Segment and Geographic Information

12 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment and Geographic Information

Segment and Geographic 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 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 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. Subsequently, the Company reported its financial results during years ended September 30, 2016, 2015 and 2014 based on the revised reporting structure. The change in segments was a result of restructuring actions initiated during fiscal year 2016 to streamline business operations to improve profitability and competitiveness and reflects a change in the manner in which the chief operating decision maker reviews information to assess performance and make decisions about resource allocation. As part of these actions, the Company transitioned to a new internal management structure whereby 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 completed in the third quarter of fiscal year 2016 which marked the transition to a new internal management structure during that period. 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.

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 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, excluding amounts related to the discontinued operations, for the fiscal years ended September 30, 2016, 2015 and 2014 (in thousands):

	Brooks Semiconductor Solutions Group		Brooks Life Science Systems			Total
Fiscal year ended September 30, 2016:
Revenue
Products	$	375,237	$	46,546		$	421,783
Services	76,973		61,567			138,540
Segment revenue	$	452,210	$	108,113		$	560,323
Gross profit	$	159,018	$	39,063		$	198,081
Segment operating income (loss)	37,926		(6,451		)	31,476
Depreciation expense	4,788		3,496			8,284
Assets	317,717		247,735			565,452
Fiscal year ended September 30, 2015:
Revenue
Products	$	406,579	$	50,832		$	457,411
Services	78,058		17,239			95,297
Segment revenue	$	484,637	$	68,071		$	552,708
Gross profit	$	171,379	$	17,726		$	189,105
Segment operating income (loss)	49,695		(19,580		)	30,115
Depreciation expense	4,312		1,295			5,607
Assets	317,069		110,910			427,979
Fiscal year ended September 30, 2014:
Revenue
Products	$	340,617	$	46,415		$	387,032
Services	79,083		16,733			95,816
Segment revenue	$	419,700	$	63,148		$	482,848
Gross profit	$	143,914	$	23,423		$	167,337
Segment operating income (loss)	23,287		(8,431		)	14,856
Depreciation expense	10,677		2,022			12,699
Assets	311,622		103,498			415,120

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 Consolidated Balance Sheets and Consolidated Statements of Operations for the fiscal years ended September 30, 2016, 2015 and 2014 (in thousands):

	As of and for the Year Ended September 30,
	2016		2015		2014
Segment operating income (loss)	$	31,476	$	30,115	$	14,856
Other unallocated corporate expenses	4,400		856		5,096
Amortization of acquired intangible assets	10,799		7,656		6,170
Restructuring and other charges	12,039		4,713		6,289
Total operating income (loss)	$	4,238	$	16,890	$	(2,699	)

Segment assets	$	565,452	$	427,979
Cash, cash equivalents and marketable securities	91,221		214,030
Deferred tax assets	1,982		89,007
Assets held for sale	—		2,900
Equity method investments	27,250		24,286
Other unallocated corporate net assets	—		500
Total assets	$	685,905	$	758,702

Revenue from external customers is attributed to geographic areas based on locations in which customer orders are placed. Net revenue by geographic area for the fiscal years ended September 30, 2016, 2015 and 2014 are as follows (in thousands):

	Year Ended September 30,
	2016		2015		2014
North America	$	209,727	$	199,103	$	174,343
Asia / Pacific/ Other	247,241		231,840		198,695
Europe:
United Kingdom	$	36,611	$	32,160	$	27,078
Rest of Europe	$	66,744	$	89,605	$	82,732
	$	560,323	$	552,708	$	482,848

The majority of our net revenue in North America is generated in the United States which amounted to $208.3 million, $197.4 million and $172.9 million, respectively, during fiscal years ended September 30, 2016, 2015 and 2014

Property, plant and equipment by geographic area as of September 30, 2016 and 2015 are as follows (in thousands):

	September 30,
	2016		2015
North America	$	49,505	$	36,402
Asia / Pacific	952		2,104
Europe	4,428		3,349
	$	54,885	$	41,855

Property, plant and equipment located in the United States amounted to $49.3 million and $36.3 million, respectively, at September 30, 2016 and 2015.