Brooks Automation, Inc. reports 86.2% Net Income growth in 2018 and 19.7% Revenue growth
11/19/2018 • About Brooks Automation, Inc. (
$BRKS) • By InTwits
Brooks Automation, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 10.9% in FY2018, 8.1% in FY2017, 5.8% in FY2016, 7.6% in FY2015, 4.3% in FY2014
- Brooks Automation, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 2.6%. Average EBITDA Margin for the same period was 7.5%. In FY2018 SBC/Revenue was even higher: 3.1%
- Brooks Automation, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's a lot of higher than industry average of 13.3%.
- CAPEX is quite volatile: $9m in 2018, $3m in 2017, $1m in 2016, $1m in 2015, $1m in 2014
- In the last 5 years the company invested considerably less than D&A: $60m vs. $142m. In FY2018 this situation was still the same: CAPEX was 13 while D&A was 37
- The company has potentially unprofitable business model: ROIC is 4.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Brooks Automation, Inc.'s Revenue surged on 19.7%. Revenue growth showed slowdown in FY18Q4 - it was -12.2% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.8 pp from 8.1% to 10.9% in FY2018.
Gross Margin increased slightly on 1.3 pp from 37.7% to 39.0% in FY2018. Gross Margin followed a growing trend at 1.2 pp per annum in FY2014-FY2018. SG&A as a % of Revenue showed almost no change in FY2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018.
Net Income margin increased on 6.6 pp from 11.9% to 18.5% in FY2018. During FY2014-FY2018 Net Income margin bottomed in FY2016 at -12.4% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 Brooks Automation, Inc. had CAPEX/Revenue of 2.0%. CAPEX/Revenue decreased slightly on 0.90 pp from 2.9% in FY2015 to 2.0% in FY2018. Average CAPEX/Revenue for the last three years was 2.2%.
Accounts receivable as a % of Revenue increased on 2.1 pp from 17.7% to 19.8% in FY2018. Inventories as a % of Revenue increased slightly on 1.4 pp from 13.9% to 15.4% in FY2018. Accounts payable as a % of Revenue showed almost no change in FY2018.
Brooks Automation, Inc. has spent
$86m on M&A in FY2018 which accounts for 13.6% of revenue.
Return on investment
The company operates at good ROE (17.6%) while ROIC is low (4.2%). ROIC increased slightly on 1.8 pp from 2.4% to 4.2% in FY2018. ROE increased on 6.8 pp from 10.8% to 17.6% in FY2018. During FY2014-FY2018 ROE bottomed in FY2016 at -11.7% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.0x and Debt / EBITDA is 2.8x. Debt surged while cash jumped on 94.6%.
Brooks Automation, Inc. has good short term financial stability: Interest coverage ratio (ICR) is 3.3x. Brooks Automation, Inc. has no short term refinancing risk: cash is higher than short term debt (9,885.4%).
Average interest expence paid by the company was 4.9% in FY2018.
Valuation and dividends
Brooks Automation, Inc.'s trades at EV/EBITDA 27.8x and P/E 16.4x.
The company paid 24.0% of Net Income as dividends in FY2018. Dividends grew on average at 4.0% per annum in the last 5 years).
Management team
Brooks Automation, Inc.'s CEO is Stephen S Schwartz. Stephen S Schwartz is a founder and has 8 years tenure with the company. CEO total compensation was
$3,925,995 in FY2018 which included
$643,750 salary. The company's CFO is Lindon G Robertson. Lindon G Robertson has 5 years tenure at the company.
The company has 2.5% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 1,550 employees. The number of employees decreased on 6.7%. Average revenue per employee in FY2018 was
$407,458 and it jumped on 28.3%.
Financial and operational results
FY ended 09/30/2018
Brooks Automation, Inc. ($BRKS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 482.8 | 552.7 | 560.3 | 527.5 | 631.6 | 19.7% |
| Gross Profit | 167.3 | 189.1 | 198.1 | 198.9 | 246.1 | 23.7% |
| SG&A | 111.1 | 115.3 | 130.3 | 141.5 | 167.0 | 18.0% |
| EBITDA | 20.8 | 42.1 | 32.3 | 42.5 | 68.8 | 62.1% |
| EBIT | -2.7 | 16.9 | 4.2 | 14.3 | 31.4 | 119.4% |
| Interest expence | 0.2 | 0.4 | 0.2 | 0.4 | 9.5 | 2,233.3% |
| Tax | -2.0 | 3.4 | | 3.4 | -47.3 | -1,498.0% |
| Net Income | 31.4 | 14.2 | -69.5 | 62.6 | 116.6 | 86.2% |
| Stock Based Compensation | 10.9 | 12.2 | 11.7 | 17.3 | 19.8 | 14.7% |
Balance Sheet
|
|---|
| Cash | 94.1 | 80.7 | 85.1 | 101.6 | 197.7 | 94.6% |
| Accounts Receivable | 80.1 | 86.4 | | 93.5 | 125.2 | 33.9% |
| Inventory | 93.6 | 100.6 | | 73.4 | 97.0 | 32.1% |
| Accounts Payable | 33.7 | 44.9 | | 49.1 | 55.9 | 13.8% |
| Short Term Debt | 0.9 | 0.0 | 0.0 | 0.0 | 2.0 | |
| Long Term Debt | 7.4 | 0.0 | 0.0 | 0.0 | 194.1 | |
Cash flow
|
|---|
| Capex | 5.5 | 16.1 | 12.8 | 12.7 | 12.8 | 0.9% |
| Dividends | 23.0 | 27.0 | 28.0 | 28.0 | 28.0 | 0.0% |
| Acquisitions | 35.6 | 14.5 | 125.2 | 44.8 | 85.8 | 91.5% |
Ratios
|
|---|
| Revenue growth | 14.3% | 14.5% | 1.4% | -5.9% | 19.7% | |
| EBITDA growth | 182.2% | 102.6% | -23.2% | 31.5% | 62.1% | |
|
|---|
| Gross Margin | 34.7% | 34.2% | 35.4% | 37.7% | 39.0% | 1.3% |
| EBITDA Margin | 4.3% | 7.6% | 5.8% | 8.1% | 10.9% | 2.8% |
| EBIT Margin | -0.6% | 3.1% | 0.8% | 2.7% | 5.0% | 2.3% |
| SG&A, % of revenue | 23.0% | 20.9% | 23.2% | 26.8% | 26.4% | -0.4% |
| SBC, % of revenue | 2.3% | 2.2% | 2.1% | 3.3% | 3.1% | -0.1% |
| Net Income Margin | 6.5% | 2.6% | -12.4% | 11.9% | 18.5% | 6.6% |
| CAPEX, % of revenue | 1.1% | 2.9% | 2.3% | 2.4% | 2.0% | -0.4% |
|
|---|
| ROIC | -0.5% | 2.9% | 0.8% | 2.4% | 4.2% | 1.8% |
| ROE | 4.9% | 2.2% | -11.7% | 10.8% | 17.6% | 6.8% |
| Net Debt/EBITDA | -4.1x | -1.9x | -2.6x | -2.4x | -0.0x | 2.4x |
| Interest expence / Average debt | 2.4% | | | | 4.9% | |
People
|
|---|
| Insider ownership | 2.5% | 2.5% | 2.5% | 2.5% | 2.5% | 0.0% |
| Employees | 1,455 | 1,426 | 1,310 | 1,661 | 1,550 | -6.7% |
| Revenue/Employee, th. $ | 332 | 388 | 428 | 318 | 407 | 28.3% |
Brooks Automation, Inc. ($BRKS) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 189 | 207 | 223 | 160 | | 18.4% | 22.4% | 23.0% | -12.2% |
| EBITDA | 29 | 33 | 37 | 13 | | 47.4% | 51.2% | 42.7% | -46.0% |
| Net Income | 16 | 67 | 23 | 10 | | 18.9% | 378.5% | 30.9% | -40.5% |
Balance Sheet
|
|---|
| Cash | 202 | 194 | 179 | 198 | | 143.9% | 86.7% | 53.2% | 94.6% |
| Short Term Debt | 2 | 2 | 2 | 2 | | | | | |
| Long Term Debt | 195 | 195 | 194 | 194 | | | | | |
Ratios
|
|---|
| Gross Margin | 39.7% | 40.6% | 39.9% | 39.2% | | 4.1% | 2.5% | 0.5% | -1.7% |
| EBITDA Margin | 15.5% | 15.9% | 16.4% | 8.4% | | 3.1% | 3.0% | 2.3% | -5.3% |
| Net Income Margin | 8.7% | 32.3% | 10.2% | 6.5% | | 0.0% | 24.1% | 0.6% | -3.1% |
Peers in Semiconductor Equipment
Below we provide Brooks Automation, Inc. benchmarking against other companies in Semiconductor Equipment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -2.0% | 7.8% | 24.7% | 14.0% |
|---|
| Brooks Automation, Inc. ($BRKS) | | 14.5% | 1.4% | -5.9% | 19.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.4% | 38.9% | 40.0% | 44.0% | 41.2% |
|---|
| Brooks Automation, Inc. ($BRKS) | 34.7% | 34.2% | 35.4% | 37.7% | 39.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 7.0% | 10.3% | 12.1% | 16.2% | 16.6% |
|---|
| Brooks Automation, Inc. ($BRKS) | 4.3% | 7.6% | 5.8% | 8.1% | 10.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.3% | 2.7% | 2.5% | 3.2% | 3.0% |
|---|
| Brooks Automation, Inc. ($BRKS) | 1.1% | 2.9% | 2.3% | 2.4% | 2.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.5% | 6.0% | 7.6% | 13.1% | 12.1% |
|---|
| Brooks Automation, Inc. ($BRKS) | -0.5% | 2.9% | 0.8% | 2.4% | 4.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| |
|---|
| Median (31 companies) | -1.2x | -1.0x | -1.2x | -0.7x | -1.0x |
|---|
| Brooks Automation, Inc. ($BRKS) | -4.1x | -1.9x | -2.6x | -2.4x | -0.0x |
