Azenta(US:AZTA)2023-08-08 16:00Revenue 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].