Azenta(AZTA) - 2022 Q1 - Quarterly Report

Financial Performance - Revenue increased by 18% for the three months ended December 31, 2021, compared to the same period in 2020, driven by both Life Sciences Products and Life Sciences Services segments [166]. - Revenue increased by 18% to $139.652 million for the three months ended December 31, 2021, compared to $118.142 million for the same period in 2020 [174]. - The Life Sciences Products segment revenue increased by 10% to $49.877 million, while the Life Sciences Services segment revenue increased by 24% to $89.775 million [179]. - Income from continuing operations increased to $2.858 million, while income from discontinued operations rose significantly to $40.462 million [173]. - Revenue from discontinued operations was $203.7 million for the three months ended December 31, 2021, compared to $131.4 million in 2020 [199]. - Net income from discontinued operations increased to $40.5 million for the three months ended December 31, 2021, up from $23.3 million in 2020 [199]. Gross Margin and Operating Expenses - Gross margin was 48.0% for the three months ended December 31, 2021, slightly down from 48.5% in the prior year [166]. - Gross profit was $67.044 million, resulting in a gross margin of 48.0%, down from 48.5% in the prior year [174]. - Operating expenses rose by $10.4 million compared to the three months ended December 31, 2020, due to increases in research and development and selling, general, and administrative expenses [166]. - Operating expenses rose by $10.4 million to $67.369 million, driven by increases in research and development and selling, general, and administrative expenses [174]. - Research and development expenses totaled $6.485 million, an increase of 28% compared to $5.084 million in the prior year [188]. - Selling, general, and administrative expenses increased by 17% to $60.711 million, up from $51.930 million in the previous year [190]. Operating Loss - The company reported an operating loss of $0.3 million for the three months ended December 31, 2021, compared to an operating income of $0.4 million in the prior year [166]. - The company reported an operating loss of $0.325 million, compared to an operating income of $0.356 million in the same period last year [180]. Cash and Cash Equivalents - Cash and cash equivalents totaled $273.0 million as of December 31, 2021, down from $285.3 million as of September 30, 2021, reflecting a decrease of $12.3 million [167]. - Cash and cash equivalents, restricted cash, and marketable securities totaled $231.8 million as of December 31, 2021, down from $244.0 million as of September 30, 2021 [201]. - Cash flows from operating activities were $15.6 million for the three months ended December 31, 2021, compared to $43.7 million in the same period of 2020 [204][205]. - Cash used in investing activities was $18.4 million during the three months ended December 31, 2021, primarily for capital expenditures [206]. Strategic Initiatives - The company completed the sale of its semiconductor automation business for $3.0 billion in cash on February 1, 2022, marking a strategic shift to focus on life sciences [154]. - The company plans to continue investing in research and development and making strategic acquisitions to expand its offerings in the life sciences market [163]. Global Presence - The life sciences business employs approximately 2,900 personnel and operates in over 90 countries, indicating a strong global presence [159][160]. Foreign Currency and Interest Rates - Sales in currencies other than the U.S. dollar accounted for approximately 38% of total sales during the three months ended December 31, 2021 [223]. - Liquid assets denominated in non-functional currencies were approximately $110.0 million at December 31, 2021 [224]. - Foreign currency losses incurred during the three months ended December 31, 2021, were $1.9 million, compared to $0.8 million in the same period of 2020 [224]. - A hypothetical 10% change in foreign exchange rates would result in an approximate change of $3.1 million in net income for the three months ended December 31, 2021 [224]. - A hypothetical 100 basis point change in interest rates would result in a $0.1 million change in interest expense incurred during the three months ended December 31, 2021 [220]. - The company utilizes forward contracts to mitigate exposures to currency movement [224]. Interest Expense - Interest expense decreased to $0.5 million for the three months ended December 31, 2021, compared to $0.6 million in the same period of 2020 [195]. - During the three months ended December 31, 2021, cash interest expense incurred on outstanding term loans was $0.3 million [220].