Segment Information

9 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and to assess performance. The Company's Chief Executive Officer is the Company's chief operating decision maker.

Prior to the third quarter of fiscal year 2016, the Company had three operating and reportable segments that consisted of Brooks Product Solutions, Brooks Global Services and Brooks Life Science Systems. During the third quarter of fiscal year 2016, the Company reorganized its previous reporting structure into two operating and reportable segments consisting of: (i) Brooks Semiconductor Solutions Group; and (ii) Brooks Life Science Systems and reported its financial results during the three and nine months ended June 30, 2016 and 2015 based on the revised segment structure which reflects a change in the manner in which the chief operating decision maker reviews information to assess performance of the Company and make decisions about resource allocation. The change in segments is a result of restructuring actions initiated in the second quarter of fiscal 2016 to streamline business operations and improve profitability and competitiveness of the Company. As part of these actions, the operating management responsible for Brooks Product Solutions and Brooks Global Services operating segments was brought under common leadership in the newly formed Brooks Semiconductor Solutions Group segment. The restructuring actions were substantially completed in the third quarter of fiscal year 2016 which marked the transition to a new internal management structure at the end of the third quarter of fiscal year 2016. The Company's prior period reportable segment information has been reclassified to reflect the current segment structure and to conform to the current period presentation. The accounting policies of the operating segments remained unchanged as a result of the realignment. Please refer to Note 18, "Segment and Geographic Information", in the 2015 Annual Report on the Form 10-K for the fiscal year ended September 30, 2015 for a description of such policies.

The Brooks Semiconductor Solutions Group segment provides a variety of products, services and solutions that enable improved throughput and yield in controlled operating environments, as well as an extensive range of support services. The solutions include atmospheric and vacuum robots, tool automation systems that provide precision handling and clean wafer environments, contamination control of wafer carrier front opening unified pods, or FOUPs, as well as cryogenic pumps and compressors that provide vacuum pumping and thermal management solutions used to create and control critical process vacuum applications. The support services include repair services, diagnostic support services, and installation services in support of the products, which enable our customers to maximize process tool uptime and productivity. This segment also provides end-user customers with spare parts and productivity enhancement upgrades to maximize tool productivity.

The Brooks Life Science Systems segment provides automated cold sample management systems for compound and biological sample storage, equipment for sample preparation and handling, consumables, and parts and support services to a wide range of life science customers including pharmaceutical companies, biotechnology companies, biobanks and research institutes. During the first quarter of fiscal year 2016, the Company completed the acquisition of BioStorage, a global provider of comprehensive outsource biological sample service solutions, including collection, transportation, processing, storage, protection, retrieval and disposal of biological samples. These solutions combined with the Company's existing offerings, particularly automation for sample storage and formatting, provide customers with fully integrated sample management cold chain solutions which will help them increase productivity, efficiencies and speed to market.

The Company evaluates the performance and future opportunities of its segments and allocates resources to them based on their revenue, operating income (loss) and returns on invested assets. Operating income (loss) for each segment includes selling, general and administrative expenses directly attributable to the segment. Amortization of acquired intangible assets (excluding completed technology), restructuring and other charges, pension settlement, in-process research and development, as well as other unallocated corporate expenses are excluded from the segments’ operating income (loss). The Company’s indirect overhead costs, which include various general and administrative expenses, are allocated among the segments based upon several cost drivers associated with the respective administrative function, including segment revenue, headcount, or benefits that each segment derives from a specific administrative function. Segment assets exclude cash, cash equivalents, marketable securities, deferred tax assets, assets held for sale and equity method investments.

The following is the summary of the financial information for the Company’s operating and reportable segments for the three and nine months ended June 30, 2016 and 2015 (in thousands):

	Brooks Semiconductor Solutions Group		Brooks Life Science Systems			Total
Three Months Ended June 30, 2016:
Revenue
Product	$	99,254	$	12,342		$	111,596
Services	19,179		16,759			35,938
Total revenue	$	118,433	$	29,101		$	147,534
Gross profit	$	42,904	$	11,259		$	54,163
Segment operating income (loss)	$	13,119	$	(736	)	$	12,383
Three Months Ended June 30, 2015:
Revenue
Product	$	108,687	$	12,129		$	120,816
Services	19,399		4,679			24,078
Total revenue	$	128,086	$	16,808		$	144,894
Gross profit	$	46,515	$	4,672		$	51,187
Segment operating income (loss)	$	17,162	$	(4,656	)	$	12,506
Nine Months Ended June 30, 2016:
Revenue
Product	$	268,671	$	33,567		$	302,238
Services	57,657		42,875			100,532
Total revenue	$	326,328	$	76,442		$	402,770
Gross profit	$	114,506	$	27,011		$	141,517
Segment operating income (loss)	$	22,717	$	(7,555	)	$	15,162
Nine Months Ended June 30, 2015:
Revenue
Product	$	298,737	$	38,204		$	336,941
Services	57,197		12,805			70,002
Total revenue	$	355,934	$	51,009		$	406,943
Gross profit	$	122,938	$	13,362		$	136,300
Segment operating income (loss)	$	31,280	$	(14,563	)	$	16,717
Assets:
June 30, 2016	$	326,083	$	249,638		$	575,721
September 30, 2015	$	317,069	$	110,910		$	427,979

The following is a reconciliation of the Company’s operating and reportable segments' operating income (loss) and segment assets to the corresponding amounts presented in the accompanying unaudited Consolidated Balance Sheets and Consolidated Statements of Operations for the three and nine months ended June 30, 2016 and 2015 (in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2016		2015		2016			2015
Segment operating income	$	12,383	$	12,506	$	15,162		$	16,717
Amortization of acquired intangible assets	2,754		1,917		8,056			5,743
Restructuring and other charges	996		358		9,807			3,711
Other unallocated corporate expenses	139		61		3,464			520
Total operating (loss) income	$	8,494	$	10,170	$	(6,165	)	$	6,743

	June 30, 2016		September 30, 2015
Segment assets	$	575,721	$	427,979
Cash, cash equivalents and marketable securities	72,201		214,030
Deferred tax assets	5,083		89,959
Assets held for sale	2,806		2,900
Equity method investments	26,510		24,286
Other unallocated corporate net assets	—		500
Total assets	$	682,321	$	759,654