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Terns Pharmaceuticals
Chimerix

Azenta Reports Second Quarter Results for Fiscal 2024, Ended March 31, 2024

May 08, 2024 | Last Trade: US$45.29 0.89 2.00

BURLINGTON, Mass., May 8, 2024 /PRNewswire/ -- Azenta, Inc. (Nasdaq: AZTA) today reported financial results for the second quarter ended March 31, 2024.

 
  

Quarter Ended

Dollars in millions, except per share data

 

March 31, 

 

December 31, 

 

March 31, 

 

Change

  

2024

 

2023

 

2023

 

Prior Qtr

 

Prior Yr.

Revenue from Continuing Operations

 

$

159

 

$

154

 

$

148

 

3

%

 

7

%

   Organic growth

             

7

%

Sample Management Solutions

 

$

74

 

$

79

 

$

71

 

(6)

%

 

4

%

Multiomics

 

$

62

 

$

63

 

$

62

 

(1)

%

 

(0)

%

B Medical Systems

 

$

23

 

$

13

 

$

15

 

81

%

 

51

%

                

Diluted EPS Continuing Operations

 

$

(2.47)

 

$

(0.28)

 

$

(0.03)

 

nm

  

nm

 

Diluted EPS Total

 

$

(2.47)

 

$

(0.28)

 

$

(0.07)

 

nm

  

nm

 
                

Non-GAAP Diluted EPS Continuing Operations

 

$

0.05

 

$

0.02

 

$

(0.06)

 

102

%

 

184

%

Adjusted EBITDA - Continuing Operations

 

$

9

 

$

5

 

$

(2)

 

107

%

 

493

%

Adjusted EBITDA Margin - Continuing Operations

  

5.9 %

  

3.0 %

  

(1.6) %

      
 

Management Comments

"We saw continued momentum in the second quarter with strong organic revenue growth, and improved profitability as a result of our ongoing cost reduction and transformation initiatives," stated Steve Schwartz, President and CEO. "This marks our fourth consecutive quarter of positive free cash flow. And as noted during our Investor Day in March, we are confident in our position and the market opportunity which we are uniquely positioned to capture." 

Second Quarter Fiscal 2024 Results

  • Revenue was $159 million, up 7% year over year. Organic revenue, which excludes the impacts from foreign exchange, was also up 7% year over year, with a nominal benefit from foreign exchange tailwinds. The year-over-year revenue increase was attributable to higher B Medical Systems ("B Medical") and Sample Management Solutions revenues. The combined Sample Management Solutions and Multiomics business segments grew 2% on an organic basis. The Consumables and Instruments ("C&I") product line remained a headwind to growth in the second quarter, largely attributable to instruments softness. Excluding the C&I product line, organic revenue grew 9% year-over-year.
  • Sample Management Solutions revenue was $74 million, up 4% year over year.
    • Organic revenue grew 3%, mainly driven by continued strength in large-automated Store Systems and Sample Repository Solutions, partially offset by a year-over-year revenue decline in the C&I product line. Excluding the C&I product line, the segment grew 8% on an organic basis.
  • Multiomics revenue was $62 million, flat year over year.
    • Organic revenue grew 1% year over year, primarily driven by growth in Gene Synthesis services, partially offset by a year-over-year decline in Sanger sequencing revenue.
  • B Medical Systems revenue was $23 million, up 51% year over year.
    • Organic revenue grew 49% year over year. The better-than-expected revenue in the quarter was mainly due to the materialization of additional cold chain solution orders received during the period.

Summary of GAAP Earnings Results

  • Operating loss was $147 million. Operating margin was (92.3%), compared to (8.7%) in the second quarter fiscal year 2023.
    • Gross margin was 39.8%, an improvement of 400 basis points year over year, mainly driven by higher revenue.
    • Operating expenses were $210 million, up 218% year over year, and included a $111.3 million non-cash goodwill impairment charge related to the B Medical segment and a $4.7 million non-cash intangible asset impairment charge related to the discontinuation of the sample sourcing product offering (a product line within the Sample Management Solutions segment), as well as costs for restructuring and transformation. The year-over-year increase was driven by the goodwill and intangible asset impairments, transformation costs, and higher restructuring costs, partially offset by a prior year one-time non-cash benefit of $17 million related to the reversal of the fair value of B Medical contingent consideration.
  • Other income included $9.6 million of net interest income versus $10.4 million in the prior year period.
  • Diluted EPS from continuing operations was ($2.47) compared to ($0.03) in the second quarter of fiscal year 2023.

Summary of Non-GAAP Earnings Results

  • Operating loss was $6 million. Operating margin was (3.6%), an improvement of 530 basis points year over year.
    • Gross margin was 44.3%, an improvement of 310 basis points year over year, mainly driven by higher revenue and operating efficiency.
    • Operating expense in the quarter was $76 million, up 3% year over year, primarily driven by the year-over-year increase in stock-based compensation and higher commissions expense in B Medical which offset the benefit from cost reduction actions.
    • Adjusted EBITDA was $9 million, and Adjusted EBITDA margin was 5.9%, an improvement of 750 basis points year over year.
  • Diluted EPS was $0.05, compared to ($0.06) one year ago.

Cash and Liquidity as of March 31, 2024

  • The Company ended the quarter with a total balance of cash, cash equivalents, restricted cash and marketable securities of $975 million.
  • Operating cash flow was $8 million in the quarter. Capital expenditures were $7 million, and free cash flow (cash flow from operations less capital expenditures) was $2 million.

Share Repurchase Program Update

  • In the second quarter, the Company repurchased 1.2 million shares for $73.9 million under a 10b5-1 trading program.
  • As of March 31, 2024, the Company repurchased 20.9 million shares of common stock for $1.025 billion under the 2022 Repurchase Authorization. In fiscal year 2024, the Company intends 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 revenue guidance for fiscal year 2024 while raising earnings guidance:
    • Total revenue is now expected to be in the range of $659 to $671 million due to the timing of B Medical revenue.
    • Total organic revenue in the range of down 1% to up 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 $0.27 to $0.37.

Conference Call and Webcast

Azenta management will webcast its second 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. In addition, Participants may access the call using the following. online registration link. Registrants will receive confirmation containing dial in details and a unique conference call code for entry.

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; our ability to successfully invest the cash proceeds from the sale of our Semiconductor Automation business; 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
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Sherry Dinsmore
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AZENTA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except per share data)

 
  

Three Months Ended

 

Six Months Ended

  

March 31, 

 

March 31, 

  

2024

 

2023

 

2024

 

2023

Revenue

            

Products

 

$

59,017

 

$

51,917

 

$

112,410

 

$

137,715

Services

  

100,117

  

96,484

  

201,041

  

189,052

Total revenue

  

159,134

  

148,401

  

313,451

  

326,767

Cost of revenue

            

Products

  

41,658

  

40,009

  

78,496

  

94,108

Services

  

54,091

  

55,156

  

110,058

  

105,558

Total cost of revenue

  

95,749

  

95,165

  

188,554

  

199,666

Gross profit

  

63,385

  

53,236

  

124,897

  

127,101

Operating expenses

            

Research and development

  

8,707

  

8,520

  

17,200

  

16,056

Selling, general and administrative

  

78,314

  

73,339

  

156,890

  

165,891

Impairment of goodwill and intangible assets

  

115,975

  

  

115,975

  

Contingent consideration - fair value adjustments

  

  

(17,145)

  

  

(17,145)

Restructuring charges

  

7,344

  

1,499

  

8,464

  

2,961

Total operating expenses

  

210,340

  

66,213

  

298,529

  

167,763

Operating loss

  

(146,955)

  

(12,977)

  

(173,632)

  

(40,662)

Other income

            

Interest income, net

  

9,565

  

10,394

  

19,646

  

21,059

Other income (expense), net

  

250

  

(2,668)

  

932

  

(1,523)

Loss before income taxes

  

(137,140)

  

(5,251)

  

(153,054)

  

(21,126)

Income tax benefit

  

(260)

  

(3,260)

  

(450)

  

(7,900)

Income (loss) from continuing operations

  

(136,880)

  

(1,991)

  

(152,604)

  

(13,226)

Loss from discontinued operations, net of tax

  

  

(2,936)

  

  

(2,936)

Net loss

 

$

(136,880)

 

$

(4,927)

 

$

(152,604)

 

$

(16,162)

             

Basic net loss per share:

            

Income (loss) from continuing operations

 

$

(2.47)

 

$

(0.03)

 

$

(2.72)

 

$

(0.19)

Loss from discontinued operations, net of tax

  

  

(0.04)

  

  

(0.04)

Basic net loss per share

 

$

(2.47)

 

$

(0.07)

 

$

(2.72)

 

$

(0.23)

Diluted net loss per share:

            

Income (loss) from continuing operations

 

$

(2.47)

 

$

(0.03)

 

$

(2.72)

 

$

(0.19)

Loss from discontinued operations, net of tax

  

  

(0.04)

  

  

(0.04)

Diluted net loss per share

 

$

(2.47)

 

$

(0.07)

 

$

(2.72)

 

$

(0.23)

Weighted average shares used in computing net loss per share:

            

Basic

  

55,440

  

69,111

  

56,078

  

70,858

Diluted

  

55,440

  

69,111

  

56,078

  

70,858

AZENTA, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)

 
  

March 31, 

 

September 30,

  

2024

 

2023

       

Assets

      

Current assets

      

 Cash and cash equivalents

 

$

353,491

 

$

678,910

 Short-term marketable securities

  

468,220

  

338,873

 Accounts receivable, net of allowance for expected credit losses ($6,844 and

 $8,057, respectively)

  

154,668

  

156,535

 Inventories

  

122,351

  

128,198

 Derivative asset

  

350

  

13,036

 Short-term restricted cash

  

3,089

  

4,650

 Prepaid expenses and other current assets

  

87,897

  

98,754

Total current assets

  

1,190,066

  

1,418,956

Property, plant and equipment, net

  

200,905

  

205,744

Long-term marketable securities

  

143,018

  

111,338

Long-term deferred tax assets

  

925

  

571

Operating lease right-of-use assets

  

69,662

  

66,580

Goodwill

  

681,140

  

784,339

Intangible assets, net

  

267,626

  

294,301

Other assets

  

10,155

  

3,891

Total assets

 

$

2,563,497

 

$

2,885,720

Liabilities and stockholders' equity

      

Current liabilities

      

 Accounts payable

 

$

37,319

 

$

35,796

 Deferred revenue

  

38,323

  

34,614

 Accrued warranty and retrofit costs

  

9,745

  

10,223

 Accrued compensation and benefits

  

27,985

  

33,911

 Accrued customer deposits

  

21,772

  

17,707

 Accrued income taxes payable

  

10,706

  

7,378

 Short-term operating lease liability

  

10,802

  

9,499

 Accrued expenses and other current liabilities

  

46,347

  

61,800

Total current liabilities

  

202,999

  

210,928

Long-term tax reserves

  

377

  

380

Long-term deferred tax liabilities

  

62,267

  

67,301

Long-term operating lease liabilities

  

63,374

  

60,436

Other long-term liabilities

  

11,609

  

12,175

Total liabilities

  

340,626

  

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, 68,464,925

shares issued and 54,614,041 shares outstanding at March 31, 2024, 71,294,247

shares issued and 57,832,378 shares outstanding at September 30, 2023

  

681

  

713

Additional paid-in capital

  

999,333

  

1,156,160

Accumulated other comprehensive loss

  

(41,728)

  

(62,426)

Treasury stock, at cost - 13,850,884 shares at March 31, 2024 and 13,461,869 shares at September 30, 2023

  

(223,820)

  

(200,956)

Retained earnings

  

1,488,405

  

1,641,009

Total stockholders' equity

  

2,222,871

  

2,534,500

Total liabilities and stockholders' equity

 

$

2,563,497

 

$

2,885,720

AZENTA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)

       
  

Six Months Ended March 31, 

  

2024

 

2023

Cash flows from operating activities

      

Net loss

 

$

(152,604)

 

$

(16,162)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

      

 Depreciation and amortization

  

44,214

  

42,140

 Impairment of goodwill and intangible assets

  

115,975

  

 Non-cash write-offs of assets

  

6,966

  

 Stock-based compensation

  

8,804

  

6,096

 Contingent consideration adjustment

  

  

(17,145)

 Amortization and accretion on marketable securities

  

(2,084)

  

(5,284)

 Deferred income taxes

  

(9,456)

  

(20,843)

 Purchase accounting impact on inventory

  

  

5,781

 Loss on disposals of property, plant and equipment

  

260

  

31

Changes in operating assets and liabilities:

      

Accounts receivable

  

2,922

  

23,925

Inventories

  

7,975

  

(11,504)

Accounts payable

  

936

  

(5,677)

Deferred revenue

  

3,379

  

3,625

Accrued warranty and retrofit costs

  

(714)

  

622

Accrued compensation and tax withholdings

  

(6,153)

  

(21,797)

Accrued restructuring costs

  

1,454

  

820

Other assets and liabilities

  

12,913

  

(23,798)

Net cash provided by (used in) operating activities

  

34,787

  

(39,170)

Cash flows from investing activities

      

Purchases of property, plant and equipment

  

(18,746)

  

(21,705)

Purchases of marketable securities

  

(345,447)

  

(233,584)

Sales and maturities of marketable securities

  

190,504

  

728,171

Net investment hedge settlement

  

1,476

  

29,313

Acquisitions, net of cash acquired

  

  

(387,665)

Net cash provided by (used in) investing activities

  

(172,213)

  

114,530

Cash flows from financing activities

      

Payments of finance leases

  

(386)

  

(230)

Withholding tax payments on net share settlements on equity awards

  

  

(4,906)

Share repurchases

  

(186,834)

  

(500,000)

Net cash used in financing activities

  

(187,220)

  

(505,136)

Effects of exchange rate changes on cash and cash equivalents

  

4,721

  

60,355

Net decrease in cash, cash equivalents and restricted cash

  

(319,925)

  

(369,421)

Cash, cash equivalents and restricted cash, beginning of period

  

684,045

  

1,041,296

Cash, cash equivalents and restricted cash, end of period

 

$

364,120

 

$

671,875

Supplemental disclosures:

      

Cash paid for income taxes, net

  

5,008

  

35,286

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets

      
   

March 31, 

  

September 30, 

   

2024

  

2023

Cash and cash equivalents of continuing operations

 

$

353,491

 

$

678,910

Short-term restricted cash

  

3,089

  

4,650

Long-term restricted cash included in other assets

  

7,540

  

485

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows

 

$

364,120

 

$

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

  

March 31, 2024

 

December 31, 2023

 

March 31, 2023

    

per diluted

   

per diluted

   

per diluted

Amounts in thousands, except per share data 

 

$

 

share

 

$

 

share

 

$

 

share

Net income (loss) from continuing operations

 

$

(136,880)

 

$

(2.47)

 

$

(15,724)

 

$

(0.28)

 

$

(1,991)

 

$

(0.03)

Adjustments:

                  

Amortization of completed technology

  

6,373

  

0.11

  

5,627

  

0.10

  

4,901

  

0.07

Purchase accounting impact on inventory

  

  

  

  

  

2,912

  

0.04

Amortization of other intangible assets

  

6,654

  

0.12

  

6,862

  

0.12

  

7,509

  

0.11

Transformation costs (1)

  

4,446

  

0.08

  

41

  

0.00

  

10

  

0.00

Restructuring and restructuring related charges

  

7,344

  

0.13

  

1,120

  

0.02

  

1,499

  

0.02

Impairment of goodwill and intangible assets

  

115,975

  

2.09

  

  

  

  

Contingent consideration - fair value adjustments

  

  

  

  

  

(17,145)

  

(0.25)

Merger and acquisition costs and costs related to share repurchase (2)

  

426

  

0.01

  

4,321

  

0.08

  

19

  

0.00

Tax adjustments (3)

  

1,659

  

0.03

  

1,858

  

0.03

  

56

  

0.00

Tax effect of adjustments 

  

(3,200)

  

(0.06)

  

(2,688)

  

(0.05)

  

(1,934)

  

(0.03)

Non-GAAP adjusted net income from continuing operations

 

$

2,797

 

$

0.05

 

$

1,417

 

$

0.02

 

$

(4,164)

 

$

(0.06)

   Stock based compensation, pre-tax

  

5,602

  

0.10

  

3,202

  

0.06

  

3,991

  

0.06

   Tax rate

  

15

%

 

  

12

%

 

  

15

%

 

Stock-based compensation, net of tax

  

4,762

  

0.09

  

2,818

  

0.05

  

3,392

  

0.05

      Non-GAAP adjusted net income excluding stock-based

      compensation - continuing operations

 

$

7,559

 

$

0.14

 

$

4,235

 

$

0.07

 

$

(772)

 

$

(0.01)

                   

Shares used in computing non-GAAP diluted net income per share

  

  

55,440

  

  

56,709

  

  

69,111

  

Six Months Ended

 
  

March 31, 2024

 

March 31, 2023

 
    

per diluted

   

per diluted

 

Amounts in thousands, except per share data 

 

$

 

share

 

$

 

share

 

Net loss from continuing operations

 

$

(152,604)

 

$

(2.72)

 

$

(13,226)

 

$

(0.19)

 

Adjustments:

             

Amortization of completed technology

  

12,000

  

0.21

  

9,070

  

0.13

 

Purchase accounting impact on inventory

  

  

  

5,781

  

0.08

 

Amortization of other intangible assets

  

13,516

  

0.24

  

14,882

  

0.21

 

Transformation costs(1)

  

4,487

  

0.08

  

(55)

  

(0.00)

 

Restructuring and restructuring related charges

  

8,464

  

0.15

  

2,961

  

0.04

 

Impairment of goodwill and intangible assets

  

115,975

  

2.07

  

  

 

Contingent consideration - fair value adjustments

  

  

  

(17,145)

  

(0.24)

 

Merger and acquisition costs and costs related to share repurchase (2)

  

4,747

  

0.08

  

11,857

  

0.17

 

Indemnification asset release

  

  

  

(19)

  

(0.00)

 

Tax adjustments (3)

  

3,517

  

0.06

  

(1,380)

  

(0.02)

 

Tax effect of adjustments

  

(5,888)

  

(0.10)

  

(7,934)

  

(0.11)

 

Non-GAAP adjusted net income from continuing operations

 

$

4,214

 

$

0.08

 

$

4,790

 

$

0.07

 

Stock-based compensation, pre-tax

  

8,804

  

0.16

  

6,217

  

0.09

 

Tax rate

  

15

%

 

  

15

%

 

 

Stock-based compensation, net of tax

  

7,483

 

$

0.13

  

5,284

  

0.07

 

 Non-GAAP adjusted net income excluding stock-based compensation

 - continuing operations

 

$

11,697

 

$

0.21

 

$

10,074

 

$

0.14

 
              

Shares used in computing non-GAAP diluted net income per share

  

  

56,078

  

  

70,858

 
  

(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 six months ended March 31, 2024, exclude the impact of recording valuation allowance adjustments against U.S. deferred taxes in the amount of $0.7M. Tax adjustments for the quarter ended December 31, 2022, included a $1.3M increase to expense related to the exclusion of a benefit from an incentive tax rate change in China.

  
                
  

Quarter Ended

 

Six Months Ended

  

March 31, 

 

December 31, 

 

March 31, 

 

March 31, 

 

March 31, 

Dollars in thousands

 

2024

 

2023

 

2023

 

2024

 

2023

GAAP net income (loss)

 

$

(136,880)

 

$

(15,724)

 

$

(4,927)

 

$

(152,604)

 

$

(16,162)

Less: Income (loss) from discontinued operations

  

  

  

(2,936)

  

  

(2,936)

GAAP net income (loss) from continuing operations

  

(136,880)

  

(15,724)

  

(1,991)

  

(152,604)

  

(13,226)

Adjustments:

               

Less: Interest income, net

  

(9,565)

  

(10,081)

  

(10,394)

  

(19,646)

  

(21,059)

Add / Less: Income tax (benefit) expense

  

(260)

  

(190)

  

(3,260)

  

(450)

  

(7,900)

Add: Depreciation

  

9,321

  

9,377

  

9,549

  

18,698

  

18,189

Add: Amortization of completed technology

  

6,373

  

5,627

  

4,901

  

12,000

  

9,070

Add: Amortization of other intangible assets

  

6,654

  

6,862

  

7,509

  

13,516

  

14,882

Earnings before interest, taxes, depreciation and amortization - Continuing operations

 

$

(124,357)

 

$

(4,129)

 

$

6,315

 

$

(128,486)

 

$

(44)

                
  

Quarter Ended

 

Six Months Ended

  

March 31, 

 

December 31, 

 

March 31, 

 

March 31, 

 

March 31, 

Dollars in thousands

 

2024

 

2023

 

2023

 

2024

 

2023

Earnings before interest, taxes, depreciation and amortization - Continuing operations

 

$

(124,357)

 

$

(4,129)

 

$

6,315

 

$

(128,486)

 

$

(44)

Adjustments:

               

Add: Stock-based compensation

  

5,602

  

3,202

  

3,991

  

8,804

  

6,217

Add: Purchase accounting impact on inventory

  

  

  

2,912

  

  

5,781

Add: Restructuring and restructuring related charges

  

7,344

  

1,120

  

1,499

  

8,464

  

2,960

Add: Merger and acquisition costs and costs related to share repurchase(1)

  

426

  

4,321

  

19

  

4,747

  

11,857

Add: Impairment of goodwill and intangible assets

  

115,975

  

  

  

115,975

  

Less: Contingent consideration - fair value adjustments

  

  

  

(17,145)

  

  

(17,145)

Less: Transformation costs(2)

  

4,446

  

41

  

10

  

4,487

  

(55)

Less: Indemnification asset release

  

  

  

  

  

(19)

Adjusted earnings before interest, taxes, depreciation and amortization - Continuing operations

 

$

9,436

 

$

4,555

 

$

(2,400)

 

$

13,991

 

$

9,552

  

(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

 

March 31, 2024

  

December 31, 2023

  

March 31, 2023

 

GAAP gross profit

 

$

63,385

 

39.8

%

 

$

61,512

 

39.9

%

 

$

53,236

 

35.9

%

Adjustments:

                  

Amortization of completed technology

  

6,373

 

4.0

   

5,627

 

3.6

   

4,901

 

3.3

 

Purchase accounting impact on inventory

  

 

   

 

   

2,912

 

2.0

 

Transformation costs(1)

  

710

 

0.4

   

 

   

 

 

Non-GAAP adjusted gross profit

 

$

70,468

 

44.3

%

 

$

67,139

 

43.5

%

 

$

61,049

 

41.1

%

  

Six Months Ended

 

Dollars in thousands

 

March 31, 2024

  

March 31, 2023

 

GAAP gross profit

 

$

124,897

 

39.8

%

 

$

127,101

 

38.9

%

Adjustments:

            

Amortization of completed technology

  

12,000

 

3.8

   

9,070

 

2.8

 

Purchase accounting impact on inventory

  

 

   

5,781

 

1.8

 

Transformation costs(1)

  

710

 

0.2

   

 

 

Non-GAAP adjusted gross profit

 

$

137,607

 

43.9

%

 

$

141,951

 

43.4

%

  

(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

  

March 31, 

  

December 31, 

  

March 31, 

  

March 31, 

  

December 31, 

  

March 31, 

 

Dollars in thousands

 

2024

  

2023

  

2023

  

2024

  

2023

  

2023

 

GAAP gross profit

 

$

32,943

 

44.4

%

 

$

33,272

 

42.1

%

 

$

27,544

 

38.8

%

 

$

27,721

 

44.6

%

 

$

28,471

 

45.4

%

 

$

27,003

 

43.4

%

Adjustments:

                                    

Amortization of completed technology

  

1,027

 

1.4

   

816

 

1.0

   

933

 

1.3

   

1,040

 

1.7

   

1,039

 

1.7

   

1,226

 

2.0

 

Transformation costs(1)

  

359

 

0.5

   

 

   

 

   

 

   

 

   

 

 

Non-GAAP adjusted gross profit

 

$

34,329

 

46.3

%

 

$

34,088

 

43.1

%

 

$

28,477

 

40.1

%

 

$

28,761

 

46.2

%

 

$

29,510

 

47.1

%

 

$

28,229

 

45.4

%

                                     
                                     
  

B Medical Systems

 

Segment Total

  

Quarter Ended

 

Quarter Ended

  

March 31, 

  

December 31, 

  

March 31, 

  

March 31, 

 

December 31, 

 

March 31, 

Dollars in thousands

 

2024

  

2023

  

2023

  

2024

 

2023

 

2023

GAAP gross profit

 

$

2,721

 

11.9

%

 

$

(231)

 

(1.8)

%

 

$

(1,311)

 

(8.7)

%

 

$

63,385

 

39.8

%

 

$

61,512

 

39.9

%

 

$

53,236

 

35.9

%

Adjustments:

                                    

Amortization of completed technology

  

4,306

 

18.9

   

3,772

 

30.0

   

2,742

 

18.1

   

6,373

 

4.0

   

5,627

 

3.6

   

4,901

 

3.3

 

Purchase accounting impact on inventory

  

 

   

 

   

2,912

 

19.3

   

 

   

 

   

2,912

 

2.0

 

Transformation costs(1)

  

351

 

1.5

   

 

   

 

   

710

 

0.4

   

 

   

 

 

Non-GAAP adjusted gross profit

 

$

7,378

 

32.4

%

 

$

3,541

 

28.1

%

 

$

4,343

 

28.7

%

 

$

70,468

 

44.3

%

 

$

67,139

 

43.5

%

 

$

61,049

 

41.1

%

                         
  

Sample Management Solutions

 

Multiomics

  

Six Months Ended

 

Six Months Ended

Dollars in thousands

 

March 31, 2024

 

March 31, 2023

 

March 31, 2024

 

March 31, 2023

GAAP gross profit

 

$

66,215

 

43.2

%

 

$

59,579

 

40.7

%

 

$

56,192

 

45.0

%

 

$

54,719

 

44.4

%

Adjustments:

                        

Amortization of completed technology

  

1,843

 

1.2

   

1,362

 

0.9

   

2,079

 

1.7

   

2,441

 

2.0

 

Transformation costs(1)

  

359

 

0.2

   

 

   

 

   

 

 

Non-GAAP adjusted gross profit

 

$

68,417

 

44.7

%

 

$

60,942

 

41.6

%

 

$

58,271

 

46.6

%

 

$

57,160

 

46.3

%

                         
  

B Medical Systems

 

Segment Total

  

Six Months Ended

 

Six Months Ended

Dollars in thousands

 

March 31, 2024

 

March 31, 2023

 

March 31, 2024

 

March 31, 2023

GAAP gross profit

 

$

2,490

 

7.0

%

 

$

12,803

 

22.5

%

 

$

124,897

 

39.8

%

 

$

127,101

 

38.9

%

Adjustments:

                        

Amortization of completed technology

  

8,078

 

22.8

   

5,265

 

9.2

   

12,000

 

3.8

   

9,070

 

2.8

 

Purchase accounting impact on inventory and contracts acquired

  

 

   

5,781

 

10.2

   

 

   

5,781

 

1.8

 

Transformation costs(1)

  

351

 

1.0

   

 

   

710

 

0.2

   

 

 

Non-GAAP adjusted gross profit

 

$

10,919

 

30.9

%

 

$

23,849

 

41.9

%

 

$

137,607

 

43.9

%

 

$

141,951

 

43.4

%

  

(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

  

March 31, 

 

December 31, 

 

March 31, 

 

March 31, 

 

December 31, 

 

March 31, 

 

March 31, 

 

December 31, 

 

March 31, 

Dollars in thousands

 

2024

 

2023

 

2023

 

2024

 

2023

 

2023

 

2024

 

2023

 

2023

GAAP operating (loss) profit

 

$

(3,005)

 

$

(1,723)

 

$

(7,221)

 

$

(4,006)

 

$

(4,489)

 

$

(5,037)

 

$

(5,810)

 

$

(8,181)

 

$

(9,021)

Adjustments:

                           

Amortization of completed technology

  

1,027

  

816

  

933

  

1,040

  

1,039

  

1,226

  

4,306

  

3,772

  

2,742

Purchase accounting impact on inventory

  

  

  

  

  

  

  

  

  

2,912

Amortization of other intangible assets

  

52

  

51

  

212

  

  

  

  

  

  

Transformation costs(1)

  

359

  

  

  

  

  

  

351

  

  

Other adjustment

  

  

  

  

  

(1)

  

  

  

  

Non-GAAP adjusted operating (loss) profit

 

$

(1,567)

 

$

(856)

 

$

(6,076)

 

$

(2,966)

 

$

(3,451)

 

$

(3,810)

 

$

(1,153)

 

$

(4,409)

 

$

(3,367)

                            
  

Total Segments

 

Corporate

 

Total

  

Quarter Ended

 

Quarter Ended

 

Quarter Ended

  

March 31, 

 

December 31, 

 

March 31, 

 

March 31, 

 

December 31, 

 

March 31, 

 

March 31, 

 

December 31, 

 

March 31, 

Dollars in thousands

 

2024

 

2023

 

2023

 

2024

 

2023

 

2023

 

2024

 

2023

 

2023

GAAP operating (loss) profit

 

$

(12,821)

 

$

(14,393)

 

$

(21,279)

 

$

(134,134)

 

$

(12,284)

 

$

8,302

 

$

(146,955)

 

$

(26,677)

 

$

(12,977)

Adjustments:

                           

Amortization of completed technology

  

6,373

  

5,627

  

4,901

  

  

  

  

6,373

  

5,627

  

4,901

Purchase accounting impact on inventory

  

  

  

2,912

  

  

  

  

  

  

2,912

Amortization of other intangible assets

  

52

  

51

  

212

  

6,602

  

6,811

  

7,297

  

6,654

  

6,862

  

7,509

Transformation costs(1)

  

710

  

  

  

3,736

  

41

  

10

  

4,446

  

41

  

10

Restructuring charges

  

  

  

  

7,344

  

1,120

  

1,499

  

7,344

  

1,120

  

1,499

Impairment of goodwill and intangible assets

  

  

  

  

115,975

  

  

  

115,975

  

  

Contingent consideration adjustment

  

  

  

  

  

  

(17,145)

  

  

  

(17,145)

Merger and acquisition costs and costs related to share repurchase (2)

  

  

  

  

426

  

4,321

  

19

  

426

  

4,321

  

19

Other adjustment

  

  

(1)

  

  

  

  

  

  

(1)

  

Non-GAAP adjusted operating (loss) profit

 

$

(5,686)

 

$

(8,716)

 

$

(13,254)

 

$

(51)

 

$

9

 

$

(18)

 

$

(5,737)

 

$

(8,707)

 

$

(13,272)

                   
  

Sample Management Solutions

 

Multiomics

 

B Medical Systems

  

Six Months Ended

 

Six Months Ended

 

Six Months Ended

Dollars in thousands

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

  

2024

 

2023

 

2024

 

2023

 

2024

 

2023

GAAP operating (loss) profit

 

$

(4,728)

 

$

(10,697)

 

$

(8,495)

 

$

(9,518)

 

$

(13,991)

 

$

(9,475)

Adjustments:

                  

Amortization of completed technology

  

1,843

  

1,362

  

2,079

  

2,441

  

8,078

  

5,265

Purchase accounting impact on inventory

  

  

  

  

  

  

5,781

Amortization of other intangibles

  

103

  

260

  

  

  

  

1,365

Transformation costs(1)

  

359

  

  

  

  

351

  

Other adjustment

  

  

  

(1)

  

  

  

Non-GAAP adjusted operating (loss) profit

 

$

(2,423)

 

$

(9,074)

 

$

(6,417)

 

$

(7,075)

 

$

(5,562)

 

$

2,936

                   
  

Total Segments

 

Corporate

 

Total

  

Six Months Ended

 

Six Months Ended

 

Six Months Ended

Dollars in thousands

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

  

2024

 

2023

 

2024

 

2023

 

2024

 

2023

GAAP operating (loss) profit

 

$

(27,214)

 

$

(29,690)

 

$

(146,418)

 

$

(10,973)

 

$

(173,632)

 

$

(40,662)

Adjustments:

                  

Amortization of completed technology

  

12,000

  

9,070

  

  

  

12,000

  

9,070

Purchase accounting impact on inventory

  

  

5,781

  

  

  

  

5,781

Amortization of other intangibles

  

103

  

1,624

  

13,413

  

13,257

  

13,516

  

14,882

Transformation costs(1)

  

710

  

  

3,777

  

(55)

  

4,487

  

(55)

Restructuring and restructuring related charges

  

  

  

8,464

  

2,960

  

8,464

  

2,961

Impairment of goodwill and intangible assets

  

  

  

115,975

  

  

115,975

  

Contingent consideration - fair value adjustments

  

  

  

  

(17,145)

  

  

(17,145)

Merger and acquisition costs and costs related to share repurchase (2)

  

  

  

4,747

  

11,857

  

4,747

  

11,857

Other adjustment

  

(1)

  

  

  

  

(1)

  

Non-GAAP adjusted operating (loss) profit

 

$

(14,402)

 

$

(13,213)

 

$

(42)

 

$

(99)

 

$

(14,444)

 

$

(13,312)

  

(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 Management Solutions

Multiomics

 

B Medical Systems

 

Azenta Total

  

Quarter Ended

Quarter Ended

 

Quarter Ended

 

Quarter Ended

  

March 31, 

 

March 31, 

   

March 31, 

 

March 31, 

    

March 31, 

 

March 31, 

    

March 31, 

 

March 31, 

   

Dollars in millions

 

2024

 

2023

 

Change

2024

 

2023

 

Change

 

2024

 

2023

 

Change

 

2024

 

2023

 

Change

 Revenue

 

$

74

 

$

71

 

4

%

$

62

 

$

62

 

(0)

%

 

$

23

 

$

15

 

51

%

 

$

159

 

$

148

 

7

%

Acquisitions/divestitures

  

  

 

%

 

  

 

%

  

  

 

%

  

  

 

%

Currency exchange rates

  

1

  

 

(1)

%

 

(1)

  

 

1

%

  

0

  

 

(2)

%

  

0

  

 

(0)

%

Organic revenue

 

$

73

 

$

71

 

3

%

$

63

 

$

62

 

1

%

 

$

23

 

$

15

 

49

%

 

$

159

 

$

148

 

7

%

                                    
  

Sample Management Solutions

Multiomics

 

B Medical Systems

 

Azenta Total

  

Six Months Ended

Six Months Ended

 

Six Months Ended

 

Six Months Ended

  

March 31, 

 

March 31, 

   

March 31, 

 

March 31, 

    

March 31, 

 

March 31, 

    

March 31, 

 

March 31, 

   

Dollars in millions

 

2024

 

2023

 

Change

2024

 

2023

 

Change

 

2024

 

2023

 

Change

 

2024

 

2023

 

Change

 Revenue

 

$

153

 

$

146

 

5

%

$

125

 

$

123

 

1

%

 

$

35

 

$

57

 

(38)

%

 

$

313

 

$

327

 

(4)

%

Acquisitions/divestitures

  

1

  

 

(1)

%

 

(0)

  

 

0

%

  

  

 

%

  

1

  

 

(0)

%

Currency exchange rates

  

2

  

 

(1)

%

 

  

 

%

  

1

  

 

(2)

%

  

2

  

 

(1)

%

Organic revenue

 

$

150

 

$

146

 

2

%

$

125

 

$

123

 

2

%

 

$

34

 

$

57

 

(39)

%

 

$

310

 

$

327

 

(5)

%

 

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