-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MBZtFwkYWvP39AeTnh1oY4WXE1eqMCjp2vyLZtfq3zl4J9OOlem5RxxgrPf8bbCB +UIX1Q/mUqsbNb7peDNpzQ== 0000927016-97-003412.txt : 19971219 0000927016-97-003412.hdr.sgml : 19971219 ACCESSION NUMBER: 0000927016-97-003412 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971218 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BROOKS AUTOMATION INC CENTRAL INDEX KEY: 0000933974 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 043040660 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-25434 FILM NUMBER: 97740547 BUSINESS ADDRESS: STREET 1: 15 ELIZABETH DRIVE CITY: CHELMSFORD STATE: MA ZIP: 01824 BUSINESS PHONE: 5084531112 MAIL ADDRESS: STREET 1: 15 ELIZABETH DRIVE CITY: CHELMSBORO STATE: MA ZIP: 01824 10-K 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For fiscal year ended September 30, 1997 or ------------------ [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (no fee required) For the transition period from __________ to ____________. Commission File Number: 0-25434 ------- Brooks Automation, Inc. ----------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware 04-3040660 -------- ---------- (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 15 Elizabeth Drive, Chelmsford, Massachusetts 01824 - --------------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) 978-262-2566 ------------ (Registrant's Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 par value Rights to Purchase Common Stock Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. [ ] The aggregate market value of the registrant's Common Stock, $.01 par value, held by non-affiliates of the registrant as of December 12, 1997 was $129,494,399 based on the closing price of $12.88 on that date on the Nasdaq Stock Market. As of December 12, 1997, 10,053,913 shares of the registrant's Common Stock, $.01 par value, were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Annual Report to Stockholders for the fiscal year ended September 30, 1997 are incorporated by reference in Part II and Part IV of this Report. Portions of the registrant's Proxy Statement involving the election of directors, which is expected to be filed within 120 days after the end of the registrant's fiscal year, are incorporated by reference in Part III of this Report. PART I ITEM 1. BUSINESS Brooks Automation, Inc. (the "Company") is a leading worldwide independent developer, manufacturer and supplier of substrate handling robots, modules, software, controls and fully integrated cluster tool handling systems for the semiconductor and flat panel display process equipment industries. The Company's products have evolved from individual robots used to transfer wafers in advanced production equipment to fully integrated handling system solutions that increase the throughput and utilization of semiconductor and flat panel display process equipment. In 1996, the Company acquired Techware Systems Corporation (now Brooks Canada), a designer and supplier of integrated equipment control software for the semiconductor and related industries, expanding its software and control capability. In 1997, the Company introduced a line of products for the atmospheric handling market, including in-line and controlled environment systems, robots, aligners and traversers. Products The Company offers a full complement of semiconductor wafer and flat panel display substrate handling systems. The Company has developed comprehensive product lines that encompass automation modules, complete handling systems and integrated software and controls for its targeted markets. The Company's systems, robots and modules are designed, developed and produced with similar technologies and can use the Company's ClusterLink software. The Company uses the synergies of its complementary products to respond to changing industry demands such as processing 300mm semiconductor wafers and the larger, fourth generation flat panel display substrates. The Company believes that its products offer significant advantages in a number of areas, including those set forth below: Throughput. The Company's patented LeapFrog robots have been able to achieve significant improvements in throughput compared to other robots. The Company also has been able to increase throughput by developing patented algorithms to calculate efficient trajectories and acceleration and deceleration profiles (time optimal trajectories) for its robot arms while reducing vibrations and maintaining position control of the substrate being transported. The Company has developed system software to improve cluster tool throughput. By combining digital signal processing ("DSP") technology with time optimal trajectory software, the Company believes that it has achieved additional reductions in transfer time. Reliability. The Company has developed and implemented a rigorous design and test program to enhance and evaluate product reliability. The Company's reliability initiative is guided by the computer-based reliability models developed by SEMATECH and Sandia National Laboratories. The magnetic drive in the Company's latest generation robots transmits force magnetically, without piercing the vacuum barrier, and eliminates the need for moveable vacuum seals. By designing robots with fewer moving parts and eliminating moveable seals, the Company believes that it will be able to increase the reliability of its transfer robots significantly. The Company's goal is to continue to increase mean time between failures. Accuracy. As wafer and substrate sizes increase and placement accuracy becomes more demanding, it is becoming increasingly important to minimize tracking errors, substrate sliding and arm deflection (the bending or wobbling of the robot arm). The Company's transfer robots contain a closed loop servo control which monitors and maintains placement accuracy in the rotational axis by obtaining constant positioning feedback. Many other transfer robots use an open loop stepper control system which commands a robot to move a specified number of steps with limited or no feedback as to the final position of the robot. These stepper systems can lead to misplacement of the robot arm if the number of steps is miscounted. To further enhance tracking, the Company has incorporated a closed loop feedback system with a proprietary DSP-based controller in its latest generation robots. Contamination Control. The Company has designed its wafer and flat panel display substrate handling systems and modules to reduce contamination by using several design criteria: limited moving parts within the tool environment and above the wafer or substrate plane; picking and placing with a vertical motion to prevent wafer or substrate sliding on process module surfaces and cassette slots; gentle handling motions which reduce relative wafer or substrate vibration and movement on the transfer robot end effectors; controlled load lock pumping and venting; incorporation of materials that reduce contamination; and assembly, test and packaging in the Company's clean rooms. The Company currently manufactures products for the semiconductor and flat panel display markets. The following table lists the Company's product offerings within each of the markets it serves: 2
- --------------------------------------------------------------------------------------------- Market Product Lines - --------------------------------------------------------------------------------------------- Semiconductor Vacuum Products Central Wafer Handling Systems Transfer Robots Thermal Conditioning Modules (Cool and Degas) Cassette Elevator Load Locks Aligners Factory Automation Interface Modules System Software and Controls - --------------------------------------------------------------------------------------------- Semiconductor Atmospheric and Central Wafer Handling Systems Inert Environment Products In-line Wafer Handling Systems Transfer Robots Robot Traversers Thermal Conditioning Modules (Cool) Cassette Elevator Load Locks Aligners Factory Automation Interface Modules System Software and Controls - --------------------------------------------------------------------------------------------- Flat Panel Display Products Central Substrate Handling Systems Transfer Robots Cassette Elevator Load Locks Thermal Conditioning Modules (Degas) System Software and Controls - ---------------------------------------------------------------------------------------------
Semiconductor Vacuum Products Vacuum Central Wafer Handling Systems The Company's family of Marathon vacuum central wafer handling systems handle wafer sizes of 100mm to 300mm in diameter, are offered with four to eight sides (referred to as ports) and have vacuum ranges of 10/-3/ to 10/-8/ torr (a measure of vacuum pressure). Each port can accommodate process modules meeting SEMI/MESC standards. Using a two load lock configuration, the Company's Marathon 800 eight-sided central wafer handling system can accommodate up to six process modules. The Company's Marathon systems currently incorporate either the Company's single VacuTran or dual MultiTran frog-arm vacuum transfer robot, one or more of the Company's vacuum cassette elevator (VCE) load locks, the Company's InLigner wafer aligner, and, if required, the Company's InCooler wafer cooling module. The Company has been able to increase the availability of ports for use with process modules by developing a wafer aligner and a cooling module which mount between a vacuum cassette elevator load lock or process module and the central wafer handling chamber. The Company is developing degas modules for its Marathon systems. The Company has also developed tool control ClusterLink 3 system software to control its vacuum wafer handling systems, graphical user interface and process modules. The software interfaces with process tool controllers and provides environment control, profiled load lock pumping and venting, error recovery diagnostics, safety control and scheduling of wafer transfers. When providing a turn-key solution that includes the Company's system control and scheduling software, the Company is able to provide guarantees relating to throughput and particle contamination. In 1997, the Company developed a next-generation 200mm wafer handling system, the Marathon Express 800, which features the dual same-side LeapFrog robot and offers improvement to throughput, vacuum performance and serviceability. In anticipation of the emergence of next-generation 300mm wafers, the Company has developed central wafer handling systems (the Marathon 4000 and 6000) and is developing a Marathon Express 8000 eight-sided configuration. These systems have incorporated handling technology developed by the Company for flat panel display substrates, which are generally significantly more demanding to handle than wafers. 3 Vacuum Transfer Robots The Company's next-generation vacuum transfer robot, the MagnaTran 7, is a second generation magnetic drive robot which incorporates the Company's patented time optimal trajectory software algorithims to control and monitor its operation. The MagnaTran 7 is smaller and lighter than its predecessor. Building on its experience in developing robot wafer transfer technology, the Company has developed the dual, same-side LeapFrog high-productivity arm configuration. The LeapFrog arm is only available on the MagnaTran 7 robot and is a feature of the Company's Marathon Express central handling systems. These robots are constructed to SEMI/MESC standards and are sold separately for use with other vacuum wafer handling applications. The Company believes that the technical advances implemented to meet the requirements of the flat panel display industry enabled the Company to adopt its MagnaTran robots, with minimal technical modifications, to handle 300mm wafers. Other Vacuum Wafer Handling and Conditioning Modules Vacuum Cassette Elevator Load Locks. The Company has developed a family of vacuum cassette elevator load locks to hold and index (raise and lower) cassettes of wafers for cluster tools and other vacuum automated equipment. The Company's VCE 4 200mm cassette load lock features flexible and changeable interfaces, is field upgradable and is available with either a manual or automatic door configuration. The automatic door uses an innovative low particle, low profile drive mechanism, which opens vertically below the cluster platform for SMIF, automated guided vehicle ("AGV") and rail guided vehicle ("RGV") compatibility. The Company has developed the VCE 5 for 300mm wafers with a batch wafer transfer arm and a front opening unified pod ("FOUP") interface. The Company is developing the VCE 7 for 300mm wafers to interface with the Company's Caliber atmospheric, in-line handling system. Vacuum Aligners. Wafer processing requires precise alignment and, often, orientation of a wafer for processing. The Company's InLigner intermodule wafer aligner provides fast one-step wafer alignment by optically sensing the location of the wafer on the aligner and communicating that position to the vacuum transfer robot. Using this information, the transfer robot adjusts the placement of its arm to pick up the wafer in the proper position. The InLigner is designed for intermodule mounting between a module, such as the cassette load lock and the central wafer handling chamber, in order to conserve a port of the cluster tool. The Company's InLigner 3 is designed for 300mm wafer alignment. The Company is developing a new family of aligners for 200mm and 300mm wafers, the TopLigners, that mount from the top in the central transport chamber and offer improved serviceability. Vacuum Cool Modules. The Company's InCooler intermodule cool station cools wafers after hot processing to a temperature that allows placement into a plastic wafer cassette. This module is also designed for intermodule mounting. The Company's InCooler 3 is designed for 300mm wafer applications. The Company is developing a family of new cooling modules for 200mm and 300mm wafers, the TopCoolers, that mount from the top in the central transport chamber and offer improved serviceability. Vacuum Degas Modules. The Company is developing degas modules to remove water from the surface of the wafer. The Company is developing a stand alone 200mm and a top mount 300mm module that offer improved serviceability. Semiconductor Atmospheric and Inert Environment Products Building upon its vacuum wafer handling systems, the Company is pursuing the development of a broad line of products for atmospheric applications. Atmospheric wafer handling systems may be segregated into two subcategories: the traditional ambient atmospheric wafer handling systems and "inert" (principally nitrogen) environment wafer handling systems. The traditional atmospheric wafer handling systems include fully integrated automated wafer handling platforms for open, ambient air in-line wafer handling platforms. The inert environment wafer handling systems include fully integrated, automated wafer handling platforms for at or above atmospheric pressure cluster tools. Atmospheric Wafer Handling Systems The Company's Caliber atmospheric, in-line wafer handling systems handle wafer sizes from 150mm to 300mm in diameter and are offered with two to four cassette staging locations and may be operated in Class 1 clean room environments. These configurations have been developed to meet broad market requirements. The Caliber 200 and 400 are used for 200mm wafer open cassettes and the Caliber 400 S is being developed for use with 200mm SMIF 4 applications. The Company is developing the Caliber 2000 in-line wafer handling system to handle 300mm wafers in open cassette or FOUP applications. The Company's Caliber systems incorporate the Company's single scara-arm AcuTran atmospheric transfer robot, the Company's AcuTrav robot traverser, two or more of the Company's cassette staging locations, and, if required, the Company's AcuLigner wafer aligner. The Company's Caliber systems also incorporate a system controller to control all wafer handling functions and to interface to the process tool's primary controller. Atmospheric Transfer Robots Building on its experience in developing transfer robots and employing its magnetic direct drive technology, the Company has developed the AcuTran 3, its next-generation atmospheric transfer robot, to handle up to 300mm wafers. These robots are a standard feature of the Company's Caliber in-line wafer handling systems, are constructed to SEMI standards and are sold separately for use with other atmospheric wafer handling applications. The Company's robots incorporate DSP technology and patented time optimal trajectory software to control and monitor their operation. Other Atmospheric Wafer Handling Modules Atmospheric Robot Traverser. The Company's AcuTrav provides high speed horizontal motion permitting the AcuTran 3 robot to access multiple process tool load ports and cassette staging locations. The AcuTrav uses direct drive mechanism which allows high speed motions comparable to the Company's robot family. Atmospheric Aligners. The Company's AcuLigner 3 wafer aligner is being designed for fast one-step 150mm to 300mm wafer alignment by optically sensing the location of the wafer on the aligner and communicating that position to the vacuum transfer robot. Using this information, the transfer robot adjusts the placement of its arm to pick up the wafer in the proper position. Inert Environment Wafer Handling Systems In 1997, the Company introduced a new central wafer handling system to address market needs for reduced water vapor environment central handling systems for high temperature wafer processing (e.g. rapid thermal processing and epitaxial deposition). Building upon its expertise in vacuum central wafer handling systems and modules, the Company developed the Atmospheric Express 600 "inert" environment wafer handling system for 150mm to 200mm wafers. This inert environment central wafer handling system transfers wafers at or above atmospheric pressure in a principally nitrogen environment. The Atmospheric Express incorporate robots and modules from the Company's vacuum wafer handling product line. The Company is developing the Atmospheric Express 6000 to handle up to 300mm wafers. Flat Panel Display Products In 1994, the Company introduced a family of vacuum central substrate handling systems and modules for the flat panel display deposition and etch process equipment markets, shipping its first Hercules central substrate handling system for a flat panel display vacuum cluster tool in July 1994. The Hercules systems can handle flat panel display substrates from 350mm x 460mm to 600mm x 720mm in size. The Company is developing a next generation flat panel display platform, for substrates up to approximately 1 meter x 1 meter. The Hercules system includes the Company's MagnaTran 60 magnetically driven frog-arm vacuum transfer robot with two or three axes of motion and single or dual arm options, a single substrate load lock, or a 20 to 30 substrate cassette elevator load lock (VCE 40), and a seven substrate batch degas module. The Company is developing a next generation magnetic drive robot, the MagnaTran 70, for the flat panel display market. The MagnaTran 70 robot series is expected to be smaller and lighter and to feature an optional extended vertical axis for deployment in the Company's next generation platforms. 5 Customers The Company's customers are primarily semiconductor wafer and flat panel display substrate OEMs and semiconductor manufacturers who are retrofitting the vacuum automation of their process equipment or developing advanced process equipment for internal use. The Company's current customers are primarily located in the United States, Japan, South Korea and Europe. The Company intends to market its developing family of atmospheric central wafer handling equipment to its existing customers in the vacuum and flat panel display markets and other potential customers. In fiscal 1997, 1996 and 1995, Lam Research Corporation ("Lam") accounted for 21% of the Company's revenues, and sales to the Company's top ten customers accounted for approximately 71%, 69% and 75% of revenues, respectively. A reduction or delay in orders from Lam or other significant customers could have a material adverse effect on the Company's results of operations. See "Factors That May Affect Future Results--Customer Concentration" in Management's Discussion and Analysis on Financial Conditions and Results of Operations for further discussion. Marketing, Sales and Customer Support The Company markets and sells its wafer and substrate handling systems and modules in the United States, Japan, South Korea, Taiwan and Europe through its direct sales and marketing organization. As of September 30, 1997, 45 persons were engaged in sales and marketing activities worldwide. The selling process for the Company's products is often multilevel, involving a team comprised of individuals from sales, marketing, engineering, operations and senior management. Each significant customer is assigned a team that engages the customer at different organization levels to provide planning and product customization and to assure open communication and support. The Company's marketing activities also include participation in trade shows, publication of articles in trade journals, participation in industry forums and distribution of sales literature. To enhance this communication and support, particularly with its international customers, the Company maintains technology centers in California, British Columbia, South Korea and Japan. These facilities, together with the Company's headquarters, maintain demonstration equipment for customers to evaluate. Customers are also encouraged to discuss the features and applications of the Company's demonstration equipment with the Company's engineers located at these facilities. The Company also maintains regional sales and service personnel in Taiwan, the United Kingdom, Phoenix, Arizona and Austin, Texas. The Company has recently experienced significant growth in foreign revenues. In fiscal 1997, 1996 and 1995, foreign revenues accounted for 38%, 20% and 12%, respectively, of the Company's revenues. The Company expects foreign revenues to continue to represent a significant percentage of total revenues in the foreseeable future. However, there can be no assurance that geographical growth rates, if any, in the foreseeable future, particularly in Japan and South Korea which are suffering regional economic downturns, will be comparable to those achieved in fiscal 1997. See "Factors That May Affect Future Results--Risks of International Sales and Operations" in Management's Discussion and Analysis on Financial Conditions and Results of Operations and Note 10 to the Company's Consolidated Financial Statements for further discussion. In 1997, the Company developed a new sales and marketing tool, a process tool throughput simulator, to enable the evaluation of various wafer handling system configurations to identify the preferred tool configuration for a specific application. This tool simulates the movement of wafers with execution times, scheduling algorithms, and flow sequences similar to those of actual process tools and outputs this information visually. This tool is capable of comparing multiple tool configurations simultaneously for preferred fit comparison. The Company provides support to its customers with (i) telephone technical support access 24-hours a day, 365 days a year, (ii) direct training programs and (iii) operating manuals and other technical support information for the Company's products. The Company maintains spare parts inventories all locations to enable its personnel to serve the Company's customers and repair their products more efficiently. Competition The semiconductor and flat panel display process equipment manufacturing industries are highly competitive and characterized by continual change and improvement in technology. Although other independent companies sell vacuum and atmospheric wafer and flat panel display substrate handling automation systems and vacuum transfer robots to OEMs, the Company believes that its primary competition is from the larger, integrated semiconductor and flat panel display OEMs that satisfy their substrate handling needs in-house rather than by purchasing handling systems or modules from an independent source such as the Company. Such OEMs comprise the majority of the Company's 6 current and potential customers. Applied Materials Inc. ("Applied Materials"), the leading process equipment OEM, develops and manufactures its own central wafer handling systems and modules. The Company believes that most vacuum central wafer handling systems and modules are manufactured in-house by OEMs. Many of the companies in these industries have significantly greater research and development, clean room manufacturing, marketing and financial resources than the Company. Many OEMs have substantial resources and expertise in substrate handling and automation in vacuum and atmospheric environments and will only purchase the Company's products if the Company can demonstrate improved product performance as measured by throughput, reliability, contamination control and accuracy, at an acceptable price. The Company believes that it competes favorably with OEMs and other independent suppliers with respect to all of these factors. However, there can be no assurance that the Company will be successful in selling its products to OEMs that currently satisfy their wafer and flat panel handling needs in-house or from other independent suppliers, regardless of the performance or the price of the Company's products. The Company's sale of its products for the flat panel display process equipment market is heavily dependent upon its penetration of the Japanese market. The Company is also seeking to expand its presence in the Japanese semiconductor process equipment market. In addressing the Japanese markets, the Company may be at a competitive disadvantage to Japanese suppliers. See "Factors That May Affect Future Results--Risks of International Sales and Operations" in Management's Discussion and Analysis on Financial Conditions and Results of Operations for further discussion. Research and Development The Company's research and development efforts are focused on developing new products for the semiconductor and flat panel display process equipment industries and further enhancing the functionality, reliability and performance of existing products. The Company's engineering, marketing, operations and management personnel have developed close collaborative relationships with many of their customer counterparts and have used these relationships to identify market demands and target its research and development to meet those demands. The Company's current research and development efforts include the continued development and enhancement of the Company's semiconductor and flat panel display products, including 300mm Marathon Express vacuum central wafer handling systems and modules, fourth generation flat panel display substrate handling systems and modules, control and scheduling software, and atmospheric handling systems and modules. There can be no assurance that the Company will be able to develop new products effectively, to enhance its existing products, or to respond effectively to technological changes or new industry standards or developments on a timely basis, if at all. In fiscal 1997, 1996 and 1995, the Company's research and product development expenses were $14.2 million, $12.4 million and $6.8 million, respectively, representing 16.5%, 13.7% and 13.4% of the Company's revenues, respectively. See "Factors That May Affect Future Results--New Products and Rapid Technological Change" in Management's Discussion and Analysis on Financial Conditions and Results of Operations for further discussion. Manufacturing The Company's manufacturing operations consist primarily of product assembly, integration, and testing. The Company has adopted stringent quality assurance procedures that include standard design practices, component selection procedures, vendor control procedures and comprehensive reliability testing and analysis to assure the performance of its products. The Company received ISO 9001 certification in February 1996. The Company employs a just-in-time manufacturing strategy. The Company believes that this strategy, coupled with the outsourcing of noncritical subassemblies, reduces fixed operating costs, improves working capital efficiency, reduces manufacturing cycle times and improves flexibility to rapidly adjust its production capacities. While the Company often uses single source suppliers for certain key components and common assemblies to achieve quality control and the benefits of economies of scale, the Company believes that these parts and materials are readily available from other supply sources. Patents and Proprietary Rights The Company relies upon trade secrets and patents to protect its technology. Due to the rapid technological change that characterizes the semiconductor and flat panel display process equipment industries, the Company believes that the improvement of existing technology, reliance upon trade secrets and unpatented proprietary know-how and the 7 development of new products may be more important than patent protection in establishing and maintaining a competitive advantage. It is the Company's policy to require all technical and management personnel to enter into nondisclosure agreements. Nevertheless, the Company has obtained patents and will continue to make efforts to obtain patents, when available, in connection with its product development program. There can be no assurance that any patent obtained will provide protection or be of commercial benefit to the Company, or that its validity will not be challenged. The Company had obtained 20 United States patents and had 30 United States patent applications pending on its behalf. In addition, the Company had obtained 10 foreign patents and had 43 foreign patent applications pending on its behalf. The Company's United States patents expire at various times from 1999 to 2017. There can be no assurance that the Company's pending patent applications or any future applications will be approved, that any patents will provide it with competitive advantages or will not be challenged by third parties, or that the patents of others will not have an adverse effect on the Company's ability to do business. Because foreign patents may afford less protection under foreign law than is available under United States patent law, there can be no assurance that any such patents issued to the Company will adequately protect the Company's proprietary information. There can be no assurance that others will not independently develop similar products, duplicate the Company's products or, if patents are issued to the Company, design around the patents issued to the Company. Others may have filed and in the future may file patent applications that are similar or identical to those of the Company. To determine the priority of inventions, the Company may have to participate in interference proceedings declared by the United States Patent and Trademark Office that could result in substantial cost to the Company. No assurance can be given that any such patent application will not have priority over patent applications filed by the Company. The Company also relies upon trade secret protection, employee and third-party nondisclosure agreements and other intellectual property protection methods to protect its confidential and proprietary information. Despite these efforts, there can be no assurance that others will not independently develop substantially equivalent proprietary information and techniques or otherwise gain access to the Company's trade secrets or disclose such technology or that the Company can meaningfully protect its trade secrets. There has been substantial litigation regarding patent and other intellectual property rights in the semiconductor related industries. The Company had received notice from General Signal Corporation ("General Signal") alleging infringements of General Signal's patent rights, relating to cluster tool architecture, by certain of the Company's products. The notification advised the Company that General Signal was attempting to enforce its rights to those patents in litigation against Applied Materials, Inc. ("Applied Materials"), and that, at the conclusion of that litigation, General Signal intended to enforce its rights against the Company and others. According to a recent press release issued by Applied Materials, Applied Materials settled its litigation with General Signal by acquiring ownership of five General Signal patents. Although not verified, these five patents would appear to be the patents referred to by General Signal in its prior notice to the Company. Applied Materials has not contacted the Company regarding these newly-acquired patents. In 1992, at the time that General Signal first raised patent claims in the cluster tool area, the Company joined with six major semiconductor process tool equipment manufacturers in forming an "Ad Hoc Committee for the Defense against General Signal Cluster Tool Patents." At that time, the members of the Ad Hoc Committee notified General Signal that the member companies were of the opinion that the General Signal patents were invalid based on (i) prior art, (ii) inequitable conduct before the Patent & Trademark Office and (iii) estoppel as a result of General Signal's activities in establishing standards for cluster tools and interfaces within the semiconductor industry. The Company believes that the position taken by the Ad Hoc Committee remains valid. However, if the holder of these patents were to seek to enforce these patents against the Company, there can be no assurance that the Company would prevail in such litigation. The Company has in the past been, and may in the future be, notified that it may be infringing intellectual property rights possessed by other third parties. Any patent litigation would be costly and could divert the efforts and attention of the Company's management and technical personnel, which could have a material adverse effect on the Company's business, financial condition and results of operations. There can be no assurance that infringement claims by third parties or other claims for indemnification by customers or end users of the Company's products resulting from infringement claims will not be asserted in the future or that such assertions, if proven to be true, will not materially and adversely affect the Company's business, financial condition and results of operations. If any such claims are asserted against the Company's intellectual property rights it may seek to enter into a royalty or licensing arrangement. There can be no assurance, however, that a license will be available on reasonable terms or at all. The Company could 8 decide, in the alternative to resort to litigation to challenge such claims or to design around the patented technology. Such actions could be costly and would divert the efforts and attention of the Company's management and technical personnel, which would materially and adversely affect the Company's business, financial condition and results of operations. See "Factors That May Affect Future Results--Intellectual Property Risks" in Management's Discussion and Analysis on Financial Conditions and Results of Operations for further discussion. Backlog Backlog for the Company's products as of September 30, 1997 and 1996 totaled $43.8 million and $35.6 million, respectively. Backlog consists of purchase orders for which a customer has scheduled delivery within the next 12 months. Orders included in the backlog may be canceled or rescheduled by customers without significant penalty. Backlog as of any particular date should not be relied upon as indicative of the Company's revenues for any future period. Employees As of September 30, 1997, the Company had approximately 518 employees. Of these, 161 were involved in engineering, 45 in sales and marketing, 265 in global customer support and manufacturing operations and 47 in general and administrative. The Company believes its future success will depend in large part on its ability to attract and retain highly skilled employees. None of the employees of the Company are covered by a collective bargaining agreement. The Company considers its relationships with its employees to be good. ITEM 2. PROPERTIES The Company has a seven year lease, beginning May 1995, for its headquarters and manufacturing facility. The facility has two stories with approximately 130,000 square feet of space located in Chelmsford, Massachusetts. The lease provides for the Company to move into all the space over a three year period ending May 1998 with the Company occupying a minimum of approximately 83,000 square feet in the first year, 93,000 square feet in the second year, 108,000 square feet in the third year and the entire space thereafter. The Company also maintains sales and service offices in Santa Clara, California, Tokyo, Japan, Seoul, South Korea and Kingston, England. In August 1996, the Company entered into a six year lease for a new facility for Brooks Canada. The new facility is a shared, three story building with approximately 41,000 square feet of space and is located in Richmond, British Columbia. The Company believes that these facilities are adequate for its current needs and that it can obtain additional space at commercially reasonable rates when and as required. ITEM 3. LEGAL PROCEEDINGS The Company is not a party to any material pending legal proceedings. See "Patents and Proprietary Rights in Business" for a description of certain potential patent disputes. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the quarter ended September 30, 1997, no matters were submitted to a vote of security holders through the solicitation of proxies or otherwise. 9 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The market for the Company's common stock and related stockholder matters, which appear in the Brooks Automation, Inc. Annual Report to Stockholders, are hereby incorporated by reference in this Form 10-K Annual Report. ITEM 6. SELECTED FINANCIAL DATA The selected financial data for the five years ended September 30, 1997, which appear in the Brooks Automation, Inc. Annual Report to Stockholders, are hereby incorporated by reference in this Form 10-K Annual Report. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis of Financial Conditions and Results of Operations, which appears in the Brooks Automation, Inc. Annual Report to Stockholders is hereby incorporated by reference in this Form 10-K Annual Report. ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements, together with the report thereon of Price Waterhouse LLP dated November 12, 1997, appearing in the Brooks Automation, Inc. Annual Report to Stockholders are hereby incorporated by reference in this Form 10-K Annual Report. 10 PART III ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by this Item 10 is hereby incorporated by reference to the Company's definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item 11 is hereby incorporated by reference to the Company's definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this Item 12 is hereby incorporated by reference to the Company's definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this Item 13 is hereby incorporated by reference to the Company's definitive proxy statement to be filed by the Company within 120 days after the close of its fiscal year. 11 PART IV ITEM 14. EXHIBITS
Page in Annual Report* -------------- (a) The following documents are filed as part of this report: (1) Financial Statements: Consolidated Balance Sheet at September 30, 1997 and 1996........................................26* Consolidated Statement of Income for the three years ended September 30, 1997............................................................27* Consolidated Statement of Changes in Stockholders' Equity for the three years ended September 30, 1997.............................................28* Consolidated Statement of Cash Flows for the three years ended September 30, 1997............................................................29* Notes to Consolidated Financial Statements.....................................................30-41* Report of Independent Accountants.................................................................42* (2) Financial Statement Schedules: Report of Independent Accountants on Financial Statement Schedule..............................................................................13 For the three years ended September 30, 1997 -- II. Valuation and Qualifying Accounts...........................................................14
Other schedules for the year ended September 30, 1997 are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto. * Incorporated by reference from the indicated pages of the 1997 Annual Report to Stockholders. 12 Report of Independent Accountants on Financial Statement Schedule To the Board of Directors of Brooks Automation, Inc. Our audits of the consolidated financial statements referred to in our report dated November 12, 1997 appearing on page 42 of the 1997 Annual Report to Stockholders of Brooks Automation, Inc. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 14(a) of this Form 10-K. In our opinion, this Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Price Waterhouse LLP Boston, Massachusetts November 12, 1997 13 BROOKS AUTOMATION, INC. Schedule II - Valuation and Qualifying Accounts and Reserves (in thousands)
Additions Balance at Charged to Charged to Deductions Balance beginning costs and other and at end Description Year ended of period expenses accounts write-offs of period - ------------------------------- ------------------ --------- -------- -------- ---------- --------- Allowance for doubtful accounts September 30, 1997 $ 100 $ 162 $ - $ (102) $ 160 September 30, 1996 80 20 - - 100 September 30, 1995 80 - - - 80
14 (a)3. EXHIBITS - ---------------
Exhibit No. Reference ----------- --------- 2.01 Merger Agreement relating to the reincorporation of the A** Registrant in Delaware 3.01 Certificate of Incorporation of the Registrant A** 3.02 Bylaws of the Registrant A** 3.03 Certificate of Designation of Series A Junior Participating H** Preferred Stock 4.01 Specimen Certificate for shares of the Registrant's Common A** Stock 4.02 Description of Capital Stock (contained in the Certificate A** of Incorporation of the Registrant, filed as Exhibit 3.01) 4.03 Rights Agreement dated July 23, 1997 I** 10.01 Agreement between the Registrant and Robert J. Therrien A** 10.02 Employment Agreement between the Registrant and Robert J. A** Therrien dated as of October 1, 1994* 10.03 Employment Agreement between the Registrant and Stanley D. A** Piekos* 10.04 intentionally omitted 10.05 intentionally omitted 10.06 Form of Indemnification Agreement for directors and officers A** of the Registrant 10.07 Form of Selling Stockholder's Agreement B** 10.08 Lam Promissory Note A** 10.09 Lam Security Agreement A** 10.10 Lam Production and Terms of Purchase Agreement A** 10.11 Lam Term Sheet A** 10.12 Revolving Credit and Security Agreement with US Trust A** 10.13 Loan and Security Agreement with the Massachusetts Business A** Development Corporation 10.14 Guarantee of Robert J. Therrien of Revolving Credit A** Agreement with US Trust and Release
15 10.15 Guarantee of Jeffrey Hohl of Revolving Credit Agreement with A** US Trust and Release 10.16 Guarantee of Robert J. Therrien of Loan Agreement with A** Massachusetts Business Development Corporation 10.17 Guarantee of Norman B. Brooks of Revolving Credit Agreement A** with US Trust and Release 10.18 Lease Extension Agreement C** 10.19 Headquarters Lease B** 10.20 Loan Agreement between Brooks Automation, Inc. and U.S. D** Trust dated June 25, 1996 10.21 intentionally omitted 10.22 Loan Agreement First Amendment Dated April 30, 1997 F** 10.23 Revolving Loan Note First Amendment dated April 30, 1997 F** 10.24 Participation Agreement dated April 30, 1997 F** 10.25 Loan Agreement Second Amendment dated June 30, 1997 G** 10.26 Loan Agreement First Amendment dated June 3, 1997 G** 10.27 Amendment to Master Short Term Foreign Currency Borrowing Filed herewith Agreement with Core States Bank dated June 3, 1997 11.01 Statement re: Computation of Per Share Earnings Filed herewith 13.01 Portions of Brooks Automation, Inc. Annual Report to Filed herewith Stockholders 21.01 Subsidiaries of the Registrant Filed herewith 23.01 Consent of Price Waterhouse LLP Filed herewith 27.01 Financial Data Schedule Filed herewith 99.01 1993 Nonemployee Director Stock Option Plan J** * 99.02 1992 Combination Stock Option Plan K** * 99.30 1995 Employee Stock Purchase Plan E**
-------------------- A Incorporated by reference to the Company's registration statement on Form S-1 (Registration No. 33-87296). The number set forth herein is the number of the Exhibit in said registration statement. B Incorporated by reference to the Company's registration statement on Form S-1 (Registration No. 33-93102). The number assigned to each Exhibit above is the same as the number assigned to the Exhibit in said registration statement. 16 C Incorporated by referenced to the Company's quarterly report on Form 10-Q for the quarterly period ended March 31, 1995. The number assigned to the Exhibit above is the same as the number assigned to the Exhibit in said quarterly report. D Incorporated by reference to the Company's quarterly report on Form 10-Q for the quarterly period ended June 30, 1996. The number assigned to the Exhibit above is the same as the number assigned to the Exhibit in said quarterly report. E Incorporated by reference to the Company's registration statement on Form S-8 (No. 333-07315). The number set forth herein is the number of the Exhibit in said registration statement. F Incorporated by reference to the Company's quarterly report on Form 10-Q for the quarterly period ended December 31, 1996. The number assigned to the Exhibit above is the same as the number assigned to the Exhibit in said quarterly report. G Incorporated by reference to the Company's quarterly report on Form 10-Q for the quarterly period ended June 30, 1997. The number assigned to the Exhibit above is the same as the number assigned to the Exhibit in said quarterly report. H Incorporated by reference to the Company's registration statement on Form S-3 (No. 333-34487). The number assigned to each Exhibit above is the same as the number assigned to the Exhibit in said registration statement. I Incorporated by reference to the Company's current report on Form 8-K filed on August 7, 1997 J Incorporated by reference to the Company's registration statement on Form S-8 (No. 333-22717). The number assigned to each Exhibit above is the same as the number assigned to the Exhibit in said registration statement. K Incorporated by reference to the Company's registration statement on Form S-8 (No. 333-07313). The number assigned to each Exhibit above is the same as the number assigned to the Exhibit in said registration statement. * Management contract or compensatory plan or arrangement. ** In accordance with Rule 12b-32 under the Securities Exchange Act of 1934, as amended, reference is made to the documents previously filed with the Securities and Exchange Commission, which documents are hereby incorporated by reference. (b) REPORTS ON FORM 8-K - --------------------------- The Company filed a Current Report on Form 8-K on August 7, 1997 relating to a Shareholders' Rights Agreement. 17 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BROOKS AUTOMATION, INC. Date: December 18, 1997 By: /s/ Robert J. Therrien --------------------------------- Robert J. Therrien, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
SIGNATURE TITLE DATE --------- ----- ----- /s/ Robert J. Therrien Director and President (Principal December 18, 1997 - -------------------------------------- Executive Officer) Robert J. Therrien /s/ Stanley D. Piekos Chief Financial Officer (Principal December 18, 1997 - -------------------------------------- Financial and Accounting Officer) Stanley D. Piekos /s/ Deborah D. Fox Controller (Principal Accounting December 18, 1997 - -------------------------------------- Officer) Deborah D. Fox /s/ Norman B. Brooks Director December 18, 1997 - -------------------------------------- Norman B. Brooks /s/ Roger D. Emerick Director December 18, 1997 - -------------------------------------- Robert D. Emerick /s/ Amin J. Khoury Director December 18, 1997 - -------------------------------------- Amin J. Khoury
18 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BROOKS AUTOMATION, INC. Date: December 18, 1997 By: --------------------------------- Robert J. Therrien, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
SIGNATURE TITLE DATE --------- ----- ---- - --------------------------------------- Director and President (Principal December 18, 1997 Robert J. Therrien Executive Officer) - --------------------------------------- Chief Financial Officer (Principal December 18, 1997 Stanley D. Piekos Financial and Accounting Officer) - --------------------------------------- Controller (Principal Accounting December 18, 1997 Deborah D. Fox Officer) - --------------------------------------- Director December 18, 1997 Roger D. Emerick - --------------------------------------- Director December 18, 1997 Amin Khoury - --------------------------------------- Director December 18, 1997 Norman B. Brooks
19 EX-10.27 2 AMENDMENT TO MASTER SHORT TERM CURRENCY William G. Sudhaus Senior Vice President Exhibit 10.27 [LETTERHEAD OF CORESTATES BANK APPEARS HERE] June 3, 1997 Mr. Stanley D. Piekos Chief Financial Officer Brooks Automation, Inc. 15 Elizabeth Drive Chelmsford, Ma. 08124 Dear Stan: This letter serves to amend and replace the letter agreement dated June 18, 1996 which established a $3,000,000 discretionary line of credit for foreign currency borrowing. The amount is now being increased to $6,000,000. In addition this letter will serve to amend the date in paragraph 1 (b) Requests for Loans, in ------------------ the Master Short Term Foreign Currency Borrowing Agreement from December 31, 1997 to December 31, 1998, (a copy of which is attached). All other terms and conditions remain the same. BORROWER(S): Brooks Automation Inc. Brooks Automation Canada Corp. Brooks Automation K.K. Brooks automation Ltd. Brooks Automation Massachusetts Securities Corp. LENDER: CoreStates Bank N.A. LOAN TYPE AND AMOUNT: $6,000,000 Unsecured Discretionary Line of Credit AVAILABILITY: The maximum outstanding under this facility at any one time shall be the equivalent of $6,000,000 USD in any other currency mutually agreed between the Borrowers and the Bank. PURPOSE: Working capital and other short term corporate purposes. COLLATERAL: None INTEREST RATE: LIBOR plus 200 b.p. for maturities of 30,60,90 or 180 days. INTEREST PAYMENTS: In case of 30, 60 or 90-day loans, at maturity. In the case of 180-day loans, at the end of 90 days and at maturity. Mr. Stanley D. Piekos, Chief Financial Officer June 3, 1997 Page Two MINIMUM LOANS: $250,000 US dollar equivalent. PREPAYMENTS PROHIBITIONS: LIBOR loans may not be prepaid prior to maturity without a potential breakage fee depending upon the interest rate market at the time of prepayment. REPORTING REQUIREMENTS: 1. Quarterly, within 45 days after the end of each of the first three fiscal quarters. a. Consolidated financial statements prepared by the Company. b. Certificate of covenant compliance with all Bank debt. 2. Within 90 days after the end of each fiscal year. a. Consolidated financial statements prepared and certified by an independent certified public accountant. b. Certificate of covenant compliance. c. Principal financial officer and accountant's statement of no default. 3. Promptly after the filing of the same, copies of all reports, proxy statements and financial statements that the Borrower files with the U.S. Securities and Exchange Commission or any comparable department in a foreign country. OTHER CONDITIONS TO THE LINE OF CREDIT: 1. Master Short Term Borrowing Agreement, Corporate Borrowing Resolution and Negative Pledge Agreement (previously dated 6/18/96 and executed 6/25/96). Mr. Stanley D. Piekos, Chief Financial Officer June 3, 1997 Page Three If the foregoing is satisfactory, please sign this letter and return to my attention. Very truly yours, /s/ R. Thomas Esser R. Thomas Esser Vice President RTE/vb AGREED AND ACCEPTED: /s/ Stanley D. Piekos August 12, 1997 - --------------------------------- ----------------------------- Name and Title Date Stanley D. Piekos Vice President & CFO MASTER SHORT TERM FOREIGN CURRENCY BORROWING AGREEMENT ------------------------------------------------------ June 18, 1996 [LOGO OF CORESTATES BANK APPEARS HERE] Brooks Automation, Inc. Brooks Automation Canada Corp. Brooks Automation K.K. Brooks Automation Ltd. Brooks Automation Massachusetts Securities Corp. 15 Elizabeth Drive Chelmsford, MA 01824 Dear Sirs: The purpose of this Agreement is to supplement the letter agreement dated June 18, 1996 ("Letter Agreement") between us, CoreStates Bank N.A. ("Bank") and you, each of the addressees of this Agreement ("Borrower(s)") to further describe how the foreign currency loans will be made pursuant to the foreign currency line of credit described in the Letter Agreement ("Loan(s)"). The Letter Agreement is attached hereto and incorporated by reference herein. This Agreement does not constitute a commitment to lend or to make advances. It is understood and agreed that any and all Loans will be governed by the following: 1. Requests for Loans. From time to time, before the earlier to occur ------------------ of (a) a Default under Section 10 hereof, or (b) December 31, 1997, your duly authorized officer or other duly authorized person may request Loans by telephone or by letter. If we agree to make a Loan, then we will credit the proceeds to your designated account with us. Upon your request we will forward to you at your address set forth in Paragraph 15 written advices or statements of Loans, which will specify rate or rates of interest payable on the Loans, and such other terms as may have been agreed to. 2. Resolutions Authorizing Loans. Any and all documents required to be ----------------------------- executed in connection with Loans may be signed by any of the officers or other persons duly authorized by your borrowing resolutions as in effect from time to time, provided that a copy of such resolutions is certified by the Secretary or an Assistant Secretary of your corporation and delivered to us. We shall incur no liability to you or any other person in acting on any request for a Loan which we believe in good faith to have been made by a person duly authorized to borrow on your behalf as set forth in your borrowing resolutions. 3. Bank Records Conclusive. The terms of each Loan including the rate ----------------------- of interest thereon and your payments of principal and interest, as well as any special terms and details of each such Loan, shall be established and evidenced by this Agreement, the Letter Agreement and by our records, which shall be conclusively deemed to be correct in the absence of manifest error. 4. Payment of Loans. All Loans shall be payable on demand, time or ---------------- other basis mutually agreed upon at the time the Loan is made. Loans which are payable on a basis other than demand are subject to the prepayment penalties described in the Letter Agreement and may not be prepaid prior to their maturity date or dates without payment of such penalties, if any. Upon the payment in whole or in part of any Loan as provided above, accrued and unpaid interest on the amount repaid shall be simultaneously paid. 5. Interest. (a) Interest on each Loan shall be computed at the -------- applicable LIBOR rate plus 200 basis points and, with resect to 30, 60, or 90 day, Loans shall be payable upon maturity and, with respect to 180 day Loans, shall be payable at 90 days and at maturity. The term LIBOR rate shall mean and refer to LIBOR rate applicable at that time in the country of the foreign currency which is borrowed. (b) Each overdue payment of principal on any Loan and, to the extent permitted by law, each overdue payment of interest shall bear interest, payable on demand, for each day until paid at a rate per annum equal to 2% in excess of the current interest rate applicable to that Loan. (c) Unless otherwise agreed, interest on all Loans shall be computed on the basis of a year of 360 days for each day of the year actually elapsed. 6. Payments. You irrevocably authorize us to effect payments of -------- principal of and interest on all Loans whenever such payment is due and to debit your designated account for the amount of such payment. We shall furnish to you a written confirmation of the amount of each principal and interest payment charged against your designated account. You will pay us promptly such amounts as may be due if your designated account balance is insufficient. All payments of principal and interest on Loans shall be made in the currency of the borrowed funds in immediately available funds free and clear of and without deduction for any taxes, fees or other charges of any nature imposed by any governmental authority, or, if such withholding is required, you shall pay to us the same net amount as if no withholding was made. 7. Payment of Costs. In addition to the principal and interest ---------------- specified in paragraphs 4 and 5, you agree to pay upon demand all costs and expenses (including reasonable attorneys' fees and legal expenses) we incur in enforcing the Loans and this Agreement. 8. Further Evidence of Loans. Upon our request, you hereby agree to ------------------------- execute and deliver to us a promissory note or notes payable to our order to evidence all or any part of any Loans. If any Loan is or shall be evidenced by one or more promissory notes, such note or notes shall be -2- deemed to incorporate by reference, and to be supplemented and modified by, the terms of this Agreement. 9. Security. As security for the payment of all sums owed by you to us, -------- we shall have a lien upon, and security interest in, any balance belonging to you in any of your deposit or other accounts with us and any other amounts or property which from time to time may be owing by us to you or held by us for you. 10. Defaults. The occurrence of any of the following events shall cause -------- you to be in default on any and all outstanding Loans: (a) the non-payment when due of any amount payable on any of the Liabilities and such non-payment continues for five (5) days after such due date (the term "Liabilities" shall mean all loans and advances made under this Agreement and any renewals, extensions and modifications thereof and all of your other existing and future liabilities, whether absolute or contingent, to the Bank regardless of their source or nature and out of whatever transactions arising); (b) the failure of any Obligor to observe or perform any other term of this Agreement or any other agreement or note with Bank or other lender, including without limitation the Loan Agreement and related documents dated June 25, 1996, between Borrower and U.S. Trust (the term "Obligor" includes you and all persons otherwise liable for the payment of all such loans or notes or both and all renewals, extensions or modifications thereof, such as endorsers or guarantors); (c) the entry of any judgment or the issuing of any attachment or garnishment against any Obligor in an amount in excess of $150,000. (d) the dissolution, merger, consolidation or reorganization of any Obligor; (e) if any information furnished by any Obligor proves to have been materially false or misleading when made; (f) the failure of any Obligor to furnish such financial or other information as we may reasonably request; and (g) the insolvency of any Obligor, any assignment for the benefit of creditors of any Obligor or the filing by or against any Obligor of a petition under any provision of any law or statute alleging insolvency or inability to pay debts as they mature. 11. Acceleration. If you are in default as described in Paragraph 10(a) ------------ through (f), at our election evidenced by notice in writing to you, all Loans, whether or not evidenced by a note, shall thereupon become due and payable without presentment, demand or protest, all of which are hereby waived. If you are in default as described in Paragraph 10(g), then forthwith and without any -3- election or notice, all Loans, whether or not evidenced by a note, shall thereupon become due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived. You waive all right to stay of execution and exemption of property in any action to enforce your obligations to us hereunder. 12. Joint and Several Liability. All of the liabilities shall be joint and --------------------------- several obligations of each of the Borrowers. 13. Continuing Effect. This Agreement shall remain in full force and ----------------- effect until all Loans outstanding, together with interest thereon, and all other sums required to be paid under the terms of this Agreement have been paid in full. 14. Governing Law. This Agreement and any note or notes evidencing Loans ------------- made shall be construed in accordance with and governed by the laws of Massachusetts. 15. Bank's Assignees. The Bank may at any time or from time to time grant ---------------- to others assignments of or participations in the Loans. 16. Notices. Any notice given under this Agreement shall be effective on ------- the date when it is delivered to a party at its address set forth as follows (or at such other address as the party to which may be given may specify to the other in writing); if to you, at: Brooks Automation, Inc. 15 Elizabeth Drive Chelmsford, MA 01824 Attn: Stanley D. Piekos, CFO and if to us, at: Broad and Chestnut Streets, Philadelphia, PA 19101 Attn: R. Thomas Esser F.C. 1-8-4-2 17. Miscellaneous. Any failure by us to exercise any right under this ------------- Agreement shall not be construed as a waiver of the right to exercise the same or any other right at any other time. If more than one person, including any form of legal entity, shall sign this Agreement, as borrower, such persons shall be jointly and severally liable hereunder and the terms "you" and "your" shall be deemed to mean any and all of such persons. The parties hereto intend this Agreement to be a sealed instrument and to be legally bound hereby. -4- Acceptance Of And Agreement To Master Short Term Foreign Currency Borrowing Agreement ------------------------------------------------------ We, the addressee of the above Master Short Term Borrowing Agreement, intending to be legally bound, accept and agree to the terms and conditions of said Agreement and promise to pay the principal of and interest on all Loans made to us by CoreStates Bank, N.A. and all other sums required to be paid by us to said Bank, under and in accordance with the terms of said Master Short Term Borrowing Agreement. Signed this 25th day of June 1996. Brooks Automation, Inc. Brooks Automation Canada Corp. /s/ Stanley D. Piekos /s/ Robert J. Therrien - --------------------------------- -------------------------------------- (Borrower) (Borrower) By: Stanley D. Piekos By: Robert J. Therrien ----------------------------- ----------------------------------- VP & Chief Financial Officer President & Chief Executive Officer ----------------------------- ----------------------------------- (Name and Title) (Name and Title) Brooks Automation K.K. Brooks Automation Ltd. /s/ Stanley D. Piekos /s/ Stanley D. Piekos - --------------------------------- --------------------------------- (Borrower) (Borrower) By: Stanley D. Piekos By: Robert J. Therrien ----------------------------- ----------------------------------- VP & Chief Financial Officer President & Chief Executive Officer ----------------------------- ----------------------------------- (Name and Title) (Name and Title) -6- Brooks Automation Massachusetts Securities Corp. /s/ Stanley D. Piekos - --------------------------------------- (Borrower) By Stanley D. Piekos ------------------------------------ VP & Chief Financial Officer ------------------------------------ (Name and Title) [SEAL] -7- EX-11.01 3 COMPUTATION OF NET INCOME PER SHARE Exhibit 11.01 BROOKS AUTOMATION, INC. Computation of Net Income Per Share (in thousands, except per share amounts)
Year Ended September 30, 1997 1996 1995 Net income applicable to common shares............................................... $ 806 $8,497 $4,945 ====== ====== ====== Weighted average shares outstanding: Common stock.................................................................. 7,681 7,503 5,758 Assumed conversion of stock options and warrants........................................................ 754 696 806 Shares issuable pursuant to SAB 83 using the treasury stock method............................................. - - 239 ------ ------ ------ Total shares........................................................... 8,435 8,199 6,803 ====== ====== ====== Net income per share.......................................................... $ 0.10 $ 1.04 $ .73 ====== ====== ======
EX-13.01 4 PORTIONS OF ANNUAL REPORT Exhibit 13.01 Financial Table of Contents Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Consolidated Balance Sheet 26 Consolidated Statement of Income 27 Consolidated Statement of Changes in Stockholders' Equity 28 Consolidated Statement of Cash Flows 29 Notes to Consolidated Financial Statements 30 Report of Independent Accountants 42 Quarterly Financial Information 43
Certain statements in this annual report, including the letter to the stockholders, customers and employees, narrative text, captions and graphics, constitute "forward-looking statements" which involve known risks, uncertainties and other factors which may cause the actual results, performance or achievements of Brooks Automation, Inc. (the "Company") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the factors that may affect future results set forth in Management's Discussion and Analysis of Financial Condition and Results of Operations which is included in this report. Precautionary Statements made herein should be read as being applicable to all related forward-looking statements wherever they appear in this report. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview The Company's Massachusetts predecessor was organized in February 1989 and acquired the semiconductor wafer handling business of the Brooks Automation Division of Aeronca Electronics, Inc., a subsidiary of Fleet Aerospace Corporation, in March 1989. The Company and its predecessors have been in the semiconductor wafer handling business since 1978. Since the acquisition in 1989, the Company has invested over $40.0 million in research and development focused on developing vacuum transfer robots and other vacuum automation modules and systems. In 1992, the Company introduced the family of vacuum central wafer handling systems and modules that forms the foundation of the Company's current business. In 1994, the Company introduced a similar family of systems and modules for flat panel display substrates, including a next-generation magnetically driven vacuum transfer robot. In 1996, the Company acquired Techware Systems Corporation (now Brooks Canada), a designer and supplier of integrated equipment control software for the semiconductor and related industries, expanding its software and control capability. In 1997, the Company introduced a line of products for the atmospheric handling market, including in-line and controlled environment systems, robots, aligners and traversers. Many of the Company's customers purchase the Company's vacuum transfer robots and other modules before purchasing the Company's vacuum central wafer handling systems. In fiscal 1997, 1996 and 1995, approximately 49%, 49% and 44%, respectively, of the Company's revenues were attributable to systems sales. The Company's goal is to continue to increase systems sales as a percentage of revenues. The Company believes that once a customer has selected the Company's products for a process tool, the customer is likely to rely on those products for the life of that process tool model, which can be in excess of five years. The Company records revenue from product sales upon shipment to the customer provided that no significant Company obligations remain outstanding and collection of the related receivable is deemed probable by management. When insignificant Company obligations remain after shipment of the product, the Company accrues for the estimated costs of such obligations upon shipment. Additionally, the Company accrues for warranty costs upon shipment. Most of the Company's revenues have been generated by sales to customers in Management's Discussion and Analysis of Financial Condition and Results of Operations the United States, although the Company believes that a significant portion of these customers incorporate the Company's products into equipment sold to their foreign customers. The Company's foreign sales have occurred principally in Japan, South Korea and Europe. The Company has recently expanded its international marketing and sales efforts and its customer support capabilities in Asia and intends to increase these efforts in the future. The Company's foreign revenues are generally denominated in United States dollars. Accordingly, foreign currency fluctuations have not had a significant impact on the comparison of the results of operations for the periods presented. The costs and expenses of the Company's international subsidiaries are generally denominated in currencies other than the United States dollar. However, since the functional currency of the Company's international subsidiaries is the local currency, foreign currency translation adjustments are reflected as a component of stockholders' equity. To the extent that the Company expands its international operations or changes its pricing practices to denominate prices in foreign currencies, the Company will be exposed to increased risks of currency fluctuation. The Company's business is highly dependent upon the capital expenditures of semiconductor and flat panel display manufacturers which historically have been cyclical, and the Company's ability to develop, manufacture and sell new products and product enhancements. The Company's results will also be affected, especially when measured on a quarterly basis, by the volume, composition and timing of orders, conditions in the industries served by the Company, competition and general economic conditions. Results of Operations The following table sets forth certain financial data for the periods indicated as a percentage of revenues:
YEAR ENDED SEPTEMBER 30, 1997 1996 1995 - ---------------------------------------------------------------------------- Revenues 100.0% 100.0% 100.0% Cost of revenues 67.6 58.2 58.4 - ---------------------------------------------------------------------------- Gross profit 32.4 41.8 41.6 Operating expenses: Research and development 16.5 13.7 13.4 Selling, general and administrative 14.9 13.7 14.1 - ---------------------------------------------------------------------------- Income from operations 1.0 14.4 14.1 Interest expense 0.6 0.4 1.0 Interest income 0.1 0.4 1.0 - ----------------------------------------------------------------------------
Management's Discussion and Analysis of Financial Condition and Results of Operations
YEAR ENDED SEPTEMBER 30, 1997 1996 1995 - ---------------------------------------------------------------------------- Income before income taxes 0.5 14.4 14.1 Income tax provision (benefit) (0.4) 5.0 4.4 - ---------------------------------------------------------------------------- Net income 0.9% 9.4% 9.7% ============================================================================
Fiscal Year Ended September 30, 1997 as Compared to Fiscal Year Ended September 30, 1996 REVENUES Revenues decreased 4.4% to $86.4 million in fiscal 1997 compared with revenues of $90.4 million in fiscal 1996. Revenues from 200mm central wafer handling systems and components decreased 19.2%, or $12.6 million, in fiscal 1997. The decrease in 200mm product revenues was partially offset by increased shipments of 300mm and flat panel display products. The Company attributes lower fiscal 1997 revenues to a broad decline in capital spending by the semiconductor manufacturing equipment industry which adversely affected the Company's revenues particularly in the first half of fiscal 1997. Foreign revenues increased 77.5% to $32.5 million (37.6% of revenues), including $26.7 million of sales to Asian customers, compared with foreign revenues of $18.3 million (20.2% of revenues), including $13.3 million of sales to Asian customers in the prior fiscal year. The increase in foreign revenues is attributable to shipments of 200mm and 300mm central wafer handling systems and flat panel display systems to customers primarily in Japan and South Korea. The Company expects that foreign revenues will continue to grow in fiscal 1998 and account for a significant portion of total revenues. However, there can be no assurance that geographical growth rates, if any, in the foreseeable future, particularly in Japan and South Korea which are suffering regional economic downturns, will be comparable to those achieved in fiscal 1997. GROSS PROFIT Gross profit as a percentage of revenues decreased to 32.4% in fiscal 1997 compared with 41.8% for the prior fiscal year. The decrease in the gross profit percentage is attributable to underutilization of manufacturing capacity, higher concentration of shipments of lower gross margin platforms, increased global support costs and to a lesser extent, pricing pressure and higher new product introduction costs. Global support costs, consisting primarily of personnel costs and travel expenses, increased 100.5% to $6.5 million (7.5% of revenues) in fiscal 1997 from $3.2 million (3.6% of revenues) in the prior fiscal year. The increase in global support costs are indicative of the expansion of the Company's global support organization in support of the international growth of its customer base. In future periods, gross profit may be adversely affected by changes in the mix of products sold, continued pricing pressure or increases in the cost of goods. Management's Discussion and Analysis of Financial Condition and Results of Operations R E S E A R C H A N D D E V E L O P M E N T Research and development expenses increased 15.1% to $14.2 million (16.5% of revenues) in fiscal 1997 from $12.4 million (13.7% of revenues) in the prior fiscal year. During fiscal 1997, the Company continued to make investments in research and development to enhance existing and develop new semiconductor and flat panel display products. As a percentage of revenues, the increase in research and development expenses reflects the effect on the Company's cost structure of the lower revenue level in fiscal 1997. The Company believes that research and development expenditures are essential to maintaining its competitive position in the semiconductor and flat panel display fabrication equipment market and expects these expenditure levels to continue at or above current levels in the foreseeable future. S E L L I N G , G E N E R A L A N D A D M I N I S T R A T I V E Selling, general and administrative expenses increased 3.3% to $12.8 million (14.9% of revenues) in fiscal 1997 from $12.4 million (13.7% of revenues) in the prior fiscal year. Selling, general and administrative expenses for fiscal 1996 included merger-related expenses of $230,000 in connection with the acquisition of Brooks Canada during the second quarter. There were no such merger-related expenses incurred by the Company during fiscal 1997. As a percentage of revenues, the increase in selling, general and administrative expenses reflects the effect on the Company's cost structure of the lower revenue level in fiscal 1997. The Company expects expenditure levels to support the growth of its world wide sales and administrative organizations will continue at or above current levels in the foreseeable future, reflecting the Company's commitment to further penetrate key international markets. I N T E R E S T I N C O M E A N D E X P E N S E Interest income decreased 79.0% to $70,000 (0.1% or revenues) in fiscal 1997 from $334,000 (0.4% of revenues) in the prior fiscal year. The decrease in interest income is due to lower cash and investment balances during fiscal 1997 compared with fiscal 1996. Interest expense increased 57.2% to $610,000 (0.6% or revenues) in fiscal 1997 from $388,000 (0.4% of revenues) in the prior fiscal year. The increase in interest expense is primarily due to higher borrowings during the second and third quarters of fiscal 1997 compared with the same periods of fiscal 1996. I N C O M E T A X P R O V I S I O N ( B E N E F I T ) During fiscal 1997, the Company recorded a net tax benefit of $1,289 in the United States primarily due to the tax benefit of domestic operation loss and tax credit carrybacks. This benefit was partially offset by a net foreign tax provision of $889 resulting largely from the net taxable income of the Company's foreign subsidiaries. During fiscal 1996, the Company recorded a net Management's Discussion and Analysis of Financial Condition and Results of Operations tax provision due to its taxable income position for both domestic and foreign operations. Fiscal Year Ended September 30, 1996 as Compared to Fiscal Year Ended September 30, 1995 R E V E N U E S Revenues increased 77.5% to $90.4 million in fiscal 1996 from $51.0 million in fiscal 1995. Sales of vacuum central wafer handling systems, modules and control software comprised approximately 74% of the increase in revenues, which was primarily attributable to increased unit sales. The remainder of the increase was primarily attributable to increased unit sales of flat panel display substrate handling systems and modules, and service revenues, comprising approximately 14% and 12%, respectively, of the increase in 1996 revenues. Fiscal 1996 shipments included initial deliveries of 300mm vacuum central wafer handling systems incorporating the MagnaTran 6 high speed vacuum transport robot, the Company's sixth generation product developed to enable the production of advanced semiconductors (0.35 micron feature sizes and below). Foreign revenues increased 192.4% to $18.3 million (20.2% of revenues), including $13.3 million of sales to Asian customers in fiscal 1996, compared to foreign revenues of $6.3 million (12.3% of revenues), including $3.9 million of sales to Asian customers in fiscal 1995. G R O S S P R O F I T Gross profit as a percentage of revenues improved slightly to 41.8% in fiscal 1996 compared to 41.6% in fiscal 1995. Cost reductions attributable to manufacturing efficiencies from increased unit sales and increased sales of products incorporating higher value-added control software were partially offset by higher material costs related to changes in product mix and new product introductions, including the introduction of the Company's Marathon 300mm vacuum central wafer handling systems and modules, increased global support costs and generally competitive price pressure. Global support costs, consisting primarily of personnel costs and travel expenses, increased 117.0% to $3.2 million (3.6% or revenues) in fiscal 1996 from $1.5 million (2.9% of revenues) in the prior fiscal year. R E S E A R C H A N D D E V E L O P M E N T Research and development expenses increased 81.3% to $12.4 million (13.7% of revenues) in fiscal 1996 from $6.8 million (13.4% or revenues) in fiscal 1995. The increase in research and development expenses primarily resulted from continued enhancement of the Company's semiconductor and flat panel display products, including 300mm Marathon vacuum central wafer handling systems and modules, control and scheduling software, and factory automation Management's Discussion and Analysis of Financial Condition and Results of Operations wafer cassette delivery systems. S E L L I N G , G E N E R A L A N D A D M I N I S T R A T I V E Selling, general and administrative expenses increased 73.0% to $12.4 million (13.7% of revenues) in fiscal 1996 from $7.2 million (14.1% of revenues) in fiscal 1995. The increase in selling, general and administrative expenses resulted from the hiring of additional sales, marketing and administrative staff to manage and support the Company's international expansion in Japan, South Korea, Taiwan and Europe. Management's Discussion and Analysis of Financial Condition and Results of Operations INTEREST INCOME AND EXPENSE Interest income decreased 34.1% to $334,000 (0.4% of revenues) in fiscal 1996 from $507,000 (1.0% of revenues) in fiscal 1995. The decrease reflects lower cash balances in fiscal 1996 as a result of the Company's investments in infrastructure. Interest expense decreased 19.5% to $388,000 (0.4% of revenues) in fiscal 1996 from $482,000 (1.0% of revenues) in fiscal 1995. The decrease in interest expense was due to the Company's improved working capital position and reduced borrowings following the Company's fiscal 1995 public offerings of common stock. INCOME TAX PROVISION (BENEFIT) The Company's effective tax rate was 34.5% in fiscal 1996 compared to 31.3% in fiscal 1995. The increase in the effective rate is primarily due to the statutory lapse of federal research and development tax credits during the first nine months of 1996. Liquidity and Capital Resources As of September 30, 1997, the Company had working capital of $112.7 million, including $71.8 million of cash and cash equivalents, compared with working capital of $32.6 million, including $2.1 million of cash and cash equivalents, as of September 30, 1996. During fiscal 1997, the Company used cash of $2.0 million in operating activities primarily to finance increased accounts receivable and inventory levels. Accounts receivable and inventories increased, particularly in the third and fourth quarters, due to increased demand for products. Investing activities in fiscal 1997 consisted primarily of capital spending for CAD/CAM/CAE (computer-aided design, manufacturing and engineering) hardware and software, test and demonstration equipment and improvements in and expansion of the Company's facilities worldwide. While the Company has no significant capital commitments as of September 30, 1997, the Company anticipates that it will continue to make capital expenditures to support its business as the Company expands its product offerings and prepares for expected growth. The Company is also planning to expand the manufacturing capacity in its existing facility and anticipates capital spending in fiscal 1998 of at least $1.5 million in connection with this expansion. In September 1997, the Company received net proceeds of $80.8 million from a public stock offering of 2,298,150 shares of common stock. Other financing activities in fiscal 1997 consisted primarily of the issuance of common stock under the employee stock purchase plan, stock option exercises and repayment of short-term borrowings under credit lines. The Company has a $22.0 million unsecured revolving line of credit and a $6.0 million unsecured foreign currency line of credit, both of which expire December 31, 1998. Under the revolving credit facility, advances bear Management's Discussion and Analysis of Financial Condition and Results of Operations interest, at the option of the Company, at the prime rate or the LIBOR rate plus 2%. Foreign currency advances bear interest at the LIBOR rate plus 2%. There were no borrowings outstanding under these credit facilities at September 30, 1997. At September 30, 1997, the Company was in compliance with the terms of the credit agreements or had obtained the appropriate waivers. The Company has received notice from a third-party alleging infringements of such party's patent rights by certain of the Company's products. The Company believes the patents claimed may be invalid. In the event of litigation with respect to this claim, the Company is prepared to vigorously defend its position. Currently, the Company does not believe that it is probable that future events related to this threatened matter will have a material adverse effect on the Company's business; however, there can be no assurance that this will be the case. The Company is currently unable to reasonably estimate any possible loss related to this matter. The Company believes that anticipated cash from operations, available funds and borrowings available under the Company's bank lines of credit will be adequate to fund the Company's currently planned working capital and capital expenditure requirements through fiscal 1998. Recently Enacted Accounting Pronouncements In February 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128), which establishes standards for computing and presenting earnings per share. The new standard replaces the presentation of primary earnings per share prescribed by Accounting Principles Board Opinion No. 15, "Earnings per Share" (APB 15), with a presentation of basic earnings per share and also requires dual presentation of basic and diluted earnings per share on the face of the statement of operations for all entities with complex capital structures. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed similarly to fully diluted earnings per share pursuant to APB 15. The Company will be required to implement SFAS 128 in the first quarter of fiscal 1998 and to restate all prior periods. In June 1997, the FASB issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130) and Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" (SFAS 131). The Company will implement SFAS 130 and SFAS 131, as required in fiscal 1999, which require the Company to report and display certain information related to comprehensive income and operating segments, respectively. Adoption of SFAS 130 and SFAS 131 Management's Discussion and Analysis of Financial Condition and Results of Operations will not impact the Company's financial position or results of operations. Factors That May Affect Future Results From time to time, information provided by the Company or statements made by its employees may contain forward-looking information which involve substantial risks and uncertainties that could cause actual results to differ materially from targets or projected results. In particular, statements contained in this report and in Management's Discussion and Analysis of Financial Condition and Results of Operations which are not historical facts (including, but not limited to, statements concerning anticipated capital spending and operating expense levels and the availability of funds to meet cash requirements) may be forward-looking statements. The Company's actual future results may differ significantly from those stated in any forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the factors discussed below and the accuracy of the Company's internal estimates of revenue and operating expense levels. Fluctuations in Operating Results The Company's operating results have in the past fluctuated and may in the future continue to fluctuate significantly depending upon a variety of factors. Such factors may include: the demand for semiconductors in general; cyclicality in the market for semiconductor manufacturing equipment; the timing and size of orders from the Company's customer base; the ability of the Company to manufacture, test and deliver products in a timely and cost effective manner; the ability of the Company's competitors to obtain orders from the Company's customers; the timing of new product announcements and releases by the Company and its competitors; the mix of products sold by the Company; and competitive pricing pressures. The Company has historically derived a substantial portion of its quarterly and annual revenues from the sale of a relatively small number of semiconductor and flat panel display substrate handling systems, which have relatively high selling prices compared to its other products. As a result, the precise timing of the recognition of revenue from an order for one or a small number of systems can have a significant impact on the Company's total revenues and operating results for a particular period. The Company's operating results for a particular period could be adversely affected if orders for a small number of systems are canceled or rescheduled by customers or cannot be filled in time to recognize revenue during that period due to, for example, unanticipated manufacturing, testing, shipping or product acceptance delays. The Company's expense levels are based, in large part, on the Company's expectations as to future revenues and are, therefore, relatively Management's Discussion and Analysis of Financial Condition and Results of Operations fixed in the short term. If revenue levels fall below expectations, net income will be disproportionately and adversely affected. The impact of these and other factors on the Company's revenues and operating results in any future period cannot be forecast with any degree of certainty. These factors could have a material adverse effect on the Company's business, financial condition, revenues and results of operations. Dependence on Semiconductor Industry The Company's business is significantly dependent on capital expenditures by manufacturers of semiconductors. The semiconductor industry is highly cyclical and has experienced periods of oversupply, resulting in significantly reduced demand for capital equipment, including the products manufactured and marketed by the Company. The Company's future financial condition, revenues and results of operations may be materially and adversely affected by semiconductor industry downturns or slowdowns. The Company believes that downturns in the semiconductor manufacturing industry will occur in the future, and will result in decreased demand for semiconductor manufacturing equipment. In addition, the Company believes that its ability to reduce expenses in a future downturn will be constrained by the need for continual investment in research and development, and the need to maintain extensive ongoing customer service and support capability. Accordingly, any downturn in the semiconductor industry could have a material adverse effect on the Company's business, financial condition and results of operations. Customer Concentration Relatively few customers account for a substantial portion of the Company's revenues. Sales to the Company's ten largest customers in fiscal 1997, 1996 and 1995 accounted for 71%, 69% and 75% of revenues, respectively. In fiscal 1997, 1996 and 1995, sales to Lam Research Corporation ("Lam"), the Company's largest customer in these periods, accounted for 21% of the Company's revenues in each fiscal year. The Company expects that sales to Lam will continue to represent a significant portion of the Company's revenues for the foreseeable future. The Company's customers, including Lam, generally do not enter into long-term agreements obligating them to purchase the Company's products. A reduction or delay in orders from Lam or other significant customers, including reductions or delays due to market, economic or competitive conditions in the semiconductor or flat panel display industries, could have a material adverse effect on the Company's business, financial condition and results of operations. Reliance on OEM Customers; Lengthy Sales Cycle The Company's products are principally sold to OEMs which incorporate the Company's products into their equipment. Due to the significant capital commitments usually incurred by semiconductor and flat panel display manufacturers in their purchases of these OEMs' equipment, these manufacturers demand highly reliable products which may require several years for OEMs to develop. The Company's revenues are therefore primarily dependent upon the timing and effectiveness of the efforts of its OEM customers in developing and marketing equipment incorporating the Company's products. The Company's new products are generally incorporated into an OEM customer's process tools at the design stage. However, customer decisions to use the Company's products, which can often require significant expenditures by the Company without any assurance of success, often precede the generation of volume sales, if any, by a year or more. There can be no assurance that the Company will continue to achieve design-in wins, that the process tools manufactured by the Company's customers will be introduced in a timely manner or that such systems will achieve market acceptance. The Company's or its customers' failure to develop and introduce new products successfully and in a timely manner could materially and adversely affect the Company's business, financial condition and results of operations. New Products and Rapid Technological Change The semiconductor and flat panel display manufacturing industries have been characterized by rapid technological change and evolving industry requirements and standards. The Company believes that these trends will continue. The Company's success will depend upon its ability to enhance its existing products and to develop and market new products to meet customer requirements. Successful product development and introduction depends on a number of factors, including accurate new product definition, timely completion and introduction of new product designs and market acceptance of the Company's products and its customers' products. Currently, the Company's major development programs include expanding its product offerings of semiconductor and flat panel display substrate handling systems to address emerging industry requirements for 300mm wafer and fourth generation flat panel substrates, as well as wafer handling systems and modules for atmospheric process tools. In addition, the Company continues to develop and enhance its process control software product offerings. There can be no assurance that the Company will adjust to changing market conditions or be successful in introducing products or product enhancements on a timely basis, if at all, or that the Company will be able to market successfully these products and product enhancements once developed. Further, there can be no assurance that the Company's products will not be rendered obsolete by new industry standards or changing technology. Risks of International Sales and Operations In fiscal 1997, 1996 and 1995, the Company derived approximately 38%, 20% and Management's Discussion and Analysis of Financial Condition and Results of Operations 12% of its revenues from customers located outside the United States. The Company anticipates that international revenues will continue to account for a significant portion of its revenues. However, there can be no assurance that geographical growth rates, if any, in the foreseeable future, particularly in Japan and South Korea which are suffering regional economic downturns, will be comparable to those achieved in fiscal 1997. To support its international customers, the Company maintains subsidiaries in Japan, Europe, South Korea and Taiwan and is expanding its field service and support operations in Europe and Southeast Asia. There can be no assurance that the Company will be able to manage these operations effectively or that the Company's investment in these activities will enable it to compete successfully in international markets or to meet the service and support needs of its customers. Additionally, a significant portion of the Company's revenues and operations could be subject to certain risks, including tariffs, foreign government standards and regulations and other barriers, difficulties in staffing and managing foreign subsidiary and branch operations, currency exchange risks and exchange controls, adverse tax consequences and difficulty in accounts receivable collection. International trade regulations, such as United States export controls, could change in the future and make it more difficult for the Company to export its products to various countries. There can be no assurance that any of these factors will not have a material adverse effect on the Company's business, financial condition and results of operations. Intellectual Property Rights There has been substantial litigation regarding patent and other intellectual property rights in the semiconductor and related industries. The Company has received notice from a third-party alleging infringements of such party's patent rights by certain of the Company's products. The Company's patent counsel continues to investigate the claims made against the Company. With regard to the notice, the Company believes that the patents claimed may be invalid. In the event of litigation with respect to this notice, the Company is prepared to defend vigorously its position. However, because patent litigation can be extremely expensive and time consuming, the Company may seek to obtain a license to one or more of the disputed patents. There can be no assurance that the Company would prevail in any litigation seeking damages or expenses from the Company or to enjoin the Company from selling its products on the basis of the alleged patent infringement, or that a license for any of the alleged infringed patents will be available to the Company on reasonable terms, if at all. Management of Growth The Company's strategy is to grow by providing hardware and software solutions to enhance semiconductor and flat panel display substrate handling systems of advanced production tools used to produce semiconductors and flat panel displays. Due to the level of technical and marketing expertise necessary to support its existing and new customers, the Company must attract highly qualified and well-trained domestic and international personnel. There is a limited number of persons with the requisite skills to serve in these positions and it may become inceasingly difficult for the Company to hire such personnel. The Company will also be required to manage its expanding international operations, to effect timely deliveries of its products and to maintain the product quality and reliability required by its customers. The Company's expansion may also significantly strain the Company's management, manufacturing, financial and other resources. There can be no assurance that the Company's systems, procedures, controls and existing space will be adequate to support the Company's operations. Failure to properly manage the Company's growth, if any, could have a material adverse effect on the Company's business, financial condition and results of operations. Highly Competitive Industry The markets for the Company's products are highly competitive and subject to rapid technological change. The Company believes that its primary competition is from integrated OEMs that satisfy their semiconductor and flat panel display handling needs in-house rather than by purchasing systems or modules from an independent supplier such as the Company. Many of these other potential competitors have substantially greater resources than the Company. There can be no assurance that the Company will be successful in selling its products to OEMs that currently satisfy their substrate handling needs in-house, regardless of the performance or the price of the Company's products. Moreover, there can be no assurance that integrated OEMs will not begin to commercialize their handling capabilities. Competitors may develop superior products or products of similar quality at the same or lower prices. Other technical innovations may impair the Company's ability to market its products. There can be no assurance that the Company will be able to compete successfully. Risks Associated with Possible Acquisitions The Company may pursue potential acquisitions of businesses, products and technologies that could complement or expand the Company's business. The Company currently has no plans, commitments or agreements with respect to any material acquisitions and there can be no assurance that the Company will be able to identify any appropriate acquisition candidates. If the Company identifies an acquisition candidate, there can be no assurance that the Company will be able to successfully negotiate the terms of any such acquisition, finance such acquisition or integrate such acquired businesses, products or technologies into the Company's existing business and products. The negotiation of potential acquisitions as well as the integration of an acquired business could cause diversion of management's time and resources. Future acquisitions by the Company Management's Discussion and Analysis of Financial Condition and Results of Operations could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and amortization expenses. If any such acquisition were to occur, there can be no assurance that, whether or not consummated, any such acquisition would not have a material adverse effect on the Company's business, financial condition and results of operations. Volatility of Stock Price The Company believes that a variety of factors could cause the price of the Company's common stock to fluctuate, perhaps substantially, including: announcements of developments related to the Company's business; quarterly fluctuations in the Company's actual or anticipated operating results and order levels; general conditions in the semiconductor and flat panel display industries or the worldwide economy; announcements of technological innovations; new products or product enhancements by the Company or its competitors; developments in patents or other intellectual property rights and litigation; and developments in the Company's relationships with its customers and suppliers. In addition, in recent years the stock market in general and the market for shares of small capitalization and semiconductor industry-related companies in particular, have experienced extreme price fluctuations which have often been unrelated to the operating performance of affected companies. Any such fluctuations in the future could adversely affect the market price of the Company's common stock. There can be no assurance that the market price of the common stock of the Company will not decline. Consolidated Balance Sheet
(IN THOUSANDS, EXCEPT SHARE-RELATED DATA) SEPTEMBER 30, 1997 1996 - --------------------------------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 71,753 $ 2,102 Accounts receivable, net of allowance for doubtful accounts of $160 and $100, respectively, and including related party receivables of $5,204 and $5,533, respectively 28,408 24,381 Inventories 23,253 17,803 Prepaid expenses and other current assets 1,980 1,026 Deferred income taxes 1,710 653 - --------------------------------------------------------------------------------------------- Total current assets 127,104 45,965 Fixed assets, net 19,054 16,698 Other assets 3,572 2,098 - --------------------------------------------------------------------------------------------- Total assets $ 149,730 $ 64,761 ============================================================================================= Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 399 $ 1,431 Accounts payable 9,125 8,103 Accrued compensation and benefits 2,719 2,719 Accrued expenses and other current liabilities 2,193 1,130 - --------------------------------------------------------------------------------------------- Total current liabilities 14,436 13,383 Long-term debt and capital lease obligations 190 589 Deferred income taxes 905 98 - --------------------------------------------------------------------------------------------- Total liabilities 15,531 14,070 - --------------------------------------------------------------------------------------------- Commitments and contingency (Note 12) -- -- Stockholders' equity: Preferred stock, $.01 par value; 1,000,000 shares authorized; none issued and outstanding -- -- Common stock, $.01 par value; 21,500,000 shares authorized; 10,052,663 and 7,569,109 shares issued and outstanding, respectively 101 76 Additional paid-in capital 117,139 34,335 Cumulative translation adjustment 5 (174) Deferred compensation (416) (110) Retained earnings 17,370 16,564 - --------------------------------------------------------------------------------------------- Total stockholders' equity 134,199 50,691 - --------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 149,730 $ 64,761 =============================================================================================
The accompanying notes are an integral part of these consolidated financial statements. Consolidated Statement of Income
(IN THOUSANDS, EXCEPT PER SHARE DATA) YEAR ENDED SEPTEMBER 30, 1997 1996 1995 - --------------------------------------------------------------------------------------------------- FISCAL 1997 FISCAL 1996 FISCAL 1995 - --------------------------------------------------------------------------------------------------- Revenues, including related party revenues of $18,176, $19,109 and $10,530, respectively $ 86,409 $ 90,432 $ 50,958 Cost of revenues 58,395 52,610 29,783 - --------------------------------------------------------------------------------------------------- Gross profit 28,014 37,822 21,175 - --------------------------------------------------------------------------------------------------- Operating expenses: Research and development 14,222 12,359 6,818 Selling, general and administrative 12,846 12,436 7,188 - --------------------------------------------------------------------------------------------------- Total operating expenses 27,068 24,795 14,006 - --------------------------------------------------------------------------------------------------- Income from operations 946 13,027 7,169 Interest expense 610 388 482 Interest income 70 334 507 - --------------------------------------------------------------------------------------------------- Income before income taxes 406 12,973 7,194 Income tax provision (benefit) (400) 4,476 2,249 - --------------------------------------------------------------------------------------------------- Net income $ 806 $ 8,497 $ 4,945 =================================================================================================== Net income per share $ 0.10 $ 1.04 $ 0.73 =================================================================================================== Weighted average number of common and common equivalent shares 8,435 8,199 6,803 ===================================================================================================
The accompanying notes are an integral part of these consolidated financial statements. Consolidated Statement of Changes in Stockholders' Equity
COMMON ADDITIONAL CUMULATIVE TOTAL STOCK AT PAID-IN TRANSLATION DEFERRED RETAINED STOCKHOLDERS' (IN THOUSANDS) PAR VALUE CAPITAL ADJUSTMENT COMPENSATION EARNINGS EQUITY - --------------------------------------------------------------------------------------------------------- Balance at September 30, 1994 $ 40 $ 2,360 $ (171) $ - $ 3,360 $ 5,589 Issuance of common stock- public offerings 30 30,216 30,246 Exercise of common stock warrants 5 1,240 1,245 Exercise of common stock options 57 57 Purchase and retire treasury stock (119) 80 (39) Currency translation adjustments 35 35 Deferred compensation 264 (264) - Amortization of deferred compensation 45 45 Payment of stockholders' notes receivable 60 60 Dividends (91) (91) Income tax benefit related to stock options 130 130 Net income 4,945 4,945 - --------------------------------------------------------------------------------------------------------- Balance at September 30, 1995 75 34,208 (136) (139) 8,214 42,222 Issuance of common stock under employee stock purchase plan 210 210 Exercise of common stock options 1 101 102 Purchase and retire treasury stock (184) (184) Currency translation adjustments (38) (38) Amortization of deferred compensation 29 29 Elimination of Techware net income for the three-months ended December 31, 1995 (147) (147) Net income 8,497 8,497 - --------------------------------------------------------------------------------------------------------- Balance at September 30, 1996 76 34,335 (174) (110) 16,564 50,691 Issuance of common stock- public offering 23 80,739 80,762 Issuance of common stock under employee stock purchase plan 1 531 532 Exercise of common stock options 1 240 241 Currency translation adjustments 179 179 Deferred compensation 368 (368) - Amortization of deferred compensation 62 62 Income tax benefit related to stock options 926 926 Net income 806 806 - --------------------------------------------------------------------------------------------------------- Balance at September 30, 1997 $101 $117,139 $ 5 $(416) $17,370 $134,199
The accompanying notes are an integral part of these consolidated financial statements. Consolidated Statement of Cash Flows
(IN THOUSANDS) YEAR ENDED SEPTEMBER 30, 1997 1996 1995 - ------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FISCAL 1997 FISCAL 1996 FISCAL 1995 - ------------------------------------------------------------------------------------------------------- Cash flows from operating activities Net income $ 806 $ 8,497 $ 4,945 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 4,808 3,028 1,270 Loss on disposal of fixed assets 7 122 50 Compensation expense related to common stock options 62 29 45 Deferred income taxes (249) (443) 115 Changes in operating assets and liabilities: Accounts receivable (3,948) (11,742) (8,340) Inventories (5,555) (5,005) (8,413) Prepaid expenses and other current assets 165 511 (715) Accounts payable 1,046 2,127 4,195 Accrued compensation and benefits (15) 1,019 717 Accrued expenses and other current liabilities 882 (291) (855) - ------------------------------------------------------------------------------------------------------- Net cash used in operating activities (1,991) (2,148) (6,986) - ------------------------------------------------------------------------------------------------------- Cash flows from investing activities Purchases of fixed assets (6,363) (9,689) (7,673) Increase in other assets (2,069) (1,267) (511) Proceeds from sales of short-term investments, net -- -- 492 - ------------------------------------------------------------------------------------------------------- Net cash used in investing activities (8,432) (10,956) (7,692) - ------------------------------------------------------------------------------------------------------- Cash flows from financing activities Net (repayments of) borrowings under line of credit (1,019) 123 236 Principal payments on long-term debt and capital lease obligations (412) (462) (2,293) Proceeds from issuance of common stock, net of issuance costs 81,535 312 31,608 Dividends paid -- (91) -- Purchase and retire treasury stock -- (253) (39) - ------------------------------------------------------------------------------------------------------- Net cash provided by (used in) financing activities 80,104 (371) 29,512 - ------------------------------------------------------------------------------------------------------- Effects of exchange rate changes on cash and cash equivalents (30) (17) 35 Net increase (decrease) in cash and cash equivalents 69,651 (13,492) 14,869 Cash and cash equivalents, beginning of year 2,102 15,594 725 Cash and cash equivalents, end of year $ 71,753 $ 2,102 $ 15,594 Supplemental disclosure of cash flow information Cash paid during the year for interest $ 615 $ 419 $ 371 Cash paid during the year for income taxes $ 1,486 $ 4,076 $ 2,786 - -------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial statements. Notes to Consolidated Financial Statements 1. Nature of Business and Summary of Significant Accounting Policies N A T U R E O F B U S I N E S S Brooks Automation, Inc. (the "Company") is an independent supplier of substrate handling robots, modules, software controls and fully-integrated cluster tool platforms to semiconductor, flat panel display and data storage manufacturers worldwide. A summary of the Company's significant accounting policies follows: P R I N C I P L E S O F C O N S O L I D A T I O N A N D B A S I S O F P R E S E N T A T I O N The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The consolidated financial information contained herein includes the accounts of Techware Systems Corporation ("Techware") for all periods presented (Note 2). U S E O F E S T I M A T E S The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. R E V E N U E R E C O G N I T I O N Revenue from product sales is recorded upon shipment to the customer provided that no significant obligations remain and collection of the related receivable is probable. When insignificant obligations remain after shipment of the product, the Company accrues the estimated costs of such obligations upon shipment. A provision for product warranty costs is recorded at the time of sale. C A S H A N D C A S H E Q U I V A L E N T S The Company invests its excess cash in repurchase agreements with major banks and U.S. government securities that are subject to minimal credit and market risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. At September 30, 1997, cash and cash equivalents include $40,031,000 and $31,171,000 of securities which are classified as available-for-sale and held to maturity, respectively, and for which cost approximates fair value. At September 30, 1996, cash and cash equivalents include $1,758,000 of securities which are classified as held to maturity and for which cost approximates fair value. Notes to Consolidated Financial Statements I N V E N T O R I E S Inventories are stated at the lower of cost or market, cost being determined using the first-in, first-out method. The Company provides inventory reserves for excess, obsolete or damaged inventory based on changes in customer demand, technology and other economic factors. While the Company often uses sole source suppliers for certain key components and common assemblies to achieve quality control and the benefits of economies of scale, the Company believes that these parts and materials are readily available from several supply sources. F I X E D A S S E T S Fixed assets are recorded at cost and depreciated over their estimated useful lives using the straight-line method. Equipment held under capital leases is recorded at the lower of the fair market value of the equipment or the present value of the minimum lease payments at the inception of the leases. Leasehold improvements and equipment held under capital leases are amortized over the shorter of their estimated useful lives or the term of the respective leases. Repair and maintenance costs are expensed as incurred. P A T E N T S The Company capitalizes the direct costs associated with obtaining patents. Capitalized patent costs are amortized using the straight-line method over the shorter of seven years or the estimated economic life of the patents. R E S E A R C H A N D D E V E L O P M E N T A N D S O F T W A R E D E V E L O P M E N T C O S T S Costs incurred in the research and development of the Company's products are expensed as incurred, except for certain software development costs. Software development costs are expensed prior to establishing technological feasibility and capitalized thereafter until the related product is available for general release to customers. Capitalized software development costs are amortized to cost of sales on a product-by-product basis over the estimated lives of the related products. S T O C K - B A S E D C O M P E N S A T I O N The Company's stock compensation plans are accounted for in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees". Under this method, compensation expense on stock option grants to employees is recognized only to the extent that the exercise price on the date of grant is less than the current fair value of the Company's common stock. In October 1996, the Company adopted the disclosure provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS123), for stock-based awards to employees (Note 8). Notes to Consolidated Financial Statements All stock based awards to non-employees are accounted for in accordance with SFAS123. I N C O M E T A X E S The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Under this method, deferred income tax assets and liabilities are recognized for the expected future tax consequences, utilizing current tax rates, of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. Deferred income tax expense represents the change in the net deferred tax asset and liability balances. F O R E I G N C U R R E N C Y The functional currency of the Company's international subsidiaries is the local currency. Accordingly, foreign currency financial statements of the Company's international subsidiaries are translated into U.S. dollars using exchange rates in effect at period end for assets and liabilities and at average rates during the period for results of operations. The resulting foreign currency translation adjustments are reflected as a separate component of consolidated stockholders' equity. N E T I N C O M E P E R S H A R E Net income per share is determined based on the weighted average number of common shares and common equivalent shares, if dilutive, assumed outstanding during the applicable period. Pursuant to Securities and Exchange Commission Staff Accounting Bulletin No. 83, certain common and common equivalent shares issued by the Company during the twelve month period prior to the initial filing of the registration statement relating to the Company's initial public offering have been included in the calculation of weighted average shares, using the treasury stock method and an estimated initial public offering price of $9.00 per share, as if these shares were outstanding for all periods prior to the initial public offering. R E C E N T L Y E N A C T E D A C C O U N T I N G P R O N O U N C E M E N T S In February 1997, the FASB issued Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS128), which establishes standards for computing and presenting earnings per share. The new standard replaces the presentation of primary earnings per share prescribed in Accounting Principles Board Opinion No. 15, "Earnings per Share" (APB15) with a presentation of basic earnings per share and also requires dual presentation of basic and diluted earnings per share on the face of the statement of operations for all entities with complex capital structures. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed similarly to fully diluted earnings per share pursuant to APB15. The Company will be required to implement SFAS128 in the first quarter of fiscal 1998 and to restate all prior periods. If the Company had been required to implement the guidance in SFAS128 during the year ended September 30, 1997, the following earnings per share amounts Notes to Consolidated Financial Statements would have been reported.
YEAR ENDED SEPTEMBER 30, 1997 1996 1995 - ------------------------------------------------------------------------------------------- Net income per common share: Basic $ 0.10 $ 1.13 $ 0.82 =========================================================================================== Diluted $ 0.09 $ 1.04 $ 0.73 =========================================================================================== Weighted average number of common shares 7,681 7,503 5,997 =========================================================================================== Weighted average number of common and dilutive potential common shares 8,634 8,199 6,803 ===========================================================================================
In June 1997, the FASB issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS130) and Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" (SFAS131). The Company will implement SFAS130 and SFAS131, as required in fiscal 1999, which require the Company to report and display certain information related to comprehensive income and operating segments, respectively. Adoption of SFAS130 and SFAS131 is not expected to impact the Company's financial position or results of operations. Notes to Consolidated Financial Statements 2. Acquisition In fiscal 1996, the Company issued 462,189 shares of common stock in exchange for all the outstanding shares of Techware pursuant to a Combination Agreement dated as of February 28, 1996. The Techware acquisition was accounted for as a pooling of interests. In connection with the Techware acquisition, the Company incurred expenses of $230,000, consisting primarily of transaction costs to effect the acquisition, in the quarter ended March 31, 1996. Due to the previously differing year-ends of the Company and Techware, Techware's results of operations for the year ended December 31, 1995 have been combined with the Company's results of operations for the year ended September 30, 1995. The results of operations for fiscal 1996 are for the twelve-months ended September 30, 1996 for both the Company and Techware. Techware's unaudited results of operations for the three months ended December 31, 1995 (including revenues and net income of $1,810,000 and $147,000, respectively) are included in the consolidated statements of income for both the year ended September 30, 1996 and 1995. Therefore, an amount equal to Techware's net income for the three months ended December 31, 1995 was eliminated from consolidated retained earnings for the year ended September 30, 1996. 3. Inventories Inventories consist of the following:
(IN THOUSANDS) SEPTEMBER 30, 1997 1996 - ----------------------------------------------------------------------------- Raw materials and purchased parts $14,750 $12,547 Work-in-process 7,745 2,899 Finished goods 758 2,357 - ----------------------------------------------------------------------------- $23,253 $17,803 =============================================================================
4. Fixed Assets Fixed assets consist of the following:
(IN THOUSANDS) ESTIMATED USEFUL SEPTEMBER 30, LIFE IN YEARS 1997 1996 - -------------------------------------------------------------------------------------- Computer equipment and software 3-5 $ 8,224 $ 5,595 Computer equipment and software life of under capital leases lease 626 626 Machinery and equipment 5-7 10,764 7,861 Machinery and equipment life of under capital leases lease 753 753
Notes to Consolidated Financial Statements Furniture and fixtures 3-10 3,496 3,077 Leasehold improvements 7 4,769 4,133 - ------------------------------------------------------------------------------- 28,632 22,045 Less-Accumulated depreciation and amortization 9,578 5,347 - ------------------------------------------------------------------------------- $19,054 $16,698 ===============================================================================
Accumulated amortization on fixed assets under capital leases was $902,000 and $626,000 at September 30, 1997 and 1996, respectively. Amortization expense for fixed assets under capital leases was $276,000, $243,000 and $124,000 for the years ended September 30, 1997, 1996 and 1995, respectively. 5. Long-term Debt and Capital Lease Obligations Long-term debt consists of the following:
(IN THOUSANDS) SEPTEMBER 30, 1997 1996 - ------------------------------------------------------------------------------------------------- Outstanding borrowings under bank line of credit agreements $ - $1,019 Subordinated note payable, principal payments in monthly installments of $5, interest payable monthly at prime plus 2.75% per annum (11.25% and 11.0% at September 30, 1997 and 1996) 182 246 Capital lease obligations at rates of 5% to 21% per annum, secured by certain fixed assets; expiring at various dates through January 1999 407 755 - ------------------------------------------------------------------------------------------------- 589 2,020 Less-Current portion 399 1,431 - ------------------------------------------------------------------------------------------------- $ 190 $ 589 =================================================================================================
The aggregate maturities of long-term debt and capital lease obligations are as follows as of September 30, 1997:
(IN THOUSANDS) FISCAL - ------------------------------------------------------------------------------------------------- 1998 $399 1999 122 2000 68 - ------------------------------------------------------------------------------------------------- $589 =================================================================================================
The Company has a $22.0 million unsecured revolving line of credit and a $6.0 Notes to Consolidated Financial Statements million unsecured foreign currency line of credit, both of which expire December 31, 1998. Under the revolving credit facility, advances bear interest, at the option of the Company, at the prime rate or the LIBOR rate plus 2%. Foreign currency advances bear interest at the LIBOR rate plus 2%. There were no borrowings outstanding under these credit facilities at September 30, 1997. At September 30, 1996, the Company had $1,019,000 outstanding ($725,000 denominated in Japanese yen and $294,000 denominated in Canadian dollars) under the foreign currency line of credit. The terms of the Loan Agreement require the Company to comply with various covenants, including the maintenance of specified financial ratios and a minimum tangible capital base, as defined, and limits annual levels of capital expenditures. Additionally, the Company has a $450,000 term note agreement with a third party due in June 2000. The note is secured by substantially all of the Company's assets and is personally guaranteed by the president of the Company. The note agreement contains various restrictive covenants. At September 30, 1997, the Company was in compliance with the terms of these credit agreements or had obtained the appropriate waivers. 6. Income Taxes The components of the income tax provision (benefit) are as follows:
(IN THOUSANDS) YEAR ENDED SEPTEMBER 30, 1997 1996 1995 - -------------------------------------------------------------------------------- Current: Federal ($987) $ 3,695 $ 1,719 State 8 625 241 Foreign 829 600 174 - -------------------------------------------------------------------------------- (150) 4,920 2,134 ================================================================================ Deferred: Federal ($204) (42) 67 State (106) (402) 48 Foreign 60 -- -- - -------------------------------------------------------------------------------- (250) (444) 115 - -------------------------------------------------------------------------------- ($400) $ 4,476 $ 2,249 ================================================================================
The components of income (loss) before income taxes are as follows:
(IN THOUSANDS) YEAR ENDED SEPTEMBER 30, 1997 1996 1995 - -------------------------------------------------------------------------------- Domestic ($1,136) $11,580 $6,651 Foreign 1,542 1,393 543 - -------------------------------------------------------------------------------- $ 406 $12,973 $7,194 ================================================================================
Notes to Consolidated Financial Statements The significant components of the net deferred tax asset are as follows:
(IN THOUSANDS) SEPTEMBER 30, 1997 1996 1995 - ---------------------------------------------------------------------------------- Deferred tax assets: Reserves not currently deductible $ 1,531 $ 819 $ 382 Foreign and state tax credit carryforwards 516 411 -- Other -- 61 12 - ---------------------------------------------------------------------------------- Gross deferred tax assets 2,047 1,291 394 - ---------------------------------------------------------------------------------- Deferred tax liabilities: Depreciation and amortization (1,059) (676) (266) Other (183) (60) (16) - ---------------------------------------------------------------------------------- Gross deferred tax liabilities (1,242) (736) (282) - ---------------------------------------------------------------------------------- $ 805 $ 555 $ 112 ==================================================================================
The differences between the income tax provision (benefit) and income taxes computed using the applicable U.S. statutory federal tax rate are as follows:
(IN THOUSANDS) YEAR ENDED SEPTEMBER 30, 1997 1996 1995 - -------------------------------------------------------------------------------- Taxes computed at federal statutory rate $ 142 $ 4,540 $ 2,518 State income taxes, net of federal benefit (98) 420 207 Research and development tax credits (591) (587) (255) Foreign sales corporation tax benefit (381) (325) (85) Foreign income taxed at different rates 407 161 (20) Non-deductible transaction expenses -- 110 -- Other 121 157 (116) - -------------------------------------------------------------------------------- ($400) $ 4,476 $ 2,249 ================================================================================
The Company does not provide for U.S. income taxes applicable to undistributed earnings of its foreign subsidiaries since these earnings are indefinitely reinvested. 7. Stockholders' Equity In February 1995, the Company issued 2,000,000 shares of common stock Notes to Consolidated Financial Statements in an initial public offering and received proceeds, net of offering costs, of $13.6 million. In July 1995 and September 1997, the Company completed public stock offerings of 1,000,000 shares and 2,298,150 shares of common stock, respectively, and received proceeds, net of offering costs, of $16.6 million and $80.8 million, respectively. 8. Stock Plans 1995 EMPLOYEE STOCK PURCHASE PLAN On February 22, 1996, the stockholders approved the 1995 Employee Stock Purchase Plan (the "1995 Plan") which enables eligible employees to purchase shares of the Company's common stock. Under the 1995 Plan, eligible employees may purchase up to an aggregate of 150,000 shares during six-month offering periods commencing on January 1 and July 1 of each year at a price per share of 85% of the lower of the market price per share on the first or last day of each six-month offering period. Participating employees may elect to have up to 10% of base pay withheld and applied toward the purchase of such shares. The rights of participating employees under the 1995 Plan terminate upon voluntary withdrawal from the plan at any time or upon termination of employment. As of September 30, 1997, the Company has reserved 82,744 shares of common stock for issuance under the 1995 Plan. 1992 COMBINATION STOCK OPTION PLAN The 1992 Combination Stock Option Plan (the "1992 Plan") allows for the grant of non-qualified and incentive stock options for the purchase of up to 1,550,000 shares of the Company's common stock by employees, directors or consultants who provide services to the Company. The Board of Directors of the Company is responsible for administration of the 1992 Plan. Stock options granted under the plan have generally been granted at exercise prices of not less than the fair value per common share on the date of the grant. Non-qualified and incentive stock options are exercisable at various dates as determined by the Board of Directors. Incentive stock options are generally exercisable either within 10 years of the date of grant or within 5 years of the date of grant for employees holding greater than 10% of the Company's voting stock. 1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN The 1993 Non-Employee Director Stock Option Plan (the "Director Plan") allows for the issuance of stock options to directors who provide services to the Company. In fiscal 1997, the Company's stockholders approved an increase in the number of shares issuable under the Director Plan from 90,000 to 190,000 shares. The price of the stock options is determined by the Board of Directors and are priced at not less than the fair market value on the date of Notes to Consolidated Financial Statements grant. Options vest over a five year period. On July 25, 1996, the Board of Directors determined that certain stock options issued to employees of the Company had an exercise price significantly higher than the fair market value of the Company's common stock. In light of the Board's conclusions that such options were not providing the desired incentive, the Board provided employees with the opportunity to exchange options previously granted to them under the 1992 Plan for new options (the "replacement options") to purchase the same number of shares of common stock at an exercise price of $11.00 per share, the then fair market value of the Company's common stock. Employees were given the choice of retaining their existing options, with the original vesting schedule, or accepting the replacement options, with a vesting schedule commencing on July 25, 1996. The Company canceled and replaced options to purchase 344,600 shares of common stock with an average exercise price of $14.36 per share. Stock option activity under all plans is summarized as follows:
WEIGHTED- AVERAGE NUMBER OF EXERCISE SHARES PRICE - ----------------------------------------------------------------------------- Outstanding, September 30, 1994 942,300 $ 1.83 Granted 128,500 12.52 Canceled (9,000) 1.54 Exercised (49,700) 1.12 - ----------------------------------------------------------------------------- Outstanding, September 30, 1995 1,012,100 3.18 Granted 717,500 12.14 Canceled (405,375) 13.41 Exercised (101,575) 0.99 - ----------------------------------------------------------------------------- Outstanding, September 30, 1996 1,222,650 5.47 Granted 133,300 16.08 Canceled (34,075) 7.55 Exercised (141,791) 1.70 - ----------------------------------------------------------------------------- Outstanding, September 30, 1997 1,180,084 $ 7.02 =============================================================================
Notes to Consolidated Financial Statements The weighted average fair value per share of options granted with exercise prices at fair market value during the years ended September 30, 1997 and 1996 was $12.51 and $8.69, respectively. The weighted average exercise price per share of options granted with exercise prices at fair market value during the year ended September 30, 1997 was $17.37. The weighted average fair value and weighted average exercise price per share of options granted at below fair market value during the year ended September 30, 1997 was $17.68 and $12.75, respectively. The following table summarizes information about stock options outstanding at September 30, 1997:
WEIGHTED- AVERAGE REMAINING WEIGHTED- WEIGHTED- CONTRACTUAL AVERAGE AVERAGE EXERCISE NUMBER LIFE EXERCISE NUMBER EXERCISE PRICE OUTSTANDING (IN YEARS) PRICE EXERCISABLE PRICE - ------------------------------------------------------------------------------------ $0.83-$1.67 113,559 5.9 $ 1.35 47,434 $ 1.25 $2.21-$2.43 505,875 4.7 $ 2.31 248,625 $ 2.33 $8.00-$10.25 18,650 8.1 $ 8.77 1,500 $ 8.00 $11.00 387,600 8.8 $ 11.00 - - $11.50-$14.75 99,400 9.4 $ 12.89 2,600 $ 12.08 $15.62-$21.50 44,000 9.1 $ 19.99 3,000 $ 19.00 $29.50-$38.38 11,000 9.9 $ 34.08 - - --------- ------- 1,180,084 6.8 $ 7.02 303,159 $ 2.44 ========= =======
At September 30, 1996 and 1995, there were 217,150 and 144,225 options exercisable, respectively, with weighted average exercise prices of $1.97 and $1.35, respectively. Notes to Consolidated Financial Statements The fair value of each option grant is estimated on the date of grant with the following assumptions used for grants made during fiscal years 1997 and 1996: no dividend yield, risk-free interest rates of 6.2% to 6.3%, expected option term of 4 years, expected forfeiture rate of 2.5% and a volatility factor of 100%. Had compensation expense for the Company's option grants to employees been determined based on the fair value at the date of grant and for shares of common stock purchased pursuant to the Employee Stock Purchase Plan, consistent with the methods prescribed by SFAS123, the pro forma effect on the Company's net income for the years ended September 30, 1997 and 1996 would have been as follows:
Y E A R E N D E D S E P T E M B E R 30, 1997 1996 - ---------------------------------------------------------------------------- Net income As reported $806,000 $8,497,000 Pro forma $ 60,000 $8,021,000 Net income per share As reported $0.10 $1.04 Pro forma $0.01 $1.02
Because most options vest over several years and additional option grants are expected to be made subsequent to September 30, 1997, the results of applying the fair value method may have a materially different effect on pro forma net income in future years. R E S T R I C T E D S T O C K P U R C H A S E P L A N Prior to its initial public offering, the Company had an informal stock purchase plan whereby selected key employees and consultants were granted the opportunity to purchase common stock. The shares of common stock sold pursuant to this plan are generally subject to purchase by the Company at the original purchase price plus a specified interest rate, if the individual ceases to be employed or associated with the Company after various specified periods of time. In connection with this plan, the Company issued a total of 423,195 shares of common stock to employees and consultants at per share prices ranging from $.83 to $2.21. During fiscal 1996 and 1995, the Company purchased and retired 25,500 and 18,000 shares, respectively, under this plan. At September 30, 1997, the number of shares of common stock outstanding includes 62,295 shares subject to purchase by the Company. R I G H T S D I S T R I B U T I O N In July 1997, the Board of Directors declared a dividend of one preferred share purchase right (a "right") for each share of common stock outstanding on August 12, 1997. Each right entitles the registered holder to purchase from the Company, upon certain triggering events, one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the "Series A Preferred Shares"), of the Company, at a purchase price of $135 per one-thousandth of a Series A Preferred Share, subject to adjustment. Redemption of the rights could generally discourage a merger or tender offer involving the securities of the Company that is not approved by the Company's Board of Directors by increasing the cost of effecting any such transaction and, accordingly, could have an adverse impact on stockholders who might want to vote in favor of such merger or participate in such tender offer. The rights will expire on the earlier of (i) July 31, 2007, or (ii) the date on which the rights are redeemed. The terms of the rights may generally be amended by the Board of Directors without the consent of the holders of the rights. 9. Benefit Plan The Company sponsors a defined contribution plan which meets the requirements of Section 401(k) of the Internal Revenue Code. All domestic employees of the Company who meet minimum age and service requirements are eligible to participate in the plan. The plan allows employees to contribute 1% to 15% of their annual salary subject to statutory limitations. The Company contributes 50% of amounts contributed by employees up to 3% of their annual salary. The Company's contribution expense was $165,000, $133,000 and $82,000 in fiscal 1997, 1996 and 1995, respectively. 10. Geographic, Significant Customers and Related Party Information Revenues from customers outside the United States were 38% (31% to Asia and 7% to Europe), 20% (15% to Asia and 5% to Europe) and 12% (8% to Asia and 4% to Europe) of total revenues for fiscal 1997, 1996 and 1995, respectively. During fiscal 1997, 1996 and 1995, the Company had revenues from a related party representing 21% of revenues in each fiscal year. An executive of this customer is a member of the Company's Board of Directors. During fiscal 1997, the Company had revenues from one customer (not a related party) representing 11% of revenues. During fiscal 1995, the Company had revenues from another customer (not a related party) representing 13% of revenues. A financial instrument which potentially exposes the Company to concentration of credit risk is accounts receivable, as the Company's customers are concentrated in the semiconductor industry and relatively few customers account for a significant portion of the Company's revenues. At September 30, 1997 and 1996, accounts receivable from three customers and two customers, respectively, accounted for approximately 46% and 36%, respectively, of accounts receivable. The Company regularly monitors the creditworthiness of its customers and believes that it has adequately provided for any exposure to potential credit losses. 11. Supplemental Cash Flow Information During fiscal 1996 and 1995, the Company acquired $630,000 and $348,000, respectively, of fixed assets under capital leases. During fiscal 1997, the Company recorded deferred compensation of $368,000 relating to certain common stock options granted during the year. During fiscal 1996, the Company recorded compensation expenses of $69,000 in connection with the purchase and retirement of 25,500 shares of restricted common stock (Note 8). During fiscal 1995, the Company recorded deferred compensation of $264,000 relating to certain common stock issued and common stock options granted during the twelve month period prior to the initial filing of the registration statement relating to the Company's initial public offering. 12. Commitments and Contingency L E A S E C O M M I T M E N T S The Company leases manufacturing and office facilities and certain equipment under operating and capital leases (Notes 4 and 5) that expire through 2003. Rent expenses under operating leases for fiscal 1997, 1996 and 1995 was $1,741,000, $976,000 and $725,000, respectively. Future minimum lease payments under operating and capital leases with initial or remaining noncancelable terms of one or more years are as follows as of September 30, 1997:.
(IN THOUSANDS) OPERATING CAPITAL FISCAL LEASES LEASES - -------------------------------------------------------------------------------- 1998 $1,282 $362 1999 1,191 66 2000 1,150 22 2001 1,098 - 2002 1,058 - Thereafter 623 - - -------------------------------------------------------------------------------- Total minimum lease payments $6,402 450 ================================================================= Less-Amount representing interest 43 - -------------------------------------------------------------------------------- Net present value of minimum lease payments $407 ================================================================================
C O N T I N G E N C Y There has been substantial litigation regarding patent and other intellectual property rights in the semiconductor and related industries. The Company has received notice from a third-party alleging infringements of such party's patent rights by certain of the Company's products. The Company's patent counsel is investigating the claim and the Company believes the patents claimed may be invalid. In the event of litigation with respect to this claim, the Company is prepared to vigorously defend its position. However, because patent litigation can be extremely expensive and time consuming, the Company may seek to obtain a license to one or more of the disputed patents. Based upon currently available information, the Company would only do so if such license fees would not be material to the Company's consolidated financial statements. Currently, the Company does not believe that it is probable that future events related to this threatened matter will have an adverse effect on the Company's business. The Company is currently unable to reasonably estimate any possible loss related to this matter. Report of Independent Accountants TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF BROOKS AUTOMATION, INC. In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income, of changes in stockholders' equity and of cash flows present fairly, in all material respects, the financial position of Brooks Automation, Inc. and its subsidiaries at September 30, 1997 and 1996, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. /s/ Price Waterhouse LLP Price Waterhouse LLP Boston, Massachusetts November 12, 1997 FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE DATA) Year Ended September 30, 1997 1996 1995 1994 1993 Revenues $ 86,409 $90,432 $50,958 $26,651 $16,425 Gross Profit 28,014 37,822 21,175 10,646 6,761 Income from operations 946 13,027 7,169 2,778 1,415 Income before income taxes 406 12,973 7,194 2,340 1,189 Income tax provision (benefit) (400) 4,476 2,249 724 51 Net income 806 8,497 4,945 1,616 1,138 Net income per share $ 0.10 $ 1.04 $ 0.73 $ 0.32 $ 0.24 Weighted average number of common and common equivalent shares 8,435 8,199 6,803 5,045 4,737 Total assets $149,730 $64,761 $53,580 $14,488 $12,487 Working capital 112,668 32,582 32,563 6,032 4,261 Long-term obligations 190 589 531 3,227 3,264 Stockholders' equity 134,199 50,691 42,222 5,589 3,388
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
FIRST SECOND THIRD FOURTH (IN THOUSANDS, EXCEPT PER SHARE DATA) QUARTER QUARTER QUARTER QUARTER - ---------------------------------------------------------------------------------------------- Fiscal 1997 Revenues $16,111 $16,433 $23,059 $30,806 Gross profit 5,480 4,398 7,631 10,505 Net income (loss) 40 (1,544) 267 2,043 Net income (loss) per share $ - $ (0.20) $ 0.03 $ 0.23 - ---------------------------------------------------------------------------------------------- Common stock prices High $ 19.50 $ 19.75 $ 19.50 $ 38.69 Low $ 9.50 $ 14.75 $ 12.38 $ 19.50 - ---------------------------------------------------------------------------------------------- Fiscal 1996 Revenues $18,564 $22,602 $25,280 $23,986 Gross profit 7,887 9,614 10,467 9,854 Net income 1,844 2,113 2,375 2,165 Net income per share $ 0.22 $ 0.26 $ 0.29 $ 0.27 - ---------------------------------------------------------------------------------------------- Common stock prices High $ 22.25 $ 16.00 $ 15.88 $ 14.75 Low $ 13.00 $ 10.00 $ 9.75 $ 9.00 - ----------------------------------------------------------------------------------------------
CORPORATE INFORMATION D I R E C T O R S G E N E R A L C O U N S E L Robert J. Therrien Brown, Rudnick, Freed & Gesmer, P.C. Chief Executive Officer One Financial Center President and Treasurer Boston, MA 02111 Brooks Automation, inc. I N D E P E N D E N T Norman B. Brooks A C C O U N T A N T S Retired Price Waterhouse LLP Founder of Brooks Automation, Inc. 160 Federal street Boston, MA 02110 Roger D. Emerick Chairman of the Board T R A N S F E R A G E N T Lam Research Corporation Boston EquiServe Blue Hill Office Park Amin J. Khoury 150 Royall Street Chairman of the Board Canton, MA 02021 B/E Aerospace, Inc. S T O C K L I S T I N G O F F I C E R S The Company's common stock is Robert J. Therrien* traded in the Over-the-Counter Chief Executive Officer Market under the symbol "BRKS" President and Treasurer and quoted on the Nasdaq National Market. As of November David R. Beaulieu* 28, 1997 there were Vice President approximately 97 holders of Engineering record of the Company's common stock. Robert Carey Vice President Asian Operations R E P O R T O N F O R M 10-K A copy of the Company's Annual Robert A. McEachern Report on Form 10-K as filed Vice President with the Securities and Flat Panel Display Engineering Exchange Commission may be obtained from the Company Richard W. McMahon without charge by writing to Vice President Investor Relations. Brooks President-Brooks Automation Canada Automation, Inc., 15 Elizabeth Drive, Chelmsford, MA 01824 Stanley D. Piekos* Vice President A N N U A L M E E T I N G Finance and Chief Financial Officer O F S T O C K H O L D E R S The 1998 Annual Meeting of Michael W. Pippins* Stockholders will be held on Vice President Thursday, February 26, 1998, at Sales and Marketing 10:00 a.m., at 15 Elizabeth Drive, Chelmsford, MA 01824 Michael F. Werner* Vice President D I V I D E N D S Manufacturing and Operations The Company has not paid cash dividends on its common stock Tsunchisa Yamashita and currently intends to retain Vice President earnings to finance future President-Brooks Automation KK growth and, therefore, does not anticipate paying cash dividends in the foreseeable future. * Officer designated as an executive officer for Securities and Exchange Commission reporting purposes. EX-21.01 5 SUBSIDIARIES OF THE REGISTRANT Exhibit 21.01 BROOKS AUTOMATION, INC. Subsidiaries of the Registrant ------------------------------
Name Jurisdiction - ------------------------------------------------------ ---------------- Brooks Automation International Barbados Brooks Automation K.K. Japan Brooks Automation Massachusetts Securities Corporation Massachusetts Brooks Automation, Ltd. United Kingdom Brooks Automation (Canada) Corp. Canada Brooks Automation Korea, Ltd. Korea Brooks Automation Taiwan Taiwan
EX-23.01 6 CONSENT OF INDEPENDENT ACCOUNTANTS Exhibit 23.01 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-95268, 333-07313, 333-07315 and 333-22717) of Brooks Automation, Inc. of our report dated November 12, 1997 appearing on page 42 of the 1997 Annual Report to Stockholders of Brooks Automation, Inc. which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears on page 13 of this Form 10-K. /s/ PRICE WATERHOUSE LLP Price Waterhouse LLP Boston, Massachusetts December 18, 1997 EX-27.01 7 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFOMATION EXTRACTED FROM THE BROOKS AUTOMATION INC. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 12-MOS SEP-30-1997 OCT-01-1996 SEP-30-1997 71,753 0 28,568 160 23,253 127,104 28,632 9,578 149,730 14,436 0 0 0 101 134,098 149,730 86,409 86,409 58,395 27,068 0 0 610 406 806 806 0 0 0 806 .10 .10
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