Aug 6, 2024 SOURCE: PR NewsWire
Azenta Reports Third Quarter Results for Fiscal 2024, Ended June 30, 2024
BURLINGTON, Mass., Aug. 6, 2024 /PRNewswire/ -- Azenta, Inc. (Nasdaq: AZTA) today reported financial results for the third quarter ended June 30, 2024.
Quarter Ended
Dollars in millions, except per share data June 30, March 31, June 30, Change
2024 2024 2023 Prior Prior
Qtr Yr.
Revenue from Continuing Operations $
173 $
159 $
166 9 4
% %
Organic growth 5
%
Sample Management Solutions $
81 $
74 $
75 9 7
% %
Multiomics $
64 $
62 $
64 2 (0)
%
%
B Medical Systems $
29 $
23 $
27 25 7
% %
Diluted EPS Continuing Operations $
(0.12) $
(2.47) $
(0.04) 95
% nm
Diluted EPS Total $
(0.12) $
(2.47) $
(0.02) 95
% nm
Non-GAAP Diluted EPS Continuing Operations $
0.16 $
0.05 $
0.13 nm 25
%
Adjusted EBITDA - Continuing Operations $
18 $
9 $
13 89 39
% %
Adjusted EBITDA Margin - Continuing Operations 10.3 5.9 7.8
% % %
Management Comments
"We delivered another solid quarter with above market growth, that together with the disciplined execution of our transformation initiatives, contributed to meaningful margin expansion and increased profitability," said Steve Schwartz, President and CEO. "We are delivering not only to outsized growth, but also the operational transformation that will enable long-term scale, efficiency, and profitability for Azenta."
Third Quarter Fiscal 2024 Results
-- Revenue was $173 million, up 4% year over year. Organic revenue, which
excludes the impacts from foreign exchange, was up 5% year over year.
The year-over-year revenue increase was attributable to higher Sample
Management Solutions and B Medical Systems ("B Medical") revenues. The
combined Sample Management Solutions and Multiomics business segments
grew 4% on an organic basis.
-- Sample Management Solutions revenue was $81 million, up 7% year over
year.
-- Organic revenue also grew 7%, mainly driven by higher revenues in
Sample Repository Solutions and Core Products, particularly in
Large-automated and Cryogenic Stores and in Consumables and
Instruments.
-- Multiomics revenue was $64 million, flat year over year.
-- Organic revenue grew 1% year over year, primarily driven by growth
in Gene Synthesis and Next Generation Sequencing services, offset by
a year-over-year decline in Sanger sequencing revenue.
-- B Medical Systems revenue was $29 million, up 7% year over year.
-- Organic revenue grew 8% year over year. The better-than-forecasted
revenue in the quarter was mainly due to additional cold chain
solutions orders received during the period.
Summary of GAAP Earnings Results
-- Operating loss was $15 million. Operating margin was (8.5%), up 100
basis points year over year.
-- Gross margin was 40.0%, compared to 41.0% in the third quarter 2023,
driven by higher amortization expense and transformation costs in
the current period as well as purchase accounting impacts to
inventory in the prior year period which did not reoccur, partially
offset by higher revenue and operational efficiencies.
-- Operating expenses were $84 million, flat year over year, driven by
lower research and development and selling, general and
administrative expenses, offset by increased restructuring and
transformation charges related to the Company's cost reduction
initiatives, in addition to a benefit of $1.4 million of fair value
contingent consideration adjustments related to the B Medical
Systems segment recognized in the third quarter of fiscal year 2023.
-- Other income included $8.0 million of net interest income versus $11.3
million in the prior year period.
-- Diluted EPS from continuing operations was ($0.12) compared to ($0.04)
in the third quarter of fiscal year 2023.?
Summary of Non-GAAP Earnings Results
-- Operating income was $5 million. Operating margin was 2.6%, an
improvement of 330 basis points year over year.
-- Gross margin was 45.2%, down 40 basis points compared to the third
quarter 2023.
-- Operating expense in the quarter was $74 million, down 4% year over
year, primarily driven by the benefit from cost reduction actions.
-- Adjusted EBITDA was $18 million, and Adjusted EBITDA margin was
10.3%, an improvement of 260 basis points year over year.
-- Diluted EPS was $0.16, compared to $0.13 one year ago.
Cash and Liquidity as of June 30, 2024
-- The Company ended the quarter with a total balance of cash, cash
equivalents, restricted cash and marketable securities of $754 million.
-- Operating cash flow was $2 million in the quarter. Capital expenditures
were $7 million, and free cash flow (cash flow from operations less
capital expenditures) was negative $5 million.
Share Repurchase Program Update
-- In the third quarter, the Company repurchased 4.2 million shares for
$225.9 million under a 10b5-1 trading program.
-- As of June 30, 2024, the Company repurchased 25.1 million shares of
common stock for $1.25 billion under the 2022 Repurchase Authorization.
By the end of October 2024, the Company expects to complete the full
capacity of the $1.5 billion share repurchase authorization announced in
November 2022.
Guidance for Continuing Operations for Full Year Fiscal 2024
-- The Company is lowering its revenue guidance while raising its earnings
guidance for fiscal year 2024:
-- Total revenue is expected to be in the range of $652 to $658 million
due to the expected timing of orders in both B Medical and Sample
Management Solutions.
-- Total organic revenue is expected to be in the range of down 2% to
down 1% relative to fiscal year 2023.
-- Adjusted EBITDA margin expansion is expected to be approximately 300
basis points.
-- Non-GAAP diluted earnings per share is expected to be in the range
of $0.30 to $0.36.
Conference Call and Webcast
Azenta management will webcast its third quarter fiscal 2024 earnings conference call today at 4:30 p.m. Eastern Time. During the call, Company management will respond to questions concerning, but not limited to, the Company's financial performance, business conditions and industry outlook. Management's responses could contain information that has not been previously disclosed.
The call will be broadcast live over the Internet and, together with presentation materials referenced on the call, will be hosted at the Investor Relations section of Azenta's website at https://investors.azenta.com/events and will be archived online on this website for convenient on-demand replay.
Regulation G - Use of Non-GAAP financial Measures
The Company supplements its GAAP financial measures with certain non-GAAP financial measures to provide investors a perspective on the results of business operations, which the Company believes is comparable to the similar analyses provided by its peers. These measures are not presented in accordance with, nor are they a substitute for, U.S. generally accepted accounting principles, or GAAP. These measures should always be considered in conjunction with appropriate GAAP measures. A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures is included at the end of this release following the consolidated balance sheets, statements of operations and statements of cash flows. Certain amounts in the tables that supplement the consolidated financial statements may not sum due to rounding. All percentages are calculated using unrounded amounts.
"Safe Harbor Statement" under Section 21E of the Securities Exchange Act of 1934
Some statements in this release are forward-looking statements made under Section 21E of the Securities Exchange Act of 1934. These statements are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause Azenta's financial and business results to differ materially from our expectations. They are based on the facts known to management at the time they are made. Forward-looking statements include but are not limited to statements about our revenue and earnings expectations, our ability to realize margin improvement from cost reductions, and our ability to deliver financial success in the future and otherwise related to future operating or financial performance and opportunities. Factors that could cause results to differ from our expectations include the following: our ability to reduce costs effectively; the volatility of the life sciences markets the Company serves; our possible inability to meet demand for our products due to difficulties in obtaining components and materials from our suppliers in required quantities and of required quality; the inability of customers to make payments to us when due; price competition; disputes concerning intellectual property; uncertainties in global political and economic conditions; and other factors and other risks, including those that we have described in our filings with the Securities and Exchange Commission, including but not limited to our Annual Report on Form 10-K, Current Reports on Form 8-K and our Quarterly Reports on Form 10-Q. As a result, we can provide no assurance that our future results will not be materially different from those projected. Azenta expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statement is based. Azenta undertakes no obligation to update the information contained in this press release.
About Azenta Life Sciences
Azenta, Inc. (Nasdaq: AZTA) is a leading provider of life sciences solutions worldwide, enabling impactful breakthroughs and therapies to market faster. Azenta provides a full suite of reliable cold-chain sample management solutions and multiomics services across areas such as drug development, clinical research and advanced cell therapies for the industry's top pharmaceutical, biotech, academic and healthcare institutions globally. Our global team delivers and supports these products and services through our industry-leading brands, including GENEWIZ, FluidX, Ziath, 4titude, Limfinity, Freezer Pro, Barkey, and B Medical Systems.
Azenta is headquartered in Burlington, Massachusetts, with operations in North America, Europe, and Asia. For more information, please visit www.azenta.com.
AZENTA INVESTOR CONTACTS:
Yvonne Perron
Vice President, Financial Planning & Analysis and Investor Relations
ir@azenta.com
Sherry Dinsmore
sherry.dinsmore@azenta.com
AZENTA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
June 30, June 30,
2024 2023 2024 2023
Revenue
Products $
68,763 $
67,296 $
181,173 $
205,011
Services 104,046 98,652 305,087 287,704
Total revenue 172,809 165,948 486,260 492,715
Cost of revenue
Products 47,555 42,747 126,051 136,855
Services 56,198 55,196 166,256 160,754
Total cost of revenue 103,753 97,943 292,307 297,609
Gross profit 69,056 68,005 193,953 195,106
Operating expenses
Research and development 7,913 8,968 25,113 25,024
Selling, general and administrative 73,833 75,465 230,723 241,356
Impairment of goodwill and intangible assets 115,975
Contingent consideration - fair value adjustments (1,404) (18,549)
Restructuring charges 2,064 812 10,528 3,773
Total operating expenses 83,810 83,841 382,339 251,604
Operating loss (14,754) (15,836) (188,386) (56,498)
Other income
Interest income, net 8,004 11,347 27,650 32,406
Other income (expense), net (282) 819 650 (704)
Loss before income taxes (7,032) (3,670) (160,086) (24,796)
Income tax benefit (450) (1,207) (900) (9,107)
Loss from continuing operations (6,582) (2,463) (159,186) (15,689)
Income (loss) from discontinued operations, net of tax 993 (1,943)
Net loss $
(6,582) $
(1,470) $
(159,186) $
(17,632)
Basic net loss per share:
Loss from continuing operations $
(0.12) $
(0.04) $
(2.90) $
(0.23)
Income (loss) from discontinued operations, net of tax 0.02 (0.03)
Basic net loss per share $
(0.12) $
(0.02) $
(2.90) $
(0.26)
Diluted net loss per share:
Loss from continuing operations $
(0.12) $
(0.04) $
(2.90) $
(0.23)
Income (loss) from discontinued operations, net of tax 0.02 (0.03)
Diluted net loss per share $
(0.12) $
(0.02) $
(2.90) $
(0.26)
Weighted average shares used in computing net loss per share:
Basic 52,963 63,432 54,914 68,494
Diluted 52,963 63,432 54,914 68,494
AZENTA, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share and per share data)
June 30, September 30,
2024 2023
Assets
Current assets
Cash and cash equivalents $
336,543 $
678,910
Short-term marketable securities 259,296 338,873
Accounts receivable, net of allowance for expected credit losses ($6,507 and $8,057, respectively) 167,613 156,535
Inventories 115,270 128,198
Derivative asset 834 13,036
Prepaid expenses and other current assets 88,102 103,404
Total current assets 967,658 1,418,956
Property, plant and equipment, net 196,124 205,744
Long-term marketable securities 148,086 111,338
Long-term deferred tax assets 1,231 571
Goodwill 679,691 784,339
Intangible assets, net 253,475 294,301
Other assets 77,030 70,471
Total assets $
2,323,295 $
2,885,720
Liabilities and stockholders' equity
Current liabilities
Accounts payable $
39,115 $
35,796
Deferred revenue 33,268 34,614
Accrued warranty and retrofit costs 9,351 10,223
Accrued compensation and benefits 31,229 33,911
Accrued customer deposits 20,954 17,707
Accrued income taxes payable 11,705 7,378
Short-term operating lease liability 10,739 9,499
Accrued expenses and other current liabilities 46,213 61,800
Total current liabilities 202,574 210,928
Long-term deferred tax liabilities 58,080 67,301
Long-term operating lease liabilities 60,654 60,436
Other long-term liabilities 11,589 12,555
Total liabilities 332,897 351,220
Stockholders' equity
Preferred stock, $0.01 par value - 1,000,000 shares authorized, no shares issued or outstanding
Common stock, $0.01 par value - 125,000,000 shares authorized, 63,941,421 shares issued and 639 713
50,395,071 shares outstanding at June 30, 2024, 71,294,247 shares issued and 57,832,378
shares outstanding at September 30, 2023
Additional paid-in capital 758,269 1,156,160
Accumulated other comprehensive loss (44,895) (62,426)
Treasury stock, at cost - 13,546,350 shares at June 30, 2024 and 13,461,869 shares at (205,438) (200,956)
September 30, 2023
Retained earnings 1,481,823 1,641,009
Total stockholders' equity 1,990,398 2,534,500
Total liabilities and stockholders' equity $
2,323,295 $
2,885,720
AZENTA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
Nine Months Ended June 30,
2024 2023
Cash flows from operating activities
Net loss $
(159,186) $
(17,632)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 66,899 63,443
Impairment of goodwill and intangible assets 115,975
Non-cash write-offs of assets 10,745
Stock-based compensation 12,622 10,091
Contingent consideration adjustment (18,549)
Amortization and accretion on marketable securities (4,706) (6,942)
Deferred income taxes (12,478) (25,149)
Purchase accounting impact on inventory 8,737
Loss on disposals of property, plant and equipment 297 37
Changes in operating assets and liabilities:
Accounts receivable (10,923) 29,028
Inventories 11,433 (4,104)
Accounts payable 2,831 (13,193)
Deferred revenue (1,635) 2,496
Accrued warranty and retrofit costs (1,080) 1,412
Accrued compensation and tax withholdings (2,825) (15,830)
Accrued restructuring costs 1,125 311
Other assets and liabilities 7,484 (36,578)
Net cash provided by (used in) operating activities 36,578 (22,422)
Cash flows from investing activities
Purchases of property, plant and equipment (25,339) (29,218)
Purchases of marketable securities (378,275) (236,194)
Sales and maturities of marketable securities 431,544 951,504
Net investment hedge settlement 1,476 29,313
Acquisitions, net of cash acquired (386,508)
Net cash provided by investing activities 29,406 328,897
Cash flows from financing activities
Payments of finance leases (584) (181)
Withholding tax payments on net share settlements on equity awards (4,924)
Proceeds from Employee Stock Purchase Plan 1,678
Share repurchases (412,755) (672,116)
Net cash used in financing activities (411,661) (677,221)
Effects of exchange rate changes on cash and cash equivalents 8,495 65,610
Net decrease in cash, cash equivalents and restricted cash (337,182) (305,136)
Cash, cash equivalents and restricted cash, beginning of period 684,045 1,041,296
Cash, cash equivalents and restricted cash, end of period $
346,863 $
736,160
Supplemental disclosures:
Cash paid for income taxes, net 6,710 41,064
Purchases of property, plant and equipment included in accounts payable and accrued expenses 2,203 2,437
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets
June 30, September 30,
2024 2023
Cash and cash equivalents of continuing operations $
336,543 $
678,910
Short-term restricted cash included in prepaid expenses and other current assets 2,771 4,650
Long-term restricted cash included in other assets 7,549 485
Total cash, cash equivalents and restricted cash shown in the condensed consolidatedstatementsof cash flows $
346,863 $
684,045
Notes on Non-GAAP Financial Measures
Non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management adjusts the GAAP results for the impact of amortization of intangible assets, restructuring charges, purchase price accounting adjustments and charges related to M&A, non-recurring costs related to the Company's business transformation initiatives and share repurchases to provide investors better perspective on the results of operations which the Company believes is more comparable to the similar analysis provided by its peers. Management also excludes special charges and gains, such as impairment losses, gains and losses from the sale of assets, certain tax benefits and charges, as well as other gains and charges that are not representative of the normal operations of the business. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure.
Quarter Ended
June 30, 2024 March 31, 2024 June 30, 2023
per per per
diluted diluted diluted
Amounts in thousands, except per share data
$ share
$ share
$ share
Net loss from continuing operations $
(6,582) $
(0.12) $
(136,880) $
(2.47) $
(2,463) $
(0.04)
Adjustments:
---
Amortization of completed technology 6,316 0.12 6,373 0.11 4,656 0.07
Purchase accounting impact on inventory 2,956 0.05
Amortization of other intangible assets 6,621 0.13 6,654 0.12 7,522 0.12
Transformation costs (1) 4,255 0.08 4,446 0.08 21 0.00
Restructuring and restructuring related charges 2,064 0.04 7,344 0.13 812 0.01
Impairment of goodwill and intangible assets 115,975 2.09
Contingent consideration - fair value adjustments (1,404) (0.02)
Merger and acquisition costs and costs related to share repurchase (2) 74 0.00 426 0.01 219 0.00
Tax adjustments (3) (9) (0.00) 1,659 0.03 (31) (0.00)
Tax effect of adjustments (4,000) (0.09) (3,200) (0.06) (3,947) (0.06)
Non-GAAP adjusted net income from continuing operations $
8,739 $
0.16 $
2,797 $
0.05 $
8,341 $
0.13
Stock based compensation, pre-tax 3,818 0.07 5,602 0.10 3,995 0.06
Tax rate 15 15 15
%
% %
Stock-based compensation, net of tax 3,245 0.07 4,762 0.09 3,396 0.05
Non-GAAP adjusted net income excluding stock-based $
11,984 $
0.23 $
7,559 $
0.14 $
11,737 $
0.18
compensation - continuing operations
Shares used in computing non-GAAP diluted net income per share 52,963 55,440 63,432
Nine Months Ended
June 30, 2024 June 30, 2023
per per
diluted diluted
Amounts in thousands, except per share data
$ share
$ share
Net loss from continuing operations $
(159,186) $
(2.90) $
(15,689) $
(0.23)
Adjustments:
---
Amortization of completed technology 18,315 0.33 13,725 0.20
Purchase accounting impact on inventory 8,737 0.13
Amortization of other intangible assets 20,136 0.37 22,403 0.33
Transformation costs(1) 8,742 0.16 (34) (0.00)
Restructuring and restructuring related charges 10,528 0.19 3,773 0.06
Impairment of goodwill and intangible assets 115,975 2.11
Contingent consideration - fair value adjustments (18,549) (0.27)
Merger and acquisition costs and costs related to share repurchase (2) 4,821 0.09 12,075 0.18
Indemnification asset release (19) (0.00)
Tax adjustments (3) 3,508 0.06 (1,411) (0.02)
Tax effect of adjustments (9,888) (0.18) (11,881) (0.17)
Non-GAAP adjusted net income from continuing operations $
12,951 $
0.24 $
13,130 $
0.19
Stock-based compensation, pre-tax 12,622 0.23 10,091 0.15
Tax rate 15 15
%
%
Stock-based compensation, net of tax 10,729 $
0.20 8,577 $
0.13
Non-GAAP adjusted net income excluding stock-based $
23,680 $
0.43 $
21,707 $
0.32
compensation - continuing operations
Shares used in computing non-GAAP diluted net income per share 54,914 68,494
(1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the
definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's
operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve
significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan, and primarily relate to one
time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process
& systems re-design.
(2) Includes expenses related to governance-
related matters.
(3) Tax adjustments during all periods include adjustments to tax benefits related to stock compensation. These adjustments are recognized in the period of vesting for US GAAP but included in the annual
effective tax rate for Non-GAAP reporting. Tax adjustments for the nine months ended June 30, 2024 exclude the impact of recording valuation allowance adjustments against U.S. and foreign deferred tax
assets in the amount of $2.4M and tax adjustments for the nine months ended June 30, 2023 exclude a $1.3M US GAAP tax benefit related to an incentive tax rate change in China.
Quarter Ended Nine Months Ended
June 30, March 31, June 30, June 30, June 30,
Dollars in thousands 2024 2024 2023 2024 2023
GAAP net loss $
(6,582) $
(136,880) $
(1,470) $
(159,186) $
(17,632)
Less: Income (loss) from discontinued operations 993 (1,943)
GAAP net loss from continuing operations (6,582) (136,880) (2,463) (159,186) (15,689)
Adjustments:
---
Less: Interest income, net (8,004) (9,565) (11,347) (27,650) (32,406)
Add / Less: Income tax (benefit) expense (450) (260) (1,207) (900) (9,107)
Add: Depreciation 9,749 9,321 9,126 28,446 27,315
Add: Amortization of completed technology 6,316 6,373 4,656 18,315 13,725
Add: Amortization of other intangible assets 6,621 6,654 7,522 20,136 22,403
Earnings before interest, taxes, depreciation and $
7,650 $
(124,357) $
6,287 $
(120,839) $
6,241
amortization - Continuing operations
Quarter Ended Nine Months Ended
June 30, March 31, June 30, June 30, June 30,
Dollars in thousands 2024 2024 2023 2024 2023
Earnings before interest, taxes, depreciation and $
7,650 $
(124,357) $
6,287 $
(120,839) $
6,241
amortization - Continuing operations
Adjustments:
---
Add: Stock-based compensation 3,818 5,602 3,995 12,622 10,091
Add: Purchase accounting impact on inventory 2,956 8,737
Add: Restructuring and restructuring related charges 2,064 7,344 812 10,528 3,773
Add: Merger and acquisition costs and costs related to 74 426 219 4,821 12,075
share repurchase(1)
Add: Impairment of goodwill and intangible assets 115,975 115,975
Less: Contingent consideration - fair value adjustments (1,404) (18,549)
Less: Transformation costs(2) 4,255 4,446 21 8,742 (34)
Less: Indemnification asset release (19)
Adjusted earnings before interest, taxes, depreciation and $
17,861 $
9,436 $
12,886 $
31,849 $
22,315
amortization - Continuing operations
(1) Includes expenses related to governance-
related matters.
(2) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the
definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's
operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve
significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan, and primarily relate to one
time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process
& systems re-design.
Quarter Ended
Dollars in thousands June 30, 2024 March 31, 2024 June 30, 2023
GAAP gross profit $
69,056 40.0 $
63,385 39.8 $
68,005 41.0
% % %
Adjustments:
---
Amortization of completed technology 6,316 3.7 6,373 4.0 4,656 2.8
% % %
Purchase accounting impact on inventory 2,956 1.8
%
Transformation costs(1) 2,656 1.5 710 0.4
% %
Non-GAAP adjusted gross profit $
78,028 45.2 $
70,468 44.3 $
75,617 45.6
% % %
Nine Months Ended
Dollars in thousands June 30, 2024 June 30, 2023
GAAP gross profit $
193,953 39.9 $
195,106 39.6
% %
Adjustments:
---
Amortization of completed technology 18,315 3.8 13,725 2.8
% %
Purchase accounting impact on inventory 8,737 1.8
%
Transformation costs(1) 3,365 0.7
%
Non-GAAP adjusted gross profit $
215,633 44.3 $
217,568 44.2
% %
(1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the
definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's
operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve
significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan, and primarily relate to one
time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process
& systems re-design.
Sample Management Solutions
Multiomics
Quarter Ended
Quarter Ended
June 30, March 31, June 30, June 30, March 31, June 30,
Dollars in thousands 2024 2024 2023 2024 2024 2023
GAAP gross profit $
36,279 45.0 $
32,943 44.4 $
34,930 46.4 $
29,199 45.9 $
27,721 44.6 $
28,294 44.3
% % % % % %
Adjustments:
---
Amortization of completed technology 1,010 1.3 1,027 1.4 744 1.0 1,038 1.6 1,040 1.7 1,220 1.9
% % % % % %
Transformation costs(1) (127) (0.2) 359 0.5
% %
Non-GAAP adjusted gross profit $
37,162 46.1 $
34,329 46.3 $
35,674 47.4 $
30,237 47.5 $
28,761 46.2 $
29,514 46.2
% % % % % %
B Medical Systems
Segment Total
Quarter Ended
Quarter Ended
June 30, March 31, June 30, June 30, March 31, June 30,
Dollars in thousands 2024 2024 2023 2024 2024 2023
GAAP gross profit $
3,578 12.5 $
2,721 11.9 $
4,781 17.9 $
69,056 40.0 $
63,385 39.8 $
68,005 41.0
% % % % % %
Adjustments:
---
Amortization of completed technology 4,268 15.0 4,306 18.9 2,692 10.1
% % %
% % % 6,316 3.7 6,373 4.0 4,656 2.8
Purchase accounting impact on inventory 2,956 11.0
%
% 2,956 1.8
Transformation costs(1) 2,783 9.8 351 1.5 2,656 1.5 710 0.4
% % % %
Non-GAAP adjusted gross profit $
10,629 37.3 $
7,378 32.4 $
10,429 39.0 $
78,028 45.2 $
70,468 44.3 $
75,617 45.6
% % % % % %
Sample Management Solutions Multiomics
Nine Months Ended Nine Months Ended
Dollars in thousands June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
GAAP gross profit $
102,494 43.8 $
94,509 42.6 $
85,391 45.3 $
83,013 44.4
% % % %
Adjustments:
---
Amortization of completed technology 2,853 1.2 2,106 0.9 3,117 1.7 3,661 2.0
% % % %
Transformation costs(1) 231 0.1
%
Non-GAAP adjusted gross profit $
105,578 45.2 $
96,615 43.6 $
88,508 46.9 $
86,674 46.3
% % % %
B Medical Systems Segment Total
Nine Months Ended Nine Months Ended
Dollars in thousands June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
GAAP gross profit $
6,068 9.5 $
17,584 21.0 $
193,953 39.9 $
195,106 39.6
%
% % %
Adjustments:
---
Amortization of completed technology 12,345 19.3
% % %
% 7,957 9.5 18,315 3.8 13,724 2.8
Purchase accounting impact on inventory and contracts acquired 8,737 10.4
%
% 8,737 1.8
Transformation costs(1) 3,134 4.9 3,365 0.7
% %
Non-GAAP adjusted gross profit $
21,547 33.7 $
34,278 41.0 $
215,633 44.3 $
217,567 44.2
% % % %
(1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the
definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's
operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve
significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan, and primarily relate to one
time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process
& systems re-design.
Sample Management Solutions Multiomics B Medical Systems
Quarter Ended Quarter Ended Quarter Ended
June 30, March 31, June 30, June 30, March 31, June 30, June 30, March 31, June 30,
Dollars in thousands 2024 2024 2023 2024 2024 2023 2024 2024 2023
GAAP operating (loss) profit $
2,469 $
(3,005) $
70 $
(1,768) $
(4,006) $
(4,632) $
(5,142) $
(5,810) $
(4,129)
Adjustments:
---
Amortization of completed technology 1,010 1,027 744 1,038 1,040 1,220 4,268 4,306 2,692
Purchase accounting impact on inventory 2,956
Amortization of other intangible assets 51 52 (1) 1
Transformation costs(1) (127) 359 2,783 351
Other adjustment 1
Non-GAAP adjusted operating (loss) profit $
3,404 $
(1,567) $
813 $
(730) $
(2,966) $
(3,412) $
1,908 $
(1,153) $
1,520
Total Segments Corporate Total
Quarter Ended Quarter Ended Quarter Ended
June 30, March 31, June 30, June 30, March 31, June 30, June 30, March 31, June 30,
Dollars in thousands 2024 2024 2023 2024 2024 2023 2024 2024 2023
GAAP operating loss $
(4,441) $
(12,821) $
(8,691) $
(10,313) $
(134,134) $
(7,145) $
(14,754) $
(146,955) $
(15,836)
Adjustments:
---
Amortization of completed technology 6,316 6,373 4,656 6,316 6,373 4,656
Purchase accounting impact on inventory 2,956 2,956
Amortization of other intangible assets 51 52 6,570 6,602 7,522 6,621 6,654 7,522
Transformation costs(1) 2,656 710 1,599 3,736 21 4,255 4,446 21
Restructuring charges 2,064 7,344 812 2,064 7,344 812
Impairment of goodwill and intangible assets 115,975 115,975
Contingent consideration adjustment (1,404) (1,404)
Merger and acquisition costs and costs related to share repurchase (2) 74 426 219 74 426 219
Other adjustment (1) (2) (1) (2)
Non-GAAP adjusted operating (loss) profit $
4,582 $
(5,686) $
(1,079) $
(7) $
(51) $
23 $
4,575 $
(5,737) $
(1,056)
Sample Management Multiomics B Medical Systems
Solutions
Nine Months Ended Nine Months Ended Nine Months Ended
Dollars in thousands June 30, June 30, June 30, June 30, June 30, June 30,
2024 2023 2024 2023 2024 2023
GAAP operating loss $
(2,259) $
(10,627) $
(10,264) $
(14,150) $
(19,133) $
(13,604)
Adjustments:
---
Amortization of completed technology 2,853 2,106 3,117 3,661 12,345 7,957
Purchase accounting impact on inventory 8,737
Amortization of other intangibles 154 259 1,366
Transformation costs(1) 231 3,134
Other adjustment 2 1 2
Non-GAAP adjusted operating (loss) profit $
981 $
(8,261) $
(7,147) $
(10,487) $
(3,654) $
4,456
Total Segments Corporate Total
Nine Months Ended Nine Months Ended Nine Months Ended
Dollars in thousands June 30, June 30, June 30, June 30, June 30, June 30,
2024 2023 2024 2023 2024 2023
GAAP operating loss $
(31,656) $
(38,381) $
(156,730) $
(18,117) $
(188,386) $
(56,498)
Adjustments:
---
Amortization of completed technology 18,315 13,724 1 18,315 13,725
Purchase accounting impact on inventory 8,737 8,737
Amortization of other intangibles 154 1,625 19,982 20,778 20,136 22,403
Transformation costs(1) 3,365 5,377 (34) 8,742 (34)
Restructuring and restructuring related charges 10,528 3,773 10,528 3,773
Impairment of goodwill and intangible assets 115,975 115,975
Contingent consideration - fair value adjustments (18,549) (18,549)
Merger and acquisition costs and costs related to share repurchase (2) 4,821 12,075 4,821 12,075
Other adjustment 2 3 (1) (3) 1
Non-GAAP adjusted operating loss $
(9,820) $
(14,292) $
(48) $
(76) $
(9,868) $
(14,368)
(1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the
definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's
operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve
significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan, and primarily relate to one
time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process
& systems re-design.
(2) Includes expenses related to governance-
related matters.
Sample Multiomics B Medical Azenta Total
Management Systems
Solutions
Quarter Ended Quarter Ended Quarter Ended Quarter Ended
June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30,
Dollars in millions 2024 2023 Change 2024 2023 Change 2024 2023 Change 2024 2023 Change
Revenue $
81 $
75 7 $
64 $
64 (0) $
29 $
27 7 $
173 $
166 4
% % % %
Acquisitions/
divestitures
Currency exchange (0) 0 (1) 1 (0) 1 (1) 1
% % % %
rates
Organic revenue $
81 $
75 7 $
64 $
64 1 $
29 $
27 8 $
174 $
166 5
% % % %
Sample Multiomics B Medical Azenta Total
Management Systems
Solutions
Nine Months Ended Nine Months Ended Nine Months Ended Nine Months Ended
June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30,
Dollars in millions 2024 2023 Change 2024 2023 Change 2024 2023 Change 2024 2023 Change
Revenue $
234 $
222 5 $
189 $
187 1 $
64 $
84 (24) $
486 $
493 (1)
% % % %
Acquisitions/ 1 (1) 1 (0)
% %
divestitures
Currency exchange 2 (1) (1) 1 1 (1) 1 (0)
% % % %
rates
Organic revenue $
231 $
222 4 $
190 $
187 1 $
63 $
84 (24) $
484 $
493 (2)
% % % %
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SOURCE Azenta
