the fiscal year ended September 30, 2023, was $665.1 million, a 20% increase compared to $555.5 million in 2022, primarily driven by a 53% growth in the Life Sciences Products segment due to acquisitions [162]. - Total revenue for the fiscal year ended September 30, 2023, was $665.1 million, a 19.7% increase from $555.5 million in 2022 [192]. - Life Sciences Products segment revenue increased by 53% year-over-year to $305.2 million, primarily due to acquisitions, while excluding acquisitions, there was a 9% decline in revenue [194]. - Life Sciences Services segment revenue grew by 1% year-over-year to $359.9 million, driven by growth in the SRS business, offset by a decline in Genomics Services [195]. - Revenue related to COVID-19 for the fiscal year 2023 was approximately $7.7 million, down from $22 million in 2022, reflecting decreased demand for COVID-19 related products [195]. - Revenue generated outside the United States was $310.0 million, representing 47% of total revenue for fiscal year 2023, up from 36% in 2022 [196]. - The company anticipates continued revenue growth from both internally developed products and potential future acquisitions [195]. Profitability and Loss - Gross profit for fiscal year 2023 was $263.1 million, resulting in a gross margin of 39.6%, down from 46.0% in the prior year, attributed to higher costs from the acquisition of B Medical [164]. - Operating loss for fiscal year 2023 was $73.1 million, compared to a loss of $24.7 million in 2022, driven by reduced gross margin and increased operating expenses [164]. - The company reported a loss from continuing operations of $12.9 million for fiscal year 2023, compared to a loss of $11.3 million in 2022 [164]. - Operating loss for Life Sciences Products segment was $30.3 million in fiscal year 2023, compared to an operating income of $11.0 million in the prior fiscal year, indicating a significant decline [200]. - Operating loss for Life Sciences Services segment was $14.7 million in fiscal year 2023, compared to an operating income of $10.8 million in the previous year, reflecting a significant downturn [202]. - The net loss from discontinued operations for fiscal year 2023 was $1.4 million, compared to a net income of $2.1 billion in fiscal year 2022 [218]. - The company reported a basic net loss per share of $(0.22) for the year ended September 30, 2023, compared to earnings per share of $28.48 in 2022 [266]. - Net income for the year 2023 was a loss of $14,257 thousand, compared to a net income of $2,132,859 thousand in September 2022 [272]. Expenses - Selling, general and administrative expenses rose by $64.8 million in fiscal year 2023, largely due to the acquisitions of B Medical and Barkey [164]. - Research and development expenses increased by $6.4 million, while selling, general, and administrative expenses rose by $64.8 million, largely due to the addition of B Medical [199]. - Research and development expenses increased to $33,956,000 in 2023 from $27,542,000 in 2022, highlighting a focus on innovation [266]. - The company recorded an adjustment to the fair value of contingent consideration related to B Medical amounting to $18.5 million, which partially offset increased expenses [199]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2023, were $678.9 million, with total cash, cash equivalents, and marketable securities amounting to $1.134 billion [223]. - Net cash provided by operating activities was $17.5 million for fiscal year 2023, a significant improvement from a net cash outflow of $466.0 million in fiscal year 2022 [225]. - Cash provided by investing activities was $431.4 million in fiscal year 2023, primarily from $1.1 billion in sales and maturities of marketable securities [229]. - Cash outflows for financing activities totaled $844.1 million in fiscal year 2023, mainly due to share repurchase authorization [231]. - As of September 30, 2023, the company had no outstanding debt on its balance sheet [233]. - The company has not paid any dividends since the sale of the semiconductor automation business on February 1, 2022, and had previously paid a quarterly dividend of $0.10 per share totaling $7.5 million in December 2021 [234]. - The Board of Directors approved a new share repurchase authorization of up to $1.5 billion, with $662.0 million remaining available for additional repurchases as of September 30, 2023 [235]. - In the fiscal year ending September 30, 2023, the company repurchased 17.5 million shares of common stock for $838.5 million [235]. Assets and Investments - Total current assets decreased to $1,418,956,000 from $2,459,346,000 year-over-year, indicating a reduction in liquidity [263]. - Total stockholders' equity decreased to $2,534,500,000 from $3,363,386,000, reflecting the impact of the net loss on shareholder value [264]. - As of September 30, 2023, total stockholders' equity was $2,534.5 million, a decrease from $3,363.4 million in the previous year [275]. - The company had non-cancelable commitments of $73.5 million as of September 30, 2023, including $51.3 million for inventory and $22.2 million for IT-related commitments [237]. - The company’s retained earnings as of September 30, 2023, were $1,641.0 million, reflecting a decrease from the previous year [275]. Acquisitions and Business Changes - The company completed the acquisition of B Medical Systems on October 3, 2022, enhancing its cold-chain capabilities for temperature-sensitive samples [157]. - The acquisition of B Medical Systems S.á r.l. was completed for a purchase price of $432.2 million, with $100.6 million of completed technology recorded as an intangible asset [256]. - The company changed its name from "Brooks Automation, Inc." to "Azenta, Inc." following the sale of its semiconductor automation business for $2.9 billion on February 1, 2022 [160]. Market and Customer Insights - The Company's ten largest customers accounted for approximately 30% of consolidated revenue for the fiscal year ended September 30, 2023 [296]. - One customer from the Life Science Products segment accounted for more than 10% of consolidated revenue in fiscal year 2023, shipping to end users in approximately 50 countries [296]. - The Company regularly monitors creditworthiness and believes it has adequately provided for potential credit losses [296]. Financial Reporting and Accounting - The company records income taxes using the asset and liability method, recognizing deferred tax assets and liabilities for future tax differences [343]. - Basic income or loss per share is determined by dividing net income by the weighted average common shares outstanding during the period [346]. - The company adopted ASU 2022-06, extending relief related to reference rate reform through December 31, 2024, with no significant accounting impact on consolidated financial statements [347].

Azenta, Inc. (NASDAQ:AZTA) Q4 2023 Earnings Conference Call November 13, 2023 4:30 PM ET Company Participants Sara Silverman - Head of IR Steve Schwartz - President and CEO Herman Cueto - CFO Conference Call Participants David Saxon - Needham Jacob Johnson - Stephens Andrew Cooper - Raymond James Paul Knight - KeyBanc Vijay Kumar - Evercore ISI Yuan Zhi - B. Riley Operator Thank you, and welcome to the Azenta Q4 2023 Financial Results. During the presentation, all participants will be in a listen-only mode. ...

Conference Call Third Quarter Fiscal 2023 Financial Results ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $166 million, representing a 25% increase year-over-year and a 2% increase on an organic basis [22][24] - Non-GAAP earnings per share was $0.13, with adjusted EBITDA margin at 7.8% [23][26] - Operating expenses increased by $20 million year-over-year, primarily due to acquisitions and investments in sales and R&D [25][26] Business Line Data and Key Metrics Changes - Services segment revenue was $91 million, up 7% year-over-year, with organic growth of 8% [28] - Genomics business grew by 8% year-over-year, driven by strong performance in next-generation sequencing and gene synthesis [11][29] - Product segment revenue was $75 million, up 57% year-over-year, but organic growth declined by 9% due to softness in consumables [27] Market Data and Key Metrics Changes - The company reported strong growth in China, with Q3 growth close to 20% [42][67] - The sample repository solutions business grew 6% year-over-year, led by double-digit growth in storage [13][28] - The C&I business experienced a decline of 24% year-over-year, impacting overall performance [50] Company Strategy and Development Direction - The company is focused on aligning sales with customer decision-makers and enhancing operational efficiency through a new reporting structure [9][10] - A significant share repurchase program is underway, with over $672 million spent year-to-date [30][20] - The company is evaluating potential acquisition targets as part of its growth strategy [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to sustainable growth patterns, particularly in the synthesis business [12][21] - The company anticipates a revenue growth range of 17% to 20% for the full fiscal year [34] - Management noted ongoing softness in the C&I business but remains optimistic about the overall portfolio's performance [45][50] Other Important Information - The company launched several new multi-omics services, enhancing its offerings in the genomics space [12][14] - A new bio repository location is set to open in Greater Boston, expanding the company's sample storage capacity [13] - The company reported positive free cash flow for the first time as a standalone life sciences company [10] Q&A Session Summary Question: Synergies between combined segments and cross-selling opportunities - Management highlighted the natural alignment of sample management and automated stores, enhancing customer asset management capabilities [38][39] Question: Trends in China - Management reported strong growth in China, with Q3 growth around 20% and continued momentum into Q4 [42][67] Question: C&I portfolio recovery and destocking impacts - Management indicated ongoing destocking but noted a healthy C&I business, with expectations for recovery in the future [45][46] Question: Genomics business performance and market share - Management confirmed strong growth in genomics, with NGS up 13% and gene synthesis up 9%, while Sanger remained flat [56][57] Question: Impact of recent events in China on operations - Management stated that recent floods in China have not impacted operations or demand, maintaining a positive outlook [67] Question: Base business outlook for Q4 - Management expects the base business to be up about $1 million quarter-to-quarter, with specific guidance on B Medical orders [62][64]

Revenue Performance - Revenue for the three months ended June 30, 2023, increased by 25% to $165.9 million compared to $132.7 million for the same period in 2022, driven by a 57% increase in the Life Sciences Products segment[205]. - Revenue for the nine months ended June 30, 2023, increased by 18% to $492.7 million compared to $417.9 million for the same period in 2022, primarily driven by a 48% increase in the Life Sciences Products segment[206]. - Revenue generated outside the United States for the three months ended June 30, 2023, was $76.1 million, representing 46% of total revenue, up from $44.8 million or 34% in the prior year[214]. - Life Sciences Products segment revenue for the nine months ended June 30, 2023, increased by 48% to $223.1 million, while Life Sciences Services segment revenue increased by only 1% to $269.6 million[215][219]. - COVID-19 related revenue for the nine months ended June 30, 2023, was $6.0 million, a significant decrease from $21.0 million in the same period of 2022[218]. - Life Sciences Products revenue for the three months ended June 30, 2023, was $26,524 thousand, a 68.6% increase from $15,746 thousand in the same period of 2022[243]. - Life Sciences Services revenue for the three months ended June 30, 2023, was $41,204 thousand, up 18.4% from $34,677 thousand in the same period of 2022[243]. Gross Margin and Operating Income - Gross margin for the three months ended June 30, 2023, was 41.0%, down from 44.9% in the same period of the prior year, primarily due to higher costs and amortization related to the acquisition of B Medical[205]. - Gross margin for the nine months ended June 30, 2023, was 39.6%, down from 47.2% in the same period of the prior year, primarily due to higher costs and an unfavorable mix in the Life Sciences Products segment[206]. - Total adjusted operating income for the nine months ended June 30, 2023, was a loss of $14.4 million, compared to an adjusted operating income of $26.9 million in the prior year[222]. - Adjusted operating margin for Life Sciences Products decreased by 2.8 percentage points for the three months ended June 30, 2023, compared to the prior year[225]. - Life Sciences Products segment adjusted operating income decreased by $17.0 million, with an adjusted operating margin decline of 10.2 percentage points for the nine months ended June 30, 2023, compared to the prior fiscal year[228]. - Life Sciences Services segment adjusted operating income decreased by $24.2 million, with an adjusted operating margin decline of 9.0 percentage points for the nine months ended June 30, 2023, compared to the prior fiscal year[229]. Operating Expenses and Losses - Operating loss for the three months ended June 30, 2023, was $15.8 million, compared to a loss of $5.1 million for the same period in 2022, mainly due to reduced gross margin and increased operating expenses[205]. - Operating expenses for the nine months ended June 30, 2023, increased by $44.0 million compared to the same period in 2022, with selling, general, and administrative expenses accounting for a significant portion of this increase[206]. - The company recorded a net loss of $1.9 million from discontinued operations for the nine months ended June 30, 2023, compared to a net income of $2.2 billion for the same period in 2022[206]. - Operating loss for the three months ended June 30, 2023, was $15.8 million, compared to an operating loss of $5.1 million in the prior year, attributed to higher operating expenses of $19.2 million[224]. Acquisitions and Investments - The company acquired B Medical Systems and Ziath Ltd. to enhance its product offerings and cold chain capabilities, supporting its growth strategy in the life sciences sector[198]. - Selling, general, and administrative expenses increased by $54.6 million for the nine months ended June 30, 2023, largely due to the acquisitions of B Medical and Barkey[227]. - B Medical was acquired in October 2022, representing 2% of total assets and 17% of total revenues for the nine months ended June 30, 2023[274]. Cash Flow and Financial Position - Net cash used in operating activities for the nine months ended June 30, 2023, was $22.4 million, a significant decrease from $475.7 million in the same period of 2022[262]. - Cash and cash equivalents as of June 30, 2023, totaled $733.4 million, an increase from $658.3 million as of September 30, 2022[261]. - Net cash provided by investing activities for the nine months ended June 30, 2023, was $328.9 million, compared to $1,840.1 million in the same period of 2022[262]. - The company has authorized a new share repurchase program of up to $1.5 billion, replacing the previous $50 million program[263]. - As of June 30, 2023, the company repurchased 4.0 million shares for $172.1 million under the new arrangements, with $828.0 million remaining available for additional repurchases[263][264]. - An additional 2.0 million shares were repurchased for $91.6 million subsequent to June 30, 2023[264]. Tax and Legal Matters - The effective tax benefit for the nine months ended June 30, 2023, was $9.1 million, primarily driven by pre-tax losses and a deferred tax benefit from a tax incentive in China[252]. - The company is subject to various legal proceedings but believes none will have a material adverse effect on its consolidated financial condition or results of operations[277]. Foreign Currency and Commitments - Approximately 24% of total sales during the nine months ended June 30, 2023, were in currencies other than the U.S. dollar, primarily from foreign subsidiaries[271]. - The company incurred foreign currency gains (losses) of $(0.1 million) during the nine months ended June 30, 2023, compared to $1.9 million in the same period of 2022[272]. - The company had non-cancellable commitments of $70.8 million as of June 30, 2023, primarily for inventory and IT-related commitments[267].