HI yard_man,
I've had a large position in Brks for many years (back when the life sciences was a new division and was losing money as the semis sector was also suffering).
Their two cent miss (VS SOME OTHER CONSENSUS) was masked well by Lindon Robertson during the webcast.
Back in September, Brks issued a press release that Dusty Tenney was leaving the company:
BROOKS AUTOMATION ANNOUNCES TRANSITION OF SAMPLE MANAGEMENT LEADERSHIP
CHELMSFORD, Mass., Sept. 6, 2019 / PRNewswire/ -- Brooks Automation, Inc. (Nasdaq: BRKS) announced today that Dusty Tenney, President Sample Management, will be leaving Brooks effective September 6, 2019.
"We are deeply appreciative of the contributions Dusty has made to the Sample Management business since joining Brooks in 2014," said Steve Schwartz, President and CEO. "Dusty has led a four-fold increase in Life Science revenue, taken the Sample Management business to profitability, and established a new threshold for Sample Management which we plan to aggressively build going forward. Our employees, the entire management team and board of directors all thank Dusty for his leadership and guidance."
Schwartz continued, "With what has been accomplished, we are now focused on transitioning this business to the next phase of operational execution and commercial growth capability to address the multiple opportunities in the growing sample management markets."
During this transition phase of the Sample Management expansion, Steve Schwartz will assume responsibilities as the leader of the business unit.
That was a bit of a surprise to me.
Later Brks announced that their Q4 calendar quarter had some revenue recognition errors. It was then announced that a complete audit of the revenue recognition problems had been found, and amounted to one million dollars of a product had been delivered on October first by a contract supplier and that revenue had been rolled into the Q4(sept 31st), when it should have been in the Q1 (10/01) that was just reported.
I'm guessing ole Dusty packed the numbers. Dr. Steve Schwartz, The very competent CEO, took over responsibility for sample management leadership. He cracks a mean whip and is imo one of the top shelf CEO's out there.
He has an ability to lead in high growth technology businesses, that MUST command a margin and high growth (is unparallelled IMO)r His leadership sells slow growers and builds high growers! I suspect he spent time of knew people at Agilent - that good!
Long story short Lindon quietly called this fiasco as" a 2 million Opex increase". The billings came out of the Q4 and went into the Q1, but along the way several attorney firms started lawsuits and I'm sure the several week audit was done by outside arms length accountants, neither of which is cheap. Lindon indicated that another 1 million of expense would be incurred this quarter and the issue would be behind them.
Both Robertson and Scwchartz are just so very high class leaders!
Their stock can go up and it can go down, it is perhaps the only stock that I think I'll own forever.
I've thrown it in a drawer and forgotten about it.
I believe their semi sector will be cyclical but less so than others in the sector due to their excellence and high vision capabilities.
I believe their life sciences (which levered their cryo technology and coupled it with their robotic capabilities) to be an all but human free storage and freezing business that is tracked by software for location and retrieval capabilities.
Their customers are all of the large global pharmas and most of the great hospitals that are doing leading edge science work on diseases.
They have an operation in China and expressed not knowing what the Corona virus impact will be - so they hedged that a bit in next Q's guidance.
On the other side of the corona virus debacle, their recently acquired Genewhiz division, last year announced a proprietary gene sequencing technique on the virus, of which the corona virus is part of. He mentioned that recently they were very involved with Communicable Disease Centers on three continents.
I found the webcast to be solid and once again as usual, these leaders proved that they are on a road of fast growth with great margins and that road is a long one without competition.
These guys are moat builders!
Oh yea, they are sitting on 210 million cash after netting out 51 million in debt.
Dynamic solid growth builders with a fortress like balance sheet - my kind of company!!
Bob |
