Washington, D.C. 20549

FORM 10-Q

(Mark One)

~~FORM 10-Q~~

~~(Mark One)~~


☒
x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

~~For the quarterly period ended: June 30, 2016~~



¨	For the quarterly period ended: June 30, 2017

	OR

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to _________

Commission File Number 000-25434

BROOKS AUTOMATION, INC.

(Exact name of registrant as specified in its charter)


Delaware	04-3040660



~~Delaware~~	~~04-3040660~~
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	~~(I.R.S. Employer~~ Identification No.)

15 Elizabeth Drive

Chelmsford, Massachusetts

(Address of principal executive offices)

01824

(Zip Code)

Registrant’s telephone number, including area code: (978) 262-2400

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange ~~Act. (Check one):~~

Act:



Large accelerated filer	☒	x	Accelerated filer	¨ ☐

Non-accelerated filer		¨☐ (Do not check if a smaller reporting company)	Smaller reporting company	¨ ☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No x☒

Indicate the number of shares outstanding of each of the ~~registrant’s~~issuer’s classes of common stock, as of the latest ~~practical~~ practicable date, July ~~21, 2016:~~27, 2017: common stock, $0.01 par value and ~~68,639,222~~69,759,300 shares outstanding.

Table of Contents

BROOKS AUTOMATION, INC.

Table of Contents

	PAGE NUMBER


	~~PAGE NUMBER~~

PART I. FINANCIAL INFORMATION	2 3
Item 1. Consolidated Financial Statements	2 3
Consolidated Balance Sheets as of June 30, ~~2016~~2017 and September 30, ~~2015~~2016 (unaudited)	2 3
Consolidated Statements of Operations for the three and nine months ended June 30, 2017 and 2016 ~~and 2015~~ (unaudited)	3 4
Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended June 30, 2017 and 2016 ~~and 2015~~ (unaudited)	4 5
Consolidated Statements of Cash Flows for the nine months ended June 30, 2017 and 2016 ~~and 2015~~ (unaudited)	5 6
Notes to Consolidated Financial Statements (unaudited)	6 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	37 35
Item 3. Quantitative and Qualitative Disclosures about Market Risk	52 50
Item 4. Controls and Procedures	52 50
PART II. OTHER INFORMATION	52 51
Item 1. Legal Proceedings	52 51
Item 1A. Risk Factors	52 51
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	53 51
Item 5. Other Information	51
Item 6. Exhibits	54 52
Signatures	55 53

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

BROOKS AUTOMATION, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)


	June 30,		September 30,
	2017		2016
Assets
Current assets
Cash and cash equivalents	$	117,081	$	85,086
Marketable securities		12		39
Accounts receivable, net		120,752		106,372
Inventories		105,304		92,572
Prepaid expenses and other current assets		22,215		15,265
Total current assets		365,364		299,334
Property, plant and equipment, net		52,949		54,885
Long-term marketable securities		2,565		6,096
Long-term deferred tax assets		1,460		1,982
Goodwill		210,609		202,138
Intangible assets, net		75,458		81,843
Equity method investments		32,628		27,273
Other assets		5,738		12,354
Total assets	$	746,771	$	685,905
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	49,991	$	41,128
Deferred revenue		33,062		14,966
Accrued warranty and retrofit costs		7,646		6,324
Accrued compensation and benefits		21,718		21,254
Accrued restructuring costs		1,690		5,939
Accrued income taxes payable		10,466		7,554
Accrued expenses and other current liabilities		20,686		22,628
Total current liabilities		145,259		119,793
Long-term tax reserves		1,782		2,681
Long-term deferred tax liabilities		2,950		2,913
Long-term pension liabilities		2,469		2,557
Other long-term liabilities		4,539		4,271
Total liabilities		156,999		132,215
Commitments and contingencies (Note 18)
Stockholders' Equity
Preferred stock, $0.01 par value- 1,000,000 shares authorized, no shares issued or outstanding		—		—
Common stock, $0.01 par value- 125,000,000 shares authorized, 83,216,169 shares issued and 69,754,300 shares outstanding at June 30, 2017, 82,220,270 shares issued and 68,758,401 shares outstanding at September 30, 2016		832		821
Additional paid-in capital		1,867,645		1,855,703
Accumulated other comprehensive income		15,000		15,166
Treasury stock, at cost- 13,461,869 shares		(200,956)		(200,956)
Accumulated deficit		(1,092,749)		(1,117,044)
Total stockholders' equity		589,772		553,690
Total liabilities and stockholders' equity	$	746,771	$	685,905

June 30,
2016 September 30,
2015
Assets
Current assets
Cash and cash equivalents $ 66,116
$ 80,722
Marketable securities 18
70,021
Accounts receivable, net 101,091
86,448
Inventories 98,157
100,619
Deferred tax assets 3,958
17,609
Assets held for sale 2,806
2,900
Prepaid expenses and other current assets 21,078
15,158
Total current assets 293,224
373,477
Property, plant and equipment, net 54,763
41,855
Long-term marketable securities 6,068
63,287
Long-term deferred tax assets 1,125
70,476
Goodwill 202,386
121,408
Intangible assets, net 85,646
55,446
Equity method investments 26,530
24,308
Other assets 12,579
9,397
Total assets $ 682,321
$ 759,654
Liabilities and Stockholders' equity
Current liabilities
Accounts payable $ 41,502
$ 44,890
Deferred revenue 25,522
17,886
Accrued warranty and retrofit costs 5,955
6,089
Accrued compensation and benefits 18,031
20,401
Accrued restructuring costs 5,789
2,073
Accrued income taxes payable 7,168
6,111
Deferred tax liabilities 331
1,251
Accrued expenses and other current liabilities 17,751
15,550
Total current liabilities 122,049
114,251
Long-term tax reserves 2,714
3,644
Long-term deferred tax liabilities 6,962
3,196
Long-term pension liabilities 3,212
3,118
Other long-term liabilities 4,329
3,400
Total liabilities 139,266
127,609
Commitments and contingencies (Note 19)

Stockholders' equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding —
—
Common stock, $0.01 par value, 125,000,000 shares authorized, 82,097,858 shares issued and 68,635,989 shares outstanding at June 30, 2016; 81,093,052 shares issued and 67,631,183 shares outstanding at September 30, 2015 821
811
Additional paid-in capital 1,851,292
1,846,357
Accumulated other comprehensive income 12,598
5,898
Treasury stock at cost- 13,461,869 shares (200,956 ) (200,956 )
Accumulated deficit (1,120,700 ) (1,020,065 )
Total stockholders' equity 543,055
632,045
Total liabilities and stockholders' equity $ 682,321
$ 759,654

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except per share data)


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Revenue
Products	$	141,957	$	111,596	$	396,684	$	302,238
Services		39,760		35,938		114,321		100,532
Total revenue		181,717		147,534		511,005		402,770
Cost of revenue
Products		85,658		69,557		243,360		192,816
Services		24,487		23,814		74,606		68,437
Total cost of revenue		110,145		93,371		317,966		261,253
Gross profit		71,572		54,163		193,039		141,517
Operating expenses
Research and development		11,958		12,819		34,148		39,208
Selling, general and administrative		40,016		31,854		109,496		98,667
Restructuring charges		828		996		2,663		9,807
Total operating expenses		52,802		45,669		146,307		147,682
Operating income (loss)		18,770		8,494		46,732		(6,165)
Interest income		137		55		432		310
Interest expense		(93)		(37)		(286)		(56)
Gain on settlement of equity method investment		—		—		1,847		—
Other loss, net		(314)		(107)		(848)		(289)
Income (loss) before income taxes and earnings of equity method investments		18,500		8,405		47,877		(6,200)
Income tax provision		3,680		220		9,900		75,070
Income (loss) before equity in earnings of equity method investments		14,820		8,185		37,977		(81,270)
Equity in earnings of equity method investments		2,530		379		7,249		1,248
Net income (loss)	$	17,350	$	8,564	$	45,226	$	(80,022)
Basic net income (loss) per share	$	0.25	$	0.12	$	0.65	$	(1.17)
Diluted net income (loss) per share		0.25		0.12		0.64		(1.17)
Dividend declared per share		0.10		0.10		0.30		0.30
Weighted average shares used in computing net income (loss) per share:
Basic		69,711		68,628		69,496		68,437
Diluted		70,405		69,166		70,198		68,437

Three Months Ended
June 30, Nine Months Ended
June 30,
2016 2015 2016 2015
Revenue
Product $ 111,596
$ 120,816
$ 302,238
$ 336,941
Services 35,938
24,078
100,532
70,002
Total revenue 147,534
144,894
402,770
406,943
Cost of revenue
Product 69,557
77,128
192,816
221,877
Services 23,814
16,579
68,437
48,766
Total cost of revenue 93,371
93,707
261,253
270,643
Gross profit 54,163
51,187
141,517
136,300
Operating expenses

Research and development 12,819
12,834
39,208
39,001
Selling, general and administrative 31,854
27,825
98,667
86,845
Restructuring and other charges 996
358
9,807
3,711
Total operating expenses 45,669
41,017
147,682
129,557
Operating income (loss) 8,494
10,170
(6,165 ) 6,743
Interest income 55
199
310
678
Interest expense (37 ) (100 ) (56 ) (300 )
Other (loss) income, net (107 ) 460
(289 ) 2,640
Income (loss) before income taxes and equity in earnings (losses) of equity method investments 8,405
10,729
(6,200 ) 9,761
Income tax provision 220
3,340
75,070
1,790
Income (loss) income before equity in earnings (losses) of equity method investments 8,185
7,389
(81,270 ) 7,971
Equity in earnings (losses) of equity method investments 379
292
1,248
(313 )
Net income (loss) 8,564
7,681
(80,022 ) 7,658
Basic net income (loss) per share $ 0.12
$ 0.11
$ (1.17 ) $ 0.11
Diluted net income (loss) per share $ 0.12
$ 0.11
$ (1.17 ) $ 0.11
Dividend declared per share $ 0.10
$ 0.10
$ 0.30
$ 0.30

Weighted average shares outstanding used in computing net (loss) income per share:
Basic 68,628
67,454
68,437
67,321
Diluted 69,166
68,571
68,437
68,520

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

(In thousands)


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Net income (loss)	$	17,350	$	8,564	$	45,226	$	(80,022)
Other comprehensive income (loss), net of tax:
Cumulative foreign currency translation adjustments		4,592		1,766		(164)		6,793
Unrealized gains (losses) on marketable securities, net of tax effects of $0 during each of the three and nine months ended June 30, 2017, and $0 and ($58) during the three and nine months ended June 30, 2016		4		11		2		(92)
Actuarial gains (losses), net of tax effects of $0 and $5 during the three and nine months ended June 30, 2017, $1 and $0 during the three and nine months ended June 30, 2016		2		(1)		(4)		2
Total other comprehensive income (loss), net of tax		4,598		1,776		(166)		6,703
Comprehensive income (loss)	$	21,948	$	10,340	$	45,060	$	(73,319)

Three Months Ended
June 30, Nine Months Ended
June 30,
2016 2015 2016 2015
Net income (loss) $ 8,564
$ 7,681
$ (80,022 ) $ 7,658
Other comprehensive income (loss), net of tax:
Cumulative foreign translation adjustments 1,766
(821 ) 6,793
(7,386 )
Unrealized gain (loss) on marketable securities, net of tax effects of $0 and ($58) during the three and nine months ended June 30, 2016 and $18 and $(57) during the three and nine months ended June 30, 2015 11
(48 ) (92 ) 154
Actuarial gain, net of tax effects of $1 and $0 during the three and nine months ended June 30, 2016 and $3 and $0 during the three and nine months ended June 30, 2015 (1 ) (12 ) 2
(3 )
Total other comprehensive income (loss), net of tax 1,776
(881 ) 6,703
(7,235 )
Comprehensive income (loss), net of tax $ 10,340
$ 6,800
$ (73,319 ) $ 423

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

BROOKS AUTOMATION, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)


	Nine Months Ended
	June 30,
	2017		2016
Cash flows from operating activities
Net income (loss)	$	45,226	$	(80,022)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		20,649		21,320
Gain on settlement of equity method investment		(1,847)		—
Stock-based compensation		11,081		8,206
Amortization of premium on marketable securities and deferred financing costs		24		368
Undistributed earnings of equity method investments		(7,249)		(1,248)
Deferred income tax provision		498		71,875
Gain on disposal of long-lived assets		(106)		—
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(14,644)		2,862
Inventories		(12,851)		2,110
Prepaid expenses and other current assets		(6,076)		(3,909)
Accounts payable		9,470		(4,689)
Deferred revenue		17,875		7,171
Accrued warranty and retrofit costs		1,299		(87)
Accrued compensation and tax withholdings		279		(6,558)
Accrued restructuring costs		(4,201)		3,720
Accrued expenses and other current liabilities		1,954		(5,010)
Net cash provided by operating activities		61,381		16,109
Cash flows from investing activities
Purchases of property, plant and equipment		(6,827)		(9,414)
Purchases of technology intangibles		(240)		—
Purchases of marketable securities		—		(12,901)
Sales and maturities of marketable securities		3,590		139,388
Disbursement for a loan receivable		—		(1,491)
Acquisitions, net of cash acquired		(5,346)		(125,498)
Purchases of other investments		(170)		(500)
Net cash used in investing activities		(8,993)		(10,416)
Cash flows from financing activities
Proceeds from issuance of common stock		960		948
Payment of deferred financing costs		(27)		(508)
Common stock dividends paid		(20,932)		(20,613)
Net cash used in financing activities		(19,999)		(20,173)
Effects of exchange rate changes on cash and cash equivalents		(394)		(126)
Net increase (decrease) in cash and cash equivalents		31,995		(14,606)
Cash and cash equivalents, beginning of period		85,086		80,722
Cash and cash equivalents, end of period	$	117,081	$	66,116
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property, plant and equipment included in accounts payable	$	1,009	$	1,245
Fair value of non-cash consideration for the acquisition of Cool Lab, LLC		10,348		—

Nine months ended June 30,
2016 2015
Cash flows from operating activities
Net (loss) income $ (80,022 ) $ 7,658
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 21,320
18,929
Stock-based compensation 8,206
9,510
Amortization of premium on marketable securities and deferred financing costs 368
917
Undistributed (earnings) losses of equity method investments (1,248 ) 313
Deferred income tax provision (benefit) 71,875
(2,262 )
Gain on disposal of long-lived assets —
(4 )
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 2,862
(19,070 )
Inventories 2,110
(1,519 )
Prepaid expenses and other current assets (3,909 ) (4,881 )
Accounts payable (4,689 ) 11,600
Deferred revenue 7,171
(2,339 )
Accrued warranty and retrofit costs (87 ) (320 )
Accrued compensation and benefits (6,558 ) (1,907 )
Accrued restructuring costs 3,720
(660 )
Accrued expenses and other current liabilities (5,010 ) 5,506
Net cash provided by operating activities 16,109
21,471
Cash flows from investing activities
Purchases of property, plant and equipment (9,414 ) (5,945 )
Purchases of marketable securities (12,901 ) (58,991 )
Sales and maturities of marketable securities 139,388
74,515
Disbursement for a loan receivable (1,491 ) —
Acquisitions, net of cash acquired (125,498 ) (17,257 )
Proceeds from sales of property, plant and equipment —
6
Purchases of other investments (500 ) (5,000 )
Net cash used in investing activities (10,416 ) (12,672 )
Cash flows from financing activities
Proceeds from issuance of common stock 948
867
Principal repayments of capital lease obligations —
(368 )
Payment of deferred financing costs (508 ) —
Common stock dividends paid (20,613 ) (20,229 )
Net cash used in financing activities (20,173 ) (19,730 )
Effects of exchange rate changes on cash and cash equivalents (126 ) (3,513 )
Net decrease in cash and cash equivalents (14,606 ) (14,444 )
Cash and cash equivalents, beginning of period 80,722
94,114
Cash and cash equivalents, end of period $ 66,116
$ 79,670

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

BROOKS AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Basis of Presentation

The unaudited consolidated financial statements of Brooks Automation, Inc. and its subsidiaries (“Brooks”, or the “Company”) included herein have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all material adjustments, which are of a normal and recurring nature and necessary for a fair statement of the financial position and results of operations and cash flows for the periods presented, have been reflected in the accompanying unaudited consolidated financial statements. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year.

Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted and, accordingly, the accompanying financial information should be read in conjunction with the audited consolidated financial statements and notes thereto contained inon the Company’s Annual Report on Form ~~10-K~~10‑K filed with the United States Securities and Exchange Commission (the “SEC”) for the fiscal year ended September 30, ~~2015~~2016 (the ~~"2015~~"2016 Annual Report on Form ~~10-K"~~10‑K"). The accompanying ~~consolidated balance sheet~~Consolidated Balance Sheet as of September 30, ~~2015~~2016 was derived from the audited annual consolidated financial statements as of the period then ended.

~~Revision~~

2. Summary of ~~Prior Period Financial~~Significant Accounting Policies

Foreign Currency Translation

Certain transactions of the Company and its subsidiaries are denominated in currencies other than their functional currency.

Foreign currency exchange losses generated from the settlement and remeasurement of these transactions are recognized in earnings and presented within “Other loss, net” in the Company’s unaudited Consolidated Statements

~~During~~ of Operations. Net foreign currency transaction and remeasurement losses totaled $0.7 million and $0.5 million, respectively, during the three months ended June 30, 2017 and 2016 ~~the Company identified a classification error related to a presentation of cost of product~~ and ~~service revenue in the Company's consolidated statements of operations for the quarterly~~$1.6 million and annual periods beginning in the fourth quarter of fiscal year 2014 through the quarterly period ended March 31, 2016. The classification error had no impact on the total cost of revenue, gross profit, operating income (loss), net income (loss), as well as basic and diluted net income (loss) per share$1.5 million, respectively, during any of the periods presented. Additionally, the classification error had no impact on the Company's consolidated balance sheets and consolidated statements of cash flows during any of the prior periods. The Company considered the guidance in Accounting Standard Codification (ASC) Topic 250, “~~Accounting Changes and Error Corrections,” ASC Topic 250-10-S99-1, “Assessing Materiality,” and ASC Topic 250-10-S99-2, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements"~~ in evaluating whether the Company’s previously issued consolidated financial statements were materially misstated. The Company concluded this classification error was not material individually or in the aggregate to the financial statements presented during any of the prior reporting periods, and therefore, amendments of previously filed reports were not required. The revisions for these corrections to the applicable prior periods are reflected in the financial information herein and will be reflected in future filings containing such financial information.

~~The following table summarizes the effects of the classification error on the interim prior period financial statements:~~

Three Months Ended,
March 31, 2016 March 31, 2015
As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised
Cost of product revenue $ 65,346
$ (120 ) $ 65,226
$ 79,048
$ (2,356 ) $ 76,692
Cost of service revenue 23,135
120
23,255
14,240
2,356
16,596
Total cost of revenue $ 88,481
$ —
$ 88,481
$ 93,288
$ —
$ 93,288

Six Months Ended,
March 31, 2016 March 31, 2015
As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised
Cost of product revenue $ 123,496
$ (238 ) $ 123,258
$ 149,268
$ (4,519 ) $ 144,749
Cost of service revenue 44,386
238
44,624
27,668
4,519
32,187
Total cost of revenue $ 167,882
$ —
$ 167,882
$ 176,936
$ —
$ 176,936

~~Table of Contents~~

Three Months Ended,
December 31, 2015 December 31, 2014
As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised
Cost of product revenue $ 58,150
$ (118 ) $ 58,032
$ 70,220
$ (2,163 ) $ 68,057
Cost of service revenue 21,251
118
21,369
13,428
2,163
15,591
Total cost of revenue $ 79,401
$ —
$ 79,401
$ 83,648
$ —
$ 83,648

Three Months Ended June 30, 2015
As Previously Reported Adjustment As Revised
Cost of product revenue $ 79,721
$ (2,593 ) $ 77,128
Cost of service revenue 13,986
2,593
16,579
$ 93,707
$ —
$ 93,707

Nine Months Ended June 30, 2015
As Previously Reported Adjustment As Revised
Cost of product revenue $ 228,989
$ (7,112 ) $ 221,877
Cost of service revenue 41,654
7,112
48,766
$ 270,643
$ —
$ 270,643

Fiscal Year Ended September 30, 2015
As Previously Reported Adjustment As Revised
Cost of product revenue $ 307,865
$ (9,517 ) $ 298,348
Cost of service revenue 55,738
9,517
65,255
Total cost of revenue $ 363,603
$ —
$ 363,603

Fiscal Year Ended September 30, 2014
As Previously Reported Adjustment As Revised
Cost of product revenue $ 252,688
$ (2,420 ) $ 250,268
Cost of service revenue 62,823
2,420
65,243
Total cost of revenue $ 315,511
$ —
$ 315,511

~~2. Summary of Significant Accounting Policies~~

~~Computer Software Developed for Internal Use~~

~~Computer software developed for internal use is capitalized in accordance with provisions of the Accounting Standards Codification, or ASC, Topic 350-40,~~ ~~Intangibles Goodwill and Other—Internal Use Software~~. The Company capitalizes direct costs incurred to develop internal-use software during the application development stage after determining software technological requirements and obtaining management approval for funding projects probable of completion. Capitalization of the internal-use software development costs ceases upon substantially completing the project and placing the software into service based on its intended use.

~~During~~ the nine months ended June 30, ~~2016, the Company capitalized direct costs of $2.9 million associated with development of software for its internal use which are included within "Property, plant~~2017 and ~~equipment, net" in the accompanying unaudited Consolidated Balance Sheets. There were no internal-use software development costs as of September 30, 2015.~~

~~Deferred Financing Costs~~

The Company records commitment fees and other costs directly associated with obtaining line of credit financing as deferred financing costs which are presented within "Other assets" in the accompanying unaudited Consolidated Balance Sheets. Deferred financing costs are amortized over the term of the related financing arrangement and included in interest expense in the accompanying unaudited Consolidated Statements of Operations. During the three and nine months ended June 30, 2016, the Company incurred $0.7 million in deferred financing costs associated with obtaining line of credit financing. Amortization expense of approximately $12,000 during the three and nine months ended June 30, 2016 was included in interest expense in the accompanying unaudited Consolidated Statements of Operations. Please refer to Note 8, “Line of Credit”for further information on this arrangement.

2016.

Use of Estimates

The preparation of unaudited consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates are associated with accounts receivable, inventories, goodwill, intangible assets other than goodwill, long-lived assets, derivative financial instruments, deferred income taxes, warranty obligations, revenue recognized using the percentage of completion method, pension obligations and stock-based compensation expense. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances, future projections that management believes to be reasonable under the circumstances. Although the Company regularly assesses these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they occur and become known.

~~Table of Contents~~

Recently Issued Accounting Pronouncements

In ~~June 2016,~~January 2017, the Financial Accounting Standards Board ~~or FASB,~~(the "FASB") issued ~~a new~~an amendment to the accounting guidance ~~for reporting credit losses. The new guidance introduces a new "expected loss"~~related to goodwill impairment ~~model~~testing which ~~applies~~eliminates the requirement to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities and other financial assets. Entities are required to estimate expected credit losses overcalculate the ~~life~~fair value of ~~financial~~individual assets and ~~record~~liabilities of a reporting unit to measure goodwill impairment. In accordance with the provisions of the newly issued guidance, an ~~allowance against~~entity should perform its goodwill impairment test by comparing the ~~assets' amortized cost basis to present them at~~fair value of the reporting unit with its carrying value and recognize an impairment charge for the amount ~~expected~~by which the carrying amount

Table of Contents

exceeds the reporting unit’s fair value, up to ~~be collected. Additionally,~~ the ~~guidance amends the impairment model for available for sale debt securities and requires entities~~amount of goodwill allocated to ~~determine whether all or a portion of the unrealized loss on such debt security is a credit loss.~~that reporting unit. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, ~~2019.~~2019 and should be adopted prospectively. Early adoption of the newly issued guidance is permitted for ~~fiscal years, and~~ interim ~~periods within those years, beginning~~or annual goodwill impairment tests performed after ~~December 15, 2018. The standard should be applied as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.~~January 1, 2017. The Company ~~expects to adopt~~performs its annual goodwill impairment assessment on April 1st of each fiscal year. The Company adopted the guidance during the ~~first~~third quarter of fiscal year ~~2021 and is currently evaluating~~2017. The adoption of the guidance did not have an impact ~~of this guidance~~ on ~~its~~the Company’s financial position ~~and~~or results of operations.

No triggering events indicating goodwill impairment occurred during the three and nine months ended June 30, 2017. Please refer to Note 5, “Goodwill and Intangible Assets” for further discussion.

In ~~May 2016,~~January 2017, the FASB issued an amendment to the ~~revenue recognition~~accounting guidance ~~released in May 2014. The amendment~~on business combinations to clarify the definition of a business when assessing whether a set of transferred assets and activities represents a business. Such set of transferred assets and activities does not represent a business if substantially all of the fair value of the gross assets acquired is ~~intended to reduce the cost and complexity of applying the revenue recognition guidance and result~~concentrated in a ~~more consistent application~~single identifiable asset or a group of similar identifiable assets. If the ~~revenue recognition rules. The amendment clarifies~~threshold is not met, entities need to evaluate whether the ~~implementation guidance on collectibility, non-cash consideration~~set of assets and activities meets the ~~presentation of sales~~requirement that a business includes, at a minimum, an input and ~~other similar taxes, as well as transitional guidance related~~a substantive process that together significantly contribute to ~~completed contracts.~~the ability to create outputs. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and should be ~~applied at the time of the adoption of the revenue recognition guidance issued in May 2014.~~adopted prospectively. Early adoption of the newly issued guidance is ~~not~~ permitted. The Company ~~expects to adopt the guidance during the first quarter of fiscal year 2019 and~~ is currently evaluating the impact of this guidance on its financial position and results of operations.

In April 2016, the FASB issued an amendment to the revenue recognition guidance released in May 2014. The amendment clarifies the implementation guidance on identifying performance obligations and licensing. Specifically, the amendment reduces the cost and complexity of identifying promised goods or services and improves the guidance for determining whether promises are separately identifiable. The amendment also provides implementation guidance on determining whether an entity's promise to grant a license provides a customer with either a right to use the entity's intellectual property (which is satisfied at a point in time) or a right to access the entity's intellectual property (which is satisfied over time). The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and should be applied at the time of the adoption of the revenue recognition guidance issued in May 2014. Early adoption of the newly issued guidance is not permitted. The Company expects to adopt the guidance during the first quarter of fiscal year 2019 and is currently evaluating the impact of this guidance on its financial position and results of operations.

In March 2016, the FASB issued an amendment to the accounting guidance to simplify accounting for share-based payment awards issued to employees. The amendment requires recognition of excess tax benefits or deficiencies within income tax expense or benefit and changes their presentation requirements on the statement of cash flows. Additionally, the entity can make an accounting policy election to either estimate the number of awards that are expected to vest, consistent with the current accounting guidance, or account for forfeitures as they occur. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption of the newly issued guidance is permitted. The Company expects to adopt the guidance during the first quarter of fiscal year 2018 and is currently evaluating the impact of this guidance on its financial position and results of operations.

In March 2016, the FASB issued an amendment to the revenue recognition guidance released in May 2014. The amendment clarifies the application of the principal versus agent guidance, identification of the units of accounting, as well as application of the control principle to certain types of arrangements within the scope of the guidance. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and should be applied at the time of the adoption of the revenue recognition guidance issued in May 2014. Early adoption of the newly issued guidance is not permitted. The Company expects to adopt the guidance during the first quarter of fiscal year 2019 and is currently evaluating the impact of this guidance on its financial position and results of operations.

In February 2016, the FASB issued a new accounting guidance for reporting lease transactions. In accordance with the provisions of the newly issued guidance, a lessee should recognize at the inception of the arrangement a right-of-use asset and a corresponding lease liability initially measured at the present value of lease payments over the lease term. For finance leases, interest on a lease liability should be recognized separately from the amortization of the right-of-use asset, while for operating leases, total lease costs are recorded on a straight-line basis over the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying assets to forgo a recognition of right-of-use assets and corresponding lease liabilities and record a lease expense on a straight-line basis. Entities should determine at the inception of the arrangement whether a contract represents a lease or contains a lease which is defined as a right to control the use of identified property for a period of time in exchange for consideration. Additionally, entities should separate the lease components from the non-lease components and allocate the contract consideration on a relative standalone price basis in

~~Table of Contents~~

accordance with provisions of ASC Topic 606, Revenue from Contracts with Customers. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 and should be adopted via a modified retrospective approach with certain optional practical expedients that entities may elect to apply. The Company expects to adopt the guidance during the first quarter of fiscal year 2020 and is currently evaluating the impact of this guidance on its financial position and results of operations.

In ~~November 2015,~~June 2016, the FASB issued ~~an amendment to the~~new accounting guidance for reporting credit losses. The new guidance introduces a new "expected loss" impairment model that applies to ~~simplify~~most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities and other financial assets. Entities are required to estimate expected credit losses over the ~~presentation~~life of ~~deferred income tax~~financial assets and ~~liabilities in~~record an allowance against the assets’ amortized cost basis to present them at the amount expected to be collected. Additionally, the guidance amends the impairment model for available for sale debt securities and requires entities to determine whether all or a ~~statement~~portion of ~~financial position. Deferred income tax assets, net of~~the unrealized loss on such debt security is a corresponding valuation allowance, and liabilities related to a particular tax-paying component of an entity within a particular tax jurisdiction shall be offset and presented as a single noncurrent amount in a statement of financial position. Deferred income tax assets and liabilities attributable to different tax-paying components of an entity or different tax jurisdictions shall not be offset and be presented separately.credit loss. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, ~~2016.~~2019. Early adoption of the newly issued guidance is ~~permitted.~~permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard should be applied as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance ~~can be adopted via either a prospective or a retrospective approach for all deferred income tax assets and liabilities presented in a statement of financial position.~~is effective. The Company expects to adopt ~~this~~the guidance during the first quarter of fiscal year ~~2018~~2021 and is currently evaluating the impact of this guidance on its financial position and results of operations.

In September 2015, the FASB issued a new accounting guidance to simplify the presentation of measurement-period adjustments recognized in business combinations. Measurement-period adjustments will no longer be recognized by the acquirer retrospectively and will be recorded by the acquirer during the period in which they were determined. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and should be applied prospectively to the adjustments that occur after the effective date of the guidance. Early adoption is permitted for the financial statements that have not been issued, and the Company adopted the guidance during the first quarter of fiscal year 2016 to simplify the presentation of the measurement period adjustments in its consolidated financial statements. During the six months ended March 31, 2016, the Company recorded a measurement period adjustment of $1.1 million related to the acquisition of Contact Co., Ltd and recognized its impact in the accompanying Consolidated Balance Sheets as of the period then ended in accordance with the provisions of the newly adopted guidance. There was no impact on the results of operations during the six months ended March 31, 2016 as a result of this adjustment. This adjustment would have been applied retrospectively and recognized as a reclassification in the accompanying Consolidated Balance Sheets as of September 30, 2015 in accordance with provisions of the previous guidance.

In February 2015, the FASB issued an amendment to the accounting guidance for consolidations of financial statements by changing the analysis that a reporting entity must perform to determine whether it should consolidate certain types of ~~legal~~variable interest entities. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. ~~Early adoption is permitted.~~ The guidance can be adopted either via a full retrospective approach or a modified retrospective approach by recording a cumulative-effect adjustment to beginning equity in the period of

Table of Contents

adoption. The Company ~~expects to adopt the guidance during the first quarter of fiscal year 2017. The Company is currently evaluating the impact of the guidance on its financial position and results of operations.~~

In January 2015, the FASB issued new accounting guidance to simplify income statement classification by removing the concept of extraordinary items from Generally Accepted Accounting Principles, or GAAP. As a result, items that are both unusual in nature and infrequent in occurrence will no longer be separately reported net of tax after the results of continuing operations. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and can be adopted ~~retrospectively or prospectively based on an entity's election. Early adoption is permitted. The Company expects to adopt~~ the guidance during the first quarter of fiscal year 2017. The adoption of the guidance did not have an impact on the Company’s financial position or results of operations. Please refer to Note 9, "Other Balance Sheet Information" for further discussion.

In August 2014, the FASB issued new accounting guidance related to evaluation of relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements issuance date. The guidance is effective for fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company expects to adopt the guidance during the fourth quarter of fiscal year 2017. Early adoption of the newly issued guidance is permitted. The adoption of the guidance is not expected to have ~~a material~~an impact on ~~its~~the Company’s financial position ~~and~~or results of operations.

~~Table of Contents~~

and interim periods within those years, beginning after December 15, 2016. In August 2015, the FASB issued an amendment deferring the effective date of the guidance by one year. The guidance should be adopted retrospectively either for each reporting period presented or via recognizing the cumulative effect at the date of the initial application. Early adoption is permitted only as of annual reporting periods, including the interim periods, beginning after December 15, 2016. The Company expects to adopt the guidance during the first quarter of fiscal year ~~2019 and is currently evaluating~~2019. The Company has initiated the evaluation of the potential impact of ~~this~~adopting the new guidance on its financial position and results of ~~operations.~~

~~In April 2014,~~operations, but has not yet completed such assessment or determined the ~~FASB issued an amendment~~transition method that will be used to adopt the accounting guidance for reporting discontinued operations. The amended guidance raises the threshold for disposals to qualify as a discontinued operation by requiring a component of an entity that is held for sale, or has been disposed of by sale, to represent a strategic shift that has or will have a major effect on operations and financial results. A strategic shift could include the disposal of a major line of business, a major geographical area, a major equity method investment or other major parts of an entity. In addition, the guidance allows companies to have significant continuing involvement and continuing cash flows with the discontinued operation. The guidance became effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2014 and is applied prospectively. The Company adopted the guidance during the first quarter of fiscal year 2016. The adoption of the guidance did not have an impact on the Company's financial position and the results of operations.

new guidance.

Other

For further information with regard to the ~~Company's~~Company’s Significant Accounting Policies, please refer to Note 2 "Summary of Significant Accounting Policies" to the ~~Company's~~Company’s consolidated financial statements included in the ~~2015~~2016 Annual Report on Form ~~10-K.~~

10‑K.

3. Marketable Securities

The Company invests in marketable securities that are classified as available-for-sale and records them at fair value in the ~~Company's~~Company’s unaudited Consolidated Balance Sheets. Marketable securities reported as current assets represent investments that mature within one year from the balance sheet date. Long-term marketable securities represent investments with maturity dates greater than one year from the balance sheet date.

Unrealized gains and losses are excluded from earnings and reported as a separate component of accumulated other comprehensive income until the security is sold or matures. Gains or losses realized from sales of marketable securities are computed based on the specific identification method and recognized as a component of "Other ~~(loss) income,~~loss, net" in the accompanying unaudited Consolidated Statements of Operations. During the three and nine months ended June 30, 2017, the Company sold marketable securities with a fair value and amortized cost of $3.6 million each and recognized net losses of less than $0.1 million. The Company collected cash proceeds of $3.5 million from the sale of marketable securities and reclassified net unrealized holding losses of less than $0.1 million from accumulated other comprehensive income into "Other loss, net" in the accompanying unaudited Consolidated Statements of Operations as a result of these transactions. There were no sales of marketable securities during the three months ended June 30, 2016. During the nine months ended June 30, 2016, the Company sold marketable securities with a fair value of $127.6 million and amortized cost of $127.7 million and recognized ~~gross~~net losses of ~~approximately $158,000 and gross~~$0.2 million. Gross gains reported as a component of ~~approximately $3,000 from~~net losses recognized on the sale of marketable ~~securities.~~securities were insignificant during the nine months ended June 30, 2016. The Company collected cash proceeds of $127.0 million from the sale of marketable securities and reclassified net unrealized ~~net~~ holding losses of ~~approximately $155,000 on the marketable securities based on a specific identification method~~$0.2 million from accumulated other comprehensive income into "Other ~~(loss) income,~~loss, net" in the

Table of Contents

accompanying unaudited Consolidated Statements of Operations as a result of these transactions. ~~During the three and nine months ended June 30, 2015, the Company sold marketable~~There were no unrealized losses on available for sale securities ~~with~~presented as a ~~fair value and amortized cost~~component of $9.5 million and recognized gross gains of approximately $1,400 on sale of marketable securities. The Company collected cash proceeds of $9.5 million from the sale of marketable securities and reclassified unrealized net holding gains of approximately $1,400 on the marketable securities based on a specific identification method from accumulated other comprehensive income ~~into "Other (loss) income, net" in the accompanying unaudited Consolidated Statements of Operations as a result of these transactions.~~

at June 30, 2017. Unrealized ~~gains~~losses on available for sale securities presented as a component of accumulated other comprehensive income were ~~approximately $12,000 and $102,300, respectively,~~insignificant at ~~June 30, 2016 and~~ September 30, 2015. Net unrealized holding (losses) gains on available for sale securities recorded as a component of other comprehensive income (loss) before the impact of reclassifications were approximately $(0.2) million and $0.2 million, respectively, during the nine months ended June 30, 2016 and 2015.

~~Table of Contents~~

2016.

The following is a summary of the amortized cost and the fair value, including accrued interest receivable, as well as unrealized holding gains (losses) on the short-term and long-term marketable securities as of June 30, ~~2016~~2017 and September 30, ~~2015~~2016 (in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
June 30, 2017 :
Corporate securities	$	2,565	$	—	$	—	$	2,565
Other debt securities		12		—		—		12
	$	2,577	$	—	$	—	$	2,577
September 30, 2016 :
Corporate securities	$	2,394	$	—	$	—	$	2,394
Other debt securities		39		—		—		39
Municipal securities		3,704		1		(3)		3,702
	$	6,137	$	1	$	(3)	$	6,135

Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair Value
June 30, 2016:
Corporate securities $ 2,315
$ —
$ —
$ 2,315
Other debt securities 18
—
—
18
Municipal securities 3,741
12
—
3,753
Total marketable securities $ 6,074
$ 12
$ —
$ 6,086
September 30, 2015:
U.S. Treasury securities and obligations of U.S. government agencies $ 30,343
$ 39
$ —
$ 30,382
Corporate securities 54,725
13
(48 ) 54,690
Mortgage-backed securities 857
27
—
884
Other debt securities 5,056
3
—
5,059
Municipal securities 30,258
18
(9 ) 30,267
Bank certificate of deposits 12,024
2
—
12,026

$ 133,263
$ 102
$ (57 ) $ 133,308

The fair values of the marketable securities by contractual maturities at June 30, ~~2016~~2017 are presented below (in thousands):


	Fair Value
Due in one year or less	$	12
Due after ten years		2,565
Total marketable securities	$	2,577

Fair Value
Due in one year or less $ 18
Due after one year through five years 3,753
Due after ten years 2,315
Total marketable securities $ 6,086

Expected maturities could differ from contractual maturities because the security issuers may have the right to prepay obligations without prepayment penalties.

The Company reviews the marketable securities for impairment at each reporting period to determine if any of the securities have experienced an other-than-temporary decline in fair value. The Company considers factors, such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer, the ~~Company's~~Company’s intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of its amortized cost basis. If the Company believes that an other-than-temporary decline in fair value has occurred, it writes down the investment to fair value and recognizes the credit loss in earnings and the non-credit loss in accumulated other comprehensive income. ~~As of June 30, 2016, there~~There were no marketable securities in ~~the~~ unrealized loss ~~position.~~position as of June 30, 2017. As of September 30, ~~2015,~~2016, aggregate fair value of the marketable securities in an unrealized loss position was ~~$40.4~~$2.5 million and was comprised entirely of ~~corporate securities of $31.8 million,~~ municipal ~~securities of $6.6 million, bank certificates of deposit of $1.0 million, as well as U.S. Treasury and Government Agency securities of $1.0 million.~~securities. Aggregate unrealized losses for these securities were ~~$0.1 million~~insignificant as of September 30, ~~2015~~2016 and are presented in the table above. These securities were not considered other-than-temporarily impaired and, as such, the Company did not recognize impairment losses during the ~~periods~~period then ended. The unrealized losses ~~are~~were attributable to changes in interest rates ~~which impact~~that impacted the value of the investments.

Table of Contents

4. Acquisitions

Acquisitions Completed in Fiscal Year 2017

Acquisition of Cool Lab, LLC

On November 28, 2016, the Company acquired 100% of the equity of Cool Lab, LLC ("Cool Lab") from BioCision, LLC ("BioCision"). The Company held a 20% equity ownership interest in BioCision prior to the acquisition. Cool Lab was established as a subsidiary of BioCision on November 28, 2016 upon a transfer of certain assets related to cell cryopreservation solutions with net carrying values of $0.9 million. Cool Lab provides a range of patented and/or patent-pending offerings for sample cooling and freezing, controlled rate freezing, portable cryogenic transport and archival storage solutions for customers with temperature-sensitive workflow process. Cool Lab’s offerings assist in managing the temperature stability of therapeutics, biological samples, and related biomaterials in ultra-cold and cryogenic environments. The acquisition of Cool Lab is expected to allow the Company to extend its comprehensive sample management solutions across the cold chain of custody, which is consistent with the other offerings it brings to its life sciences customers. Please refer to Note 6, "Equity Method Investments" for further information on the equity interest in BioCision held by the Company immediately before the acquisition date.

The aggregate purchase price of $15.2 million consisted of a cash payment of $4.8 million, a liability to the seller of $0.1 million and the settlement of certain preexisting relationships with Cool Lab and BioCision, disclosed as non-cash consideration of $10.3 million, which has been measured at fair value on the acquisition date.

The non-cash consideration of $10.3 million consisted of financial instruments of BioCision held by the Company prior to the acquisition of Cool Lab that were subsequently measured at fair value on the acquisition date and delineated as non-cash consideration paid for Cool Lab. Such non-cash consideration was comprised of: (i) the redeemable fair value of the Company’s existing 20% equity ownership interest in BioCision of $3.1 million, (ii) convertible debt securities of BioCision and warrants of $5.6 million to purchase BioCision’s preferred units, and (iii) term notes of BioCision of $1.6 million including accrued interest. Such pre-acquisition financial instruments had an aggregate carrying value of $8.6 million and were measured at an aggregated fair value of $10.3 million on the acquisition date. As a result of such measurement, the Company recognized a net gain of $1.6 million in its unaudited Consolidated Statements of Operations during the nine months ended June 30, 2017. Please refer to Note 6, "Equity Method Investments" and Note 17, "Fair Value Measurements" for further information on the financial instruments included in the non-cash consideration and the valuation techniques and inputs used in fair value measurements.

The Company used a market participant approach to record the assets acquired and liabilities assumed in the Cool Lab acquisition. The purchase price allocation is based on a preliminary valuation and subject to further adjustments within the measurement period as additional information becomes available related to the fair value of such assets acquired and liabilities assumed. The fair values of intangible assets acquired and residual goodwill were preliminary as of June 30, 2017. The Company will refine such fair value estimates as new information becomes available during the measurement period. Any adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the acquisition date.

The preliminary amounts recorded were as follows (in thousands):


	Fair Value of Assets and Liabilities
Inventory	$	1,283
Intangible assets		6,100
Goodwill		8,527
Accrued liabilities		(30)
Other liabilities		(686)
Total purchase price	$	15,194

Table of Contents

Fair values of intangible assets acquired consisted of: (i) a customer relationship intangible asset of $3.6 million attributable to a certain customer, (ii) completed technology of $1.2 million and (iii) other customer relationship intangible assets of $1.3 million. The Company used the income approach in accordance with the excess-earnings method to estimate the fair value of customer relationship intangible assets which is equal to the present value of the after-tax cash flows attributable to the intangible asset only. The Company used the income approach in accordance with the relief-from-royalty method to estimate the fair value of the completed technology which is equal to the present value of the after-tax royalty savings attributable to owning that intangible asset. The weighted average amortization periods for intangible assets acquired are 3 years for the customer relationship intangible asset attributable to a certain customer, 8 years for completed technology and 10 years for other customer relationship intangible assets. The intangible assets acquired are amortized over the total weighted average period of 5.5 years using methods that approximate the pattern in which the economic benefits are expected to be realized, including percentage of revenue expected to be generated from sales to a certain customer over the contract term.

Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired and has been assigned to the Brooks Life Science Systems segment. Goodwill is primarily the result of expected synergies from combining the operations of Cool Lab with the Company’s operations and is deductible for tax purposes.

The Company recorded a liability of $0.7 million in the purchase price allocation that represented a preacquisition contingency incurred on the acquisition date. The obligation is related to a rebate that is due to a particular customer if the annual product sales volume metrics exceed threshold amounts under the provisions of the contract assumed by the Company. Fair value of such liability was determined based on a probability weighted discounted cash flow model. The carrying amount of the liability was $0.7 million at June 30, 2017. Additionally, the Company recognized a customer relationship intangible asset of $3.6 million related to this arrangement, as discussed above.

The operating results of Cool Lab have been reflected in the results of operations for the Brooks Life Science Systems segment from the date of the acquisition, which included approximately one month of activity during the first quarter of fiscal year 2017. During the three months ended June 30, 2017, revenue and net loss from Cool Lab recognized in the Company’s results of operations were $1.1 million and less than $0.1 million, respectively. During the nine months ended June 30, 2017, revenue and net loss from Cool Lab recognized in the Company’s results of operations were $2.5 million and $0.3 million, respectively. During the three and nine months ended June 30, 2017, the net loss included charges of $0.1 million and $0.4 million, respectively, related to the step-up in value of the acquired inventories and amortization expense $0.4 million and $0.8 million, respectively, related to acquired intangible assets.

During the three and nine months ended June 30, 2017, the Company incurred $0.1 million and $0.4 million, respectively, in non-recurring transaction costs with respect to the Cool Lab acquisition which were recorded in "Selling, general and administrative" expenses within the accompanying unaudited Consolidated Statements of Operations.

The Company did not present a pro forma information summary for its consolidated results of operations for the three and nine months ended June 30, 2017 and 2016 as if the acquisition of Cool Lab occurred on October 1, 2015 because such results were immaterial.

Acquisitions Completed in Fiscal Year 2016

Acquisition of BioStorage Technologies, Inc.

On November 30, 2015, the Company completed its acquisition of BioStorage Technologies, Inc., or BioStorage, an Indiana-based global provider of comprehensive sample management and integrated cold chain solutions for the biosciences industry. These solutions include collection, transportation, processing, storage, protection, retrieval and disposal of biological samples. These solutions combined with the ~~Company's~~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. This acquisition will allow the Company to access a broader customer base that is storing samples at ultra cold temperatures and simultaneously provide opportunities for BioStorage to use the ~~Company's~~Company’s capabilities to expand into new markets. Please refer to Note 4,

The Company acquired 100% of the issued and outstanding shares of BioStorage. A cash payment of $130.7 million, net of the seller's cash of $2.8 million, resulted in a net cash outflow of $128.0 million, including $125.5 million ascribed to the purchase price and $2.5 million for retention arrangements with certain employees based on the completion of a service retention period. The cash payment included a debt repayment of $3.2 million and transaction costs of $2.9 million paid by the Company on behalf of BioStorage.

The Company recorded the assets acquired and liabilities assumed related to BioStorage at their preliminary fair values as of the acquisition date, from a market participant’s perspective. The purchase price allocation was prepared on a preliminary basis and is subject to further adjustments as additional information becomes available concerning the fair value of the assets acquired and liabilities assumed. The preliminary fair values of the tangible and intangible assets acquired were based upon preliminary valuations and the Company's estimates and assumptions that are subject to change within the measurement period. As of June 30, 2016, the primary areas that remained preliminary included fair values of intangible assets acquired, certain tangible assets, tax-related matters and residual goodwill. The Company expects to continue obtaining information to assist it with determining the fair values of the net assets acquired during the measurement period. Any adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the acquisition date.

~~The preliminary amounts recorded were as follows (in thousands):~~

Fair Value of Assets and Liabilities
Accounts receivable $ 16,942
Prepaid expenses and other current assets 321
Property, plant and equipment 14,345
Intangible assets 41,460
Goodwill 79,889
Other assets 53
Debt assumed (385 )
Accounts payable (1,708 )
Accrued liabilities (9,423 )
Deferred revenue (1,766 )
Long-term deferred tax liabilities (14,169 )
Other liabilities (61 )
Total purchase price, net of cash acquired $ 125,498

Table of Contents

"Acquisitions" to the Company’s consolidated financial statements included in the 2016 Annual Report on Form 10‑K for further information on this transaction.

At the closing of the acquisition of BioStorage, a cash payment of $5.4 million was placed into escrow which consisted of $2.9 million ascribed to the purchase price and $2.5 million related to retention arrangements with certain employees. The payment of $2.9 million included $1.9 million related to satisfaction of the sellers' indemnification obligations with respect to BioStorage's representations and warranties and other indemnities, as well as $1.0 million related to potential purchase price adjustments. The remaining escrow balance of $2.5 million is payable to certain employees upon completion of a service retention period. Such retention payments were not considered a part of the purchase price, but rather recorded as a separate asset acquired and included within "Prepaid expenses and other current assets" in the accompanying Consolidated Balance Sheets. The escrow balance related to such retention payments was reduced by ~~$1.1 million~~its full amount subsequent to the acquisition date, and ~~had a~~there was no escrow balance ~~of $1.4 million~~outstanding as of June 30, ~~2016. All remaining escrow balances were unchanged as of June 30, 2016.~~

The fair value of customer relationship intangible assets of $36.6 million was estimated based on the income approach in accordance with the excess-earnings method. In accordance with the excess-earnings method, the value of the intangible asset is equal to the present value of the after-tax cash flows attributable to the intangible asset only. The weighted average amortization period for the customer relationships intangible assets acquired in the BioStorage acquisition is 11.0 years.

The fair value of the trademark intangible assets acquired of $4.9 million was estimated based on the income approach in accordance with the relief-from-royalty method. In accordance with the relief-from-royalty method, the value of an intangible asset is equal to the present value of the after-tax royalty savings attributable to owning that intangible asset. The weighted average amortization period for the trademark intangible assets acquired in the BioStorage acquisition is 8.0 years.

The intangible assets acquired are amortized over the total weighted average period of 13.6 years using an accelerated depreciation method which approximates the pattern in which the economic benefits are expected to be realized.

Fair values of intangible assets and their estimated useful lives are determined based on estimates of future expected after-tax cash flows and royalty savings, customer attrition rates, discount rates, as well as assumptions about the period of time over which the Company will be deriving economic benefits from the acquired intangible assets.

Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired and has been assigned to the Company's Brooks Life Science Systems segment. Goodwill is primarily the result of expected synergies from combining the operations of BioStorage with the Company and is not deductible for tax purposes.

2017.

The operating results of BioStorage have been reflected in the results of operations for the Brooks Life Science Systems segment from the date of the acquisition, which included one month of activity during the first quarter of fiscal year 2016. During the three months ended June 30, 2017, revenue and net income from BioStorage recognized in the Company’s results of operations were $15.3 million and $2.4 million, respectively. During the three months ended June 30, 2016, revenue and net income from BioStorage recognized in the Company’s results of operations were $12.4 million and $1.1 million, respectively. During the nine months ended June 30, 2017, revenue and net income from BioStorage recognized in the Company’s results of operations were $46.0 million and $6.0 million, respectively. During the nine months ended June 30, 2016, revenue and net income from BioStorage recognized in the Company’s results of operations were $30.3 million and $0.3 million, respectively. During the three and nine months ended June 30, 2017, the net income included amortization expense of $1.1 million and $3.4 million, respectively, related to acquired intangible assets. During the three and nine months ended June 30, 2016, the net income included amortization expense of $0.9 million and $2.0 million, respectively, related to acquired intangible assets.

During each of the three ~~and nine~~ months ended June 30, 2017 and 2016, the Company incurred $0.1 million ~~and $3.2 million, respectively,~~ in non-recurring transaction costs with respect to the BioStorage acquisition which were recorded in "Selling, general and administrative" expenses within the unaudited Consolidated Statements of Operations. The Company incurred $0.2 million and $3.2 million, respectively, of such costs during the nine months ended June 30, 2017 and 2016. The retention payment of $2.5 million was recorded within prepaid expenses and other current assets at the acquisition date and ~~will be~~is recognized as compensation expense over the service period or upon a triggering event in the underlying change in control agreements. ~~During~~The Company recorded $0.1 million of compensation expense related to this arrangement during the nine months ended June 30, 2017 and $0.3 million and $0.7 million, respectively, during the three and nine months ended June 30, ~~2016,~~2016. There were no such charges recorded during the ~~Company recorded $0.3~~three months ended June 30, 2017. The retention payment balance was $0.1 million ~~and $0.7 million, respectively, of compensation expense~~at September 30, 2016. There was no balance related to ~~this arrangement.~~

the retention payment at June 30, 2017.

The following unaudited ~~proforma~~pro forma financial information represents a summary of the consolidated results of operations for the Company and BioStorage for the three and nine months ended June 30, 2016 as if the acquisition of BioStorage occurred on October 1, 2014 (in thousands):


	Three Months Ended		Nine Months Ended
	June 30, 2016		June 30, 2016
Revenue	$	147,534	$	413,816
Net income (loss)		9,163		(74,024)
Basic income (loss) per share	$	0.13	$	(1.08)
Diluted income (loss) per share	$	0.13	$	(1.08)
Weighted average shares outstanding used in computing net income (loss) per share:
Basic		68,628		68,437
Diluted		69,166		68,437

~~Table of Contents~~

Three Months Ended, June 30, Nine Months Ended, June 30,
2016 2015 2016 2015
Revenue $ 147,534
$ 155,237
$ 413,816
$ 436,509
Net income (loss) 9,163
6,966
(74,024 ) 251

Basic (loss) income per share $ 0.13
$ 0.10
$ (1.08 ) $ —
Diluted (loss) income per share $ 0.13
$ 0.10
$ (1.08 ) $ —

Weighted average shares outstanding used in computing net loss per share:
Basic 68,628
67,454
68,437
67,321
Diluted 69,166
68,571
68,437
68,520

The unaudited pro forma information presented above reflects historical operating results of the Company and BioStorage and includes the impact of certain adjustments directly attributable to the business combination. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition of BioStorage had taken place on October 1, 2014. ~~Amortization and depreciation expense of $1.4 million, transaction costs of $0.3 million, and restructuring charges of $0.3 million were included in proforma net income during~~During the ~~three~~nine months ended June 30, ~~2015. During the three months ended June 30, 2015,~~2016, the adjustments reflected in the unaudited ~~pro forma~~proforma information included aggregate amortization and depreciation expense of $0.6 million and tax effects of ~~$0.8 million, respectively.~~$0.5 million. The impact of the restructuring charges and transaction costs was excluded from the ~~proforma~~pro forma net income (loss) during the three ~~months ended June 30, 2016. During the nine months ended June 30, 2016~~ and 2015, the adjustments reflected in the unaudited pro forma information included aggregate amortization and depreciation expense of $0.6 million and $3.2 million, respectively, and tax effects of $0.5 million and $0.3 million, respectively. Additionally, the impact of transaction costs of $3.2 million and restructuring charges of $1.9 million was included in the proforma net income during the nine months ended June 30, 2015. The impact of the transaction costs and the restructuring charges was excluded from the proforma net loss during the nine months ended June 30, 2016.

~~Acquisitions Completed in Fiscal Year 2015~~

~~Acquisition of Contact Co., Ltd.~~

On August 14, 2015, the Company acquired all of the outstanding stock of Contact Co., Ltd., or Contact, a Japanese-based provider of automated cleaner products for wafer carrier devices used in the global semiconductor markets. The acquisition of Contact expands the Company's offerings of contamination control solutions within its Brooks Semiconductor Solutions Group segment, strengthens its current capabilities and technology used in its contamination control solutions business and enhances its long-term strategy of gaining share in its core semiconductor markets.

The aggregate purchase price of $6.8 million, net of cash acquired, consisted of a cash payment of $1.9 million, the assumption of the seller's debt of $8.8 million, seller's cash of $4.8 million and contingent consideration of $0.8 million payable upon achievement of certain specified targets and events. The entire debt amount was fully repaid as of September 30, 2015.

The Company recorded the assets acquired and liabilities assumed related to Contact at their preliminary fair values as of the acquisition date. The purchase price allocation was prepared on a preliminary basis and is subject to further adjustments as additional information becomes available concerning the fair value of the assets acquired and liabilities assumed. The preliminary fair values of the tangible and intangible assets acquired were based upon preliminary valuations and the Company's estimates and assumptions that are subject to change within the measurement period. As of June 30, 2016, the primary areas that remained preliminary included fair values of intangible assets acquired, certain tangible assets, tax-related matters and residual goodwill. The Company expects to continue obtaining information to assist it with determining the fair values of the net assets acquired during the measurement period. Any adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the acquisition date.

During the first quarter of fiscal year 2016, the Company finalized the valuation of property, plant and equipment reported at fair value at the acquisition date. As a result, the Company recorded a measurement period adjustment of $1.1 million as a decrease in the tangible assets' fair value and a corresponding increase in goodwill. There was no impact on the depreciation expense as a result of the tangible assets' fair value revision during the period then ended. The Company adopted Accounting Standards Update, or ASU, 2015-16, ~~Simplifying the Accounting for Measurement Period Adjustments, during the first quarter of fiscal year 2016 and recognized the impact of the measurement period adjustment in the accompanying unaudited~~

Table of Contents

~~Consolidated Balance Sheets as of June 30, 2016 in accordance with the provisions of the newly adopted guidance.~~

~~The impact of the measurement period adjustment is reflected in the following preliminary purchase price allocation table (in thousands):~~

Fair Value of Assets and Liabilities
Accounts receivable $ 42
Inventories 2,020
Prepaid expenses and other current assets 484
Property, plant and equipment 79
Completed technology 2,290
Goodwill 4,195
Other assets 1,410
Accounts payable (1,089 )
Accrued liabilities (1,823 )
Long-term deferred tax liabilities (774 )
Total purchase price, net of cash acquired $ 6,834

Fair value of the contingent consideration of $0.8 million was determined based on a probability-weighted average discounted cash flow model and recorded in "Accrued expenses and other current liabilities" in the Company's unaudited Consolidated Balance Sheets. The Company remeasures the fair value of the contingent consideration at each reporting date until the arrangement is settled. Fair value of the contingent consideration was $0.5 million at June 30, 2016, and the Company recognized a corresponding gain of $0.3 million on the fair value remeasurement during the

nine months ended June 30, 2016. There was no gain recognized on the contingent consideration fair value remeasurement during the three months ended June 30, 2016. Please refer to Note 18 “Fair Value Measurements” for further information on the fair value measurement of the contingent consideration.

At June 30, 2016, the Company had approximately $749,000 in an escrow account which related to potential working capital adjustments and the sellers' satisfaction of general representations and warranties. At the closing of the acquisition of Contact, the escrow balance was $1.5 million which was reduced by approximately $750,000 during fiscal year 2016 as a result of a payment made to the sellers upon termination of a certain third-party arrangement.

Fair value of the completed technology intangible assets was estimated based on the income approach in accordance with the excess-earnings method. The weighted average amortization period for the completed technology intangible assets acquired in the Contact acquisition is 5.0 years. The intangible assets acquired are amortized using an accelerated depreciation method which approximates the pattern in which the economic benefits are expected to be realized.

Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired and has been assigned to the Company's Brooks Semiconductor Solutions Group segment. Goodwill is primarily the result of expected synergies from combining the operations of Contact with the Company and is not deductible for tax purposes.

The operating results of Contact have been included in the results of operations for the Brooks Semiconductor Solutions Group segment from the date of the acquisition. During the three months ended June 30, 2016, revenue and net loss from Contact recognized in the Company's results of operations were $0.8 million and $0.4 million, respectively. During the nine months ended June 30, 2016, revenue and net loss from Contact recognized in the Company's results of operations were $3.0 million and $1.0 million, respectively. During the three and nine months ended June 30, 2016, the net loss included charges of $0.1 million and $0.5 million, respectively, related to the step-up in value of the acquired inventories and amortization expense of $0.2 million and $0.5 million, respectively, related to amortization of acquired intangible assets.

The Company did not present aunaudited pro forma financial information ~~summary for its consolidated results of operations~~ for the three and nine months ended June 30, ~~2015 as if~~2017 since the ~~acquisition of Contact occurred on October 1, 2014 because such results were insignificant.~~

~~Acquisition of FluidX Ltd.~~

~~Table of Contents~~

On October 1, 2014, the Company acquired all of the outstanding stock of FluidX Ltd. (“FluidX”), a UK-based provider of biological sample storage tubes and complementary bench-top instruments. The Company paid, in cash, aggregate merger consideration of $15.5 million, net of cash acquired. The acquisition of FluidX provides the Company with the opportunity to enhance its existing capabilities with respect to biobanking solutions in the Brooks Life Science Systems segment.

~~The Company recorded the following amounts for the assets acquired and liabilities assumed related to FluidX at their fair values as of the acquisition date (in thousands):~~

Fair Values of Assets and Liabilities
Accounts receivable $ 1,980
Inventory 2,857
Prepaid and other current assets 213
Property, plant and equipment 101
Completed technology 1,230
Trademarks and trade names 750
Customer relationships 4,810
Goodwill 8,247
Accounts payable (2,079 )
Deferred revenue (72 )
Accrued liabilities (992 )
Long-term deferred tax liabilities (1,540 )
Total purchase price, net of cash acquired $ 15,505

~~The purchase price was allocated based on the fair value of the identified assets acquired and liabilities assumed as of the acquisition date from a market participant’s perspective.~~

On January 23, 2015, the Company reached a settlement with respect to certain working capital adjustments with the sellers of FluidX stock. On February 3, 2015, the Company made a payment to the sellers as a result of this settlement, which increased the purchase price by $0.1 million. Prior to June 30, 2016, the Company had $1.5 million in a general escrow account held by the unrelated third party. The balance was remitted to the sellers and fully released during the three months ended June 30, 2016. The Company finalized the purchase price allocation for FluidX acquisition within the measurement period. Adjustments to the initial purchase price allocation recorded during the measurement period were not material to the Company's financial position.

Fair values of the trademarks and the completed technology acquired were estimated based on the income approach in accordance with the relief-from-royalty method, which states that the value of an intangible asset is equal to the present value of the after-tax royalty savings attributable to owning that intangible asset. Fair value of customer relationships acquired was estimated based on the income approach in accordance with the excess-earnings method. The weighted average amortization periods for intangible assets acquired in the FluidX acquisition are 5.0 years for each of completed technology, trademarks, and customer relationships.

~~The intangible assets acquired are amortized using an accelerated depreciation method which approximates the pattern in which the economic benefits are expected to be realized.~~

Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired and has been assigned to the Company's Brooks Life Science Systems segment. Goodwill is primarily the result of expected synergies from combining the operations of FluidX with the Company and is not deductible for tax purposes.

~~The operating~~ results of ~~FluidX have been~~BioStorage were included in the Company’s consolidated results of operations for the Brooks Life Science Systems segment from the date of the acquisition. During the three months ended June 30, 2016, revenue and net income from FluidX were $4.0 million and $0.1 million, respectively. During the nine months ended June 30, 2016, revenue and net loss from FluidX were $11.7 million and $0.3 million, respectively. The net income (loss) during the three and nine months ended June 30, 2016 included amortization expense of $0.3 million and $0.9 million, respectively, related to acquired intangible assets. During the three months ended June 30, 2015, revenue and net loss from FluidX were $3.8 million and $0.3 million, respectively. During the nine months ended June 30, 2015, revenue and net loss from FluidX were $11.2 million and $0.5 million, respectively. The net loss during the three and nine months ended June 30, 2015 included charges of $0 million and $1.0 million, respectively, related to the step-up in value of the acquired inventories and amortization expense of $0.3 million and $1.0 million, respectively, related to acquired intangible assets.

periods then ended.

5. Goodwill and Intangible Assets

Goodwill represents the excess of net book value over the estimated fair value of net tangible and identifiable intangible assets of a reporting unit. Goodwill is tested for impairment annually or more often if impairment indicators are present at the reporting unit level. If the existence of events or circumstances indicates that it is more likely than not that fair values of the reporting units are below their carrying values, the Company performs additional impairment tests during interim periods to evaluate goodwill for impairment. No triggering events indicating goodwill impairment occurred during the three and nine months ended June 30, 2017.

The Company ~~elected April 1 as~~performs its annual goodwill impairment assessment ~~date~~on April 1st of each fiscal year. During the three months ended June 30, 2017, the Company adopted on a prospective basis the Accounting Standard Update 2017-04, Intangibles- Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment issued by the FASB as a part of simplification initiative. The adoption of the guidance is expected to reduce the cost and complexity of evaluating goodwill for impairment and did not have an impact on the Company’s financial position or results of operations during the three and nine months ended June 30, 2017. In accordance with provisions of the guidance, the Company initially assesses qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company determines, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying value, it performs ~~additional~~a quantitative goodwill impairment ~~tests~~test by comparing the reporting unit’s fair value with its carrying value. An impairment loss is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. No impairment loss is recognized if ~~triggering events occur.~~ the fair value of the reporting exceeds its carrying value

As of June 30, 2017, the Company completed the annual goodwill impairment test for its five reporting units and determined that no adjustment to goodwill was necessary. The Company conducted a qualitative assessment for three reporting units within the Brooks Semiconductor Solutions Group segment and determined that it was not likely that their fair values were less than their carrying values. As a result of the analysis, the Company did not perform the quantitative assessment for these reporting units and did not recognize impairment losses. The Company also performed the quantitative goodwill impairment test for the fourth reporting unit within the Brooks Semiconductor Solutions Group segment and for the Brooks Life Science Systems reporting unit. The Company determined that no adjustment to goodwill was necessary for these two reporting units since their fair values substantially exceeded their respective carrying values. If events occur or circumstances change that would more likely than not reduce the fair ~~values~~value of any reporting unit below its carrying value, the Company will evaluate such reporting ~~units below their carrying values,~~unit’s goodwill ~~will be evaluated~~ for impairment between annual tests.

Table of Contents

Prior to the third quarter of fiscal year 2016, the Company had six reporting units, including five reporting units that had goodwill. Four reporting units were a part of the Brooks Product Solutions operating segment, and each of the Brooks Global Services segment and Brooks Life Science Systems segment represented a reporting unit. During the third quarter of fiscal year 2016, the Company reorganized its operating and reportable segments into (i) Brooks Semiconductor Solutions Group, or BSSG,; and (ii) Brooks Life Science Systems and realigned its reporting units to reflect the revised segment structure. The combination of the Brooks Product Solutions segment and Brooks Global services segment did not have a direct impact on the goodwill at the reporting unit level. As a result of this re-alignment, the Company had five reporting units as of June 30, 2016, including four reporting units within the Brooks Semiconductor Solutions Group operating segment and one reporting unit which was Brooks Life Science Systems operating segment. Please refer to Note 16, "Segment Information" for additional information on the operating and reporting segments realignment. The revised reporting unit structure reflects the aggregation of two reporting units, Polycold and CTI Cryogenics, into one reporting unit called BSSG Cryogenics as a result of the reorganization of the Company’s internal management structure and the economic similarities that exist between the two reporting units. The Company tested goodwill for impairment before and after the reporting unit aggregation and determined that fair value of each reporting unit individually and in aggregate exceeded their carrying values. The fair value of the BSSG Cryogenics reporting unit significantly exceeded its carrying value as of June 30, 2016. BSSG Cryogenics goodwill carrying amount was $24.0 million million as of June 30, 2016.

The Company completed its annual goodwill impairment test as of April 1 and determined that no adjustment to goodwill was necessary. Fair values of all of the reporting units, except for Polycold, substantially exceeded their respective carrying values. Fair value of Polycold reporting unit on a standalone basis exceeded its carrying value by 12%. During the second quarter of 2016, the Company concluded that recent operating trends and declining forecasts for the Polycold reporting unit represented indicators of potential goodwill impairment. As a result, the Company performed the first step of the quantitative goodwill impairment test as of February 1, 2016 and determined that the fair value exceeded the carrying value by 18%, and that no goodwill impairment existed. The Company determined Polycold's fair value based on an Income Approach in accordance with the Discounted Cash Flow method, or DCF method, which is based on future cash flow forecasts discounted at a weighted-average cost of capital. Forecasted sales volumes, product costs and the resulting future cash flows used in the valuation of Polycold are driven by various factors, such as customer demand, macroeconomic environment and competitive dynamics, and may impact fair value of Polycold's goodwill. During the three months ended June 30, 2016, the Company incorporated lower projected future cash flows into the model due to lower forecasted revenue and gross margin in fiscal year 2016 which resulted in a decrease of the excess of Polycold's fair value over its carrying value from 18% during the second quarter of fiscal year 2016 to 12% during the third quarter of fiscal year 2016. The estimated fair value of Polycold's reporting unit assumed a taxable transaction. Polycold's goodwill carrying amount was $24.0 million as of the date of each goodwill impairment assessment.

The components of the Company’s goodwill by an operating segment at June 30, ~~2016~~2017 and September 30, ~~2015~~2016 are as follows (in thousands):


	Brooks
	Semiconductor		Brooks
	Solutions		Life Science
	Group		Systems		Other		Total
Gross goodwill, at September 30, 2016	$	655,781	$	135,301	$	26,014	$	817,096
Accumulated goodwill impairments		(588,944)		—		(26,014)		(614,958)
Goodwill, net of accumulated impairments, at September 30, 2016		66,837		135,301		—		202,138
Acquisitions and adjustments		(56)		8,527		—		8,471
Gross goodwill, at June 30, 2017		655,725		143,828		26,014		825,567
Accumulated goodwill impairments		(588,944)		—		(26,014)		(614,958)
Goodwill, net of accumulated impairments, at June 30, 2017	$	66,781	$	143,828	$	—	$	210,609

Brooks
Semiconductor
Solutions
Group Brooks
Life Science
Systems Other Total
Gross goodwill, at September 30, 2014 $ 651,067
$ 47,378
$ 26,014
$ 724,459
Accumulated goodwill impairments (588,944 ) —
(26,014 ) (614,958 )
Goodwill, net of accumulated impairments, at September 30, 2014 62,123
47,378
—
109,501
Acquisitions and adjustments 3,660
8,247
—
11,907
Gross goodwill, at September 30, 2015 654,727
55,625
26,014
736,366
Accumulated goodwill impairments (588,944 ) —
(26,014 ) (614,958 )
Goodwill, net of accumulated impairments, at September 30, 2015 65,783
55,625
—
121,408
Acquisitions and adjustments 1,050
79,928
—
80,978
Gross goodwill, at June 30, 2016 655,777
135,553
26,014
817,344
Accumulated goodwill impairments (588,944 ) —
(26,014 ) (614,958 )
Goodwill, net of accumulated impairments, at June 30, 2016 $ 66,833
$ 135,553
$ —
$ 202,386

During the nine months ended June 30, ~~2016,~~2017, the Company recorded a goodwill increase of ~~$79.9~~$8.5 million primarily related ~~primarily~~ to the acquisition of ~~BioStorage~~Cool Lab which represented the excess of the consideration transferred over the fair value of the net assets acquired. Additionally, the Company recorded a measurement period adjustment related to the acquisition of Contact which resulted in a decrease in the tangible assets' fair value of $1.1 million and a corresponding increase in goodwill. Please

~~Table of Contents~~

refer to the Note 4 "Acquisitions" for further information on ~~the measurement period adjustment recorded during the first quarter of fiscal year 2016.~~

this transaction.

The components of the Company’s identifiable intangible assets as of June 30, ~~2016~~2017 and September 30, ~~2015~~2016 are as follows (in thousands):


	June 30, 2017						September 30, 2016
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value
Patents	$	9,028	$	7,724	$	1,304	$	7,808	$	7,486	$	322
Completed technology		60,745		53,931		6,814		60,485		51,018		9,467
Trademarks and trade names		9,142		4,776		4,366		9,142		4,204		4,938
Customer relationships		119,260		56,286		62,974		114,263		47,147		67,116
	$	198,175	$	122,717	$	75,458	$	191,698	$	109,855	$	81,843

June 30, 2016 September 30, 2015
Cost Accumulated
Amortization Net Book
Value Cost Accumulated
Amortization Net Book
Value
Patents $ 7,808
$ 7,463
$ 345
$ 7,808
$ 7,394
$ 414
Completed technology 60,441
49,982
10,459
60,748
46,718
14,030
Trademarks and trade names 9,143
4,028
5,115
4,241
3,604
637
Customer relationships 114,201
44,474
69,727
77,716
37,351
40,365
Total intangible assets $ 191,593
$ 105,947
$ 85,646
$ 150,513
$ 95,067
$ 55,446

Amortization expense for intangible assets was ~~$3.8~~$4.3 million and ~~$3.2~~$3.8 million, respectively, during the three months ended June 30, 2017 and 2016 and ~~2015~~$12.7 million and $11.1 ~~million and $9.6~~ million, respectively, during the nine months ended June 30, ~~2016~~2017 and ~~2015.~~

2016.

Estimated future amortization expense for the intangible assets for the remainder of fiscal year ~~2016~~2017 and the subsequent four fiscal years is as follows (in thousands):


Fiscal year ended September 30,
2017	$	3,970
2018		15,693
2019		15,468
2020		14,156
2021		8,253
Thereafter		17,918
	$	75,458

Fiscal year ended September 30,
2016 $ 3,810
2017 15,566
2018 14,052
2019 13,713
2020 12,909
Thereafter 25,596
$ 85,646

6. Equity Method Investments

The Company accounts for certain of its investments using the equity method of accounting and records its proportionate share of the ~~investee's~~investee’s earnings (losses) in its results of operations with a corresponding increase (decrease) in the carrying value of the investment.

Table of Contents

BioCision, LLC

~~In March 2014,~~

At September 30, 2016, the Company ~~acquired~~held a ~~22%~~20% equity interest in ~~BioCision, LLC, or~~ BioCision, a privately-held company based in Larkspur, California, which was accounted for ~~$4.0 million. During fiscal year 2015,~~as an equity method investment. The carrying value of the ~~Company's equity~~ investment in BioCision was diluted from 22% to 20% as a result of stock options granted to new employees. BioCision develops, manufactures and markets cell cryopreservation products used to improve and standardize the tools and methods for biomaterial sample handling. The Company determined that BioCision represented a variable interest entity since the level of equity investment$1.7 million at risk was not sufficient to finance its activities without additional financial support. However, the Company does not qualify as a primary beneficiary since it does not have the power to direct BioCision's product research, development, selling and marketing activities that have the most significant impact on its economic performance. The Company's loss exposure is limited to the amount of investment and loan funding provided to BioCision. As such, the Company concluded that BioCision should not be consolidated in its financial statements.

September 30, 2016. During the three and nine months ended June 30, 2016, ~~and 2015,~~ the Company recorded a loss associated with BioCision of ~~approximately~~ $0.3 million and ~~$0.2~~$0.7 million, respectively. ~~During each of the nine month periods ended June~~

At September 30, 2016, ~~and 2015,~~ the Company ~~recorded~~held a ~~loss associated with~~term loan receivable from BioCision ~~of $0.7 million. At June 30, 2016~~ and September 30, 2015, the carrying value of the investment in BioCision in the Company’s unaudited Consolidated Balance Sheets was $2.0 million and $2.7 million, respectively. At June 30, 2016, amount payable to BioCision was approximately $32,000.

~~The Company purchased BioCision's~~ five-year convertible debt securities with a warrant agreement to purchase BioCision’s preferred ~~units of BioCision for $2.5 million on each of the following dates of December 22, 2014 and February 2, 2015, resulting in a total purchase price of $5.0 million. Interest accrues on the~~units. The convertible debt securities ~~at a rate of 9% per annum,~~ and ~~is due with~~ the ~~principal at maturity. The convertible debt securities~~warrant were recorded at fair value during each reporting period, and ~~accounted for in accordance with~~

~~Table of Contents~~

the ~~fair value method. The warrant was recorded at fair value~~remeasurement gains and ~~accounted for~~losses were recognized as a ~~derivative instrument. As~~component of ~~June 30, 2016,~~"Other loss, net" in the Company’s unaudited Consolidated Statements of Operations. The fair value of the convertible debt securities and the warrant was $5.8 million and ~~$46,850, respectively. As of~~less than $0.1 million, respectively, at September 30, ~~2015, the fair value of the convertible debt securities and the warrant was $5.3 million and $0.1 million, respectively.~~

For further information regarding the convertible debt securities and the warrant, refer to Note 18, “Fair Value Measurements”. The Company re-measures the fair values of the BioCision convertible debt securities and the warrant during each reporting period and recognizes the respective gains or losses as a component of "Other (loss) income, net" in the accompanying unaudited Consolidated Statements of Operations. The Company recognized remeasurement gains of $0.2 million and $0.5 million, respectively, during the three and nine months ended June 30, 2016.

During the nine months ended June 30, 2016, the Company ~~provided a series~~recognized remeasurement gains of ~~bridge loans~~$0.5 million related to ~~BioCision~~these financial instruments. Please refer to Note 17, “Fair Value Measurements” for further information on the valuation techniques and inputs used in fair value measurements of the convertible debt securities and the warrant. The term loan with an aggregate principal amount of ~~$600,000 bearing~~$1.5 million bore an annual interest rate of 10% ~~to support BioCision's working capital requirements. On March 8, 2016, the Company made an additional loan of $150,000 to BioCision,~~ and the bridge loans were converted into a part of the permanent term loan, collectively, the" loan", which provides for financing of an aggregate principal amount up to $1.5 million, including the first tranche of $750,000 and a second tranche of $750,000 which was provided to BioCision ~~on June 15, 2016~~ to support its working capital requirements. All principal and accrued interest outstanding on the loan mature on December 31, 2019 or at an earlier date upon the occurrence of certain events. In the event that BioCision obtains a certain equity investment or has a liquidity event, in either case, on or beforeAt September 30, 2016, all accrued and unpaid interest will be due and payable, and interest will thereafter accrue and be due and payable monthly in arrears. If no such equity investment or liquidity event occurs on or before September 30, 2016, all accrued and unpaid interest will be converted into additionalthe term loan principal, and interest will accrue thereafter and be due and payable monthly in arrears. The financing supports growing working capital requirements in part due to BioCision entering into a supply agreement with a certain customer. The Company will be entitled to receive quarterly royalty payments from BioCision equal to 15% of the revenue generated from this certain customer arrangement until the earlier of: (i) the termination of the customer arrangement, (ii) the receipt by the Company of an aggregate amount of $1.5 million of royalty proceeds, and (iii) the date the loan is repaid in full. All outstanding and unpaid royalties become immediately due and payable to the Company if the customer arrangement is terminated. The loan is secured by a first priority perfected lien on BioCision's cash flows from the aforementioned customer arrangement, as well as a second priority perfected subordinated security interest and a lien on its personal property and other intangible assets, including intellectual property. At June 30, 2016, the aggregate loan of $1,500,000 was recorded at its carrying value of $1.5 million and included in "Other assets" in the ~~accompanying~~Company’s unaudited Consolidated Balance Sheets.

Please refer to Note 8, "Equity Method and Other Investments" to the Company’s consolidated financial statements included in the 2016 Annual Report on Form 10‑K for further information on these financial instruments.

On November 28, 2016, BioCision established Cool Lab as its subsidiary upon transferring certain assets related to cell cryopreservation solutions with net carrying values of $0.9 million, in which the Company acquired a 100% equity interest on that date for an aggregate purchase price of $15.2 million. The purchase price consisted of a cash payment of $4.8 million, a liability to the seller of $0.1 million, which has been satisfied, and non-cash consideration of $10.3 million measured at fair value on the acquisition date which was comprised of: (i) the redeemable fair value of the existing 20% equity ownership interest in BioCision of $3.1 million, (ii) the convertible debt securities of BioCision and warrants of $5.6 million to purchase BioCision’s preferred units, and (iii) the term notes of BioCision of $1.6 million including accrued interest.

Carrying value of the equity method investment in BioCision was $1.2 million on November 28, 2016 and reflected BioCision’s losses of $0.5 million recorded from October 1, 2016 through the acquisition date. The Company has traditionally recorded the income and losses related to the equity method investment in BioCision one quarter in arrears. During the first quarter of fiscal year 2017, the Company recorded two additional months of activity in the carrying value of the investment as a result of its settlement. The Company deemed the amount of $0.2 million related to two additional months of activity to be insignificant. The equity method investment in BioCision was measured at fair value of $3.1 million at the acquisition date, and as a result the Company recognized a gain of $1.8 million upon the redemption of the equity method investment in its unaudited Consolidated Statements of Operations during the nine months ended June 30, 2017. On November 28, 2016, convertible debt, warrant and the term loan with carrying values of $5.8 million, less than $0.1 million and $1.6 million, respectively, were measured at their fair values of $5.6 million, less than $0.1 million and $1.6 million, respectively. As a result of ~~each of the funding rounds described above,~~such measurement, the Company ~~reconsidered whether BioCision represents a variable interest entity subject~~recognized an aggregate loss of $0.2 million upon the settlement of these financial instruments in "Other loss, net" in its unaudited Consolidated Statements of Operations during the nine months ended June 30, 2017. Please refer to ~~consolidation. The Company concluded that BioCision remains a variable interest entity since~~Note 4, "Acquisitions" and Note 17, "Fair Value Measurements" for further information on the ~~level of equity investment at risk is not sufficient to finance its activities without additional financial support. However,~~acquisition transaction and the ~~Company does not qualify as a primary beneficiary since it does not have the power to direct BioCision's product research, development, selling~~valuation techniques and ~~marketing activities that have the most significant impact on its economic performance. As such, the Company concluded that BioCision will not be consolidated~~inputs used in ~~the Company's financial statements.~~

fair value measurements.

ULVAC Cryogenics, Inc.

The Company ~~participates~~and ULVAC Corporation of Chigasaki, Japan each own a 50% stake in ~~a 50%~~the joint venture, ULVAC Cryogenics, ~~Inc., or UCI, with ULVAC Corporation of Chigasaki, Japan.~~Inc (“UCI”). UCI manufactures and sells cryogenic vacuum pumps, principally to ULVAC Corporation.

The carrying value of the investment in UCI was ~~$24.5~~$32.6 million and ~~$21.5~~$25.6 million, respectively, at June 30, ~~2016~~2017 and September 30, ~~2015.~~2016. During the three months ended June 30, ~~2016~~2017 and ~~2015,~~2016, the Company recorded income of ~~$0.7~~$2.5 million and ~~$0.6~~$0.7 million, respectively, representing its proportionate share of ~~UCI's~~UCI’s earnings. During the nine months

Table of Contents

ended June 30, ~~2016~~2017 and ~~2015,~~2016, the Company recorded income of ~~$2.0~~$7.7 million and ~~$0.9~~$2.0 million, respectively, representing its proportionate share of ~~UCI's~~UCI’s earnings. Management fee payments received by the Company from UCI were $0.3 million and $0.2 million, ~~each~~respectively, during the three months ended June 30, ~~2016~~2017 and ~~2015.~~2016. Management fee payments received by the Company from UCI were ~~$0.6~~$0.8 million and ~~$0.4~~$0.6 million, respectively, during the nine months ended June 30, ~~2016~~2017 and ~~2015.~~2016. During the ~~three~~nine months ended June 30, ~~2015,~~2017 and 2016, the Company incurred charges from ~~UCI's~~UCI’s for products or services of ~~$0.1 million.~~$0.2 million each. Such charges were insignificant during the three months ended June 30, ~~2016. During the nine months ended June 30, 2016~~2017 and ~~2015, the Company incurred charges from UCI's for products or services of $0.2 million each.~~2016. At June 30, ~~2016~~2017 and September 30, ~~2015,~~2016, the Company owed UCI ~~approximately $34,000 and~~ $0.1 million ~~respectively,~~ in connection with accounts payable for unpaid products and services.

~~Yaskawa Brooks Automation, Inc.~~

During fiscal year 2015, the Company participated in a 50% joint venture with Yaskawa Electric Corporation, or Yaskawa, called Yaskawa Brooks Automation, Inc., or YBA, which came to closure in March 2015 and was liquidated on September 3, 2015. YBA exclusively marketed and sold Yaskawa’s semiconductor robotics products and the Company’s automation hardware products to semiconductor customers in Japan. During the first quarter of fiscal year 2015, the Company and

~~Table of Contents~~

Yaskawa agreed in principle to dissolve the joint venture. In connection with the planned dissolution, YBA assessed the recoverability of assets held by the joint venture and notified its equity partners of an asset impairment. As a result, the Company recorded an impairment charge of $0.7 million related to the write down of the carrying value of the equity investment in YBA to fair value during the first quarter of fiscal year 2015.

During the three and nine months ended June 30, 2015, the Company earned revenue of $0.0 million and $2.1 million, respectively, from YBA and incurred charges of $47,000 and $1.0 million, respectively, from YBA for products or services. Net loss associated with YBA recognized by the Company during the three and nine months ended June 30, 2015 was $0.1 million and $0.5 million, respectively. There were no amounts receivable by the Company from YBA or owed by the Company to YBA at September 30, 2015.

7. ~~Note Receivable~~

In fiscal year 2012, the Company provided a strategic partner (the “Borrower”) a loan of $3.0 million to support the Borrower's future product development and other working capital requirements. The loan initially bore a stated interest rate of 9%, and the outstanding principal and interest were initially due in May 2015. The Company also received a warrant to purchase the Borrower's common stock in the event of an equity offering by the Borrower and certain other rights related to conversion of the loan, including the first refusal to acquire the Borrower and a redemption premium. The loan was initially secured by a security agreement granting the Company a first-priority security interest in all of the Borrower's assets.

The Company determined that the Borrower represented a variable interest entity since the level of equity investment at risk was not sufficient for the entity to finance its activities without additional financial support. However, the Company does not qualify as the primary beneficiary since it would not absorb the majority of the expected losses from the Borrower and does not have the power to direct the Borrower's product research, development and marketing activities that have the most significant impact on its economic performance. The Company has no future contractual funding commitments to the Borrower and, as a result, the Company's exposure to loss is limited to the outstanding principal and interest due on the loan.

During fiscal year 2014, the Borrower informed the Company of its intent to secure additional funding from an investment program funded by the Commonwealth of Massachusetts designed to support early-stage companies. In connection with the Borrower’s efforts to secure additional financing, the Company agreed to subordinate its security interest in the assets of the Borrower to the new lender. Additionally, the Company agreed to extend the due date of its loan by approximately 5 years, to September 2019, in order to coincide with the due date of the new loan. The amended loan has a stated interest rate of 10%.

In connection with its efforts to secure additional financial support, the Borrower developed revised assumptions about its future cash flows. Based on the information provided by the Borrower and the subordination of the loan to the new lender, the Company determined it was probable that it would not recover all amounts due from the loan and recorded an impairment charge of $2.6 million during fiscal year 2014. The impairment charge included the warrant write-off and was recorded in the "Selling, general and administrative" expenses in the Company's Consolidated Statements of Operations.

The fair value of the loan was determined by considering the fair value of the collateral using valuation techniques, principally the discounted cash flow method, reduced by the amounts committed to the new lender. The observable inputs used in the Company's analysis were limited primarily to the discount rate, which was based on a rate commensurate with the risks and uncertainties of the Borrower. As a result, the fair value of the loan could vary under different conditions or assumptions, including the varying assumptions regarding future cash flows of the Borrower or discount rates.

At June 30, 2016 and September 30, 2015, the carrying value of the note receivable was $1.0 million. No triggering events indicating impairment of the note receivable occurred during the three and nine months ended June 30, 2016 and 2015, respectively.

8. Line of Credit

~~On May 26, 2016, the~~

The Company ~~and certain of its subsidiaries entered into a credit agreement with Wells Fargo Bank, N.A., or Wells Fargo. The credit agreement provides for~~maintains a five-year senior secured revolving line of credit ~~or line~~(the "line of ~~credit,~~credit"), with Wells Fargo Bank, N.A. ("Wells Fargo"), that provides for up to $75 million of ~~$75.0 million. Availability under~~borrowing capacity, subject to borrowing base availability, as defined in the agreement governing the line of credit is subject to a borrowing base which is redetermined from time to time based on certain percentage of certain eligible U.S. assets, including accounts receivable, inventory, real property, as well as machinery and equipment. The agreement includes sublimits of up to $25.0 million for letters of credit and $7.5 million of swing loans at the time there is more than one lender under the credit agreement. The line of credit expires on May 26, 2021 with all outstanding principal and interest due and payable on such date or an earlier date if declared due and payable on such earlier date pursuant to the terms of the credit agreement (by acceleration or otherwise). Subject to certain conditions of the credit agreement, the net cash proceeds from sales of certain collateral during the term of the arrangement are required to be used to prepay borrowings under the line of credit. ~~The Company may also voluntarily prepay certain amounts under the line of credit without penalty or premium.~~ There were no amounts outstanding under the line of credit as of June 30, ~~2016.~~

~~Table of Contents~~

Borrowings under the line of credit bear an annual interest rate equal to, at the Company’s option, the base rate or the LIBOR rate plus, in each case, an applicable margin determined based on the Company's liquidity as of the first day of each fiscal quarter. LIBOR rate is reset at the beginning of each selected interest period based on the rate then in effect. The base rate is a fluctuating interest rate equal to the highest of (i) the federal funds rate plus 0.50%, (ii) the one month LIBOR rate plus 1.00%2017 and ~~(iii) the prime lending rate announced by Wells Fargo.~~September 30, 2016. During the three and nine months ended June 30, ~~2016,~~2017, the Company incurred ~~$0.7~~less than $0.1 million and $0.1 million, respectively, in ~~deferred financing costs which included commitments~~ fees and other costs directly associated with obtaining the line of credit. Please refer to Note 2, "Summary of Significant Accounting Policies" for further information on the deferred financing fees. In addition to interest on any outstanding borrowings under the credit agreement, the Company is required to pay monthly fees of 0.25% per year related to the unused portion of the ~~revolver~~line of credit commitment ~~amounts. The Company incurred approximately $16,000 in such~~amount. Such fees were insignificant during the three and nine months ended June 30, 2016. All outstanding borrowings under the credit agreement are guaranteed by the Company along with certain U.S. subsidiaries and secured by a first priority perfected security interest in substantially all of the Company's and guarantor's assets in the U.S., subject to certain exceptions. Additionally, the Company granted Wells Fargo a mortgage lien on certain company-owned real properties.

The line of credit contains certain customary representations and warranties, a financial covenant, affirmative and negative covenants, as well as events of default. In the event in which the Company's liquidity is less than the greater of (i) 12.5% of the commitments under the line of credit, and (ii) $9.375 million, and continuing until the time such liquidity during a 60-consecutive day period has been equal to or greater than the greater of (a) 12.5% of the commitments under the line of credit, and (b) $9.375 million, the Company is required to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 measured as of the last day of each fiscal month ending during such period. Liquidity is defined as a sum of (a) excess availability under the credit agreement; and (b) unrestricted cash and cash equivalents located in bank accounts in the United States that are subject to a control agreement in favor of Wells Fargo, limited to a maximum amount of 50% of liquidity. Negative covenants limit the Company's ability to incur additional indebtedness, liens, sell assets, consolidate or merge with or into other entities, pay non-cash dividends (and cash dividends if the Company fails to meet certain payment conditions), make certain investments, prepay, redeem or retire subordinated debt, and enter into certain types of transactions with the Company’s affiliates. If any of the events of default occur and are not waived or cured within applicable grace periods, any unpaid amounts under the credit agreement, including principal and interest, may be declared immediately due and payable and the credit agreement may be terminated. The Company was in compliance with the line of credit covenants as of June 30, 2017 and September 30, 2016.

9. Please refer to Note 11, "Line of Credit" to the Company’s consolidated financial statements included in the 2016 Annual Report on Form 10‑K for further information on the line of credit arrangement.

8. Income Taxes

~~The~~

During the three and nine months ended June 30, 2017, the Company recorded an income tax provision of $3.7 million and $9.9 million, respectively, which was driven primarily by foreign income. Tax provision recorded during the nine months ended June 30, 2017 was partially offset by $0.9 million of tax benefits related to the reduction of reserves for unrecognized tax benefits resulting from the expiration of statutes of limitations.

During the three and nine months ended June 30, 2016, the Company recorded an income tax provision of $0.2 million and $75.1 million, ~~respectively, for the three and nine months ended June 30, 2016.~~respectively. The income tax provision of $0.2 million recorded during the third quarter of fiscal year 2016 was driven primarily ~~driven~~ by global income generated during the ~~quarter,~~period, partially offset by $0.3 million of tax benefits related to the reduction of reserves for unrecognized tax benefits resulting from the expiration of ~~statutes~~statues of limitations. The tax provision of $75.1 million recorded during the nine months ended June 30, 2016 was driven primarily ~~driven~~ by the change in athe valuation allowance against U.S. net deferred tax assets recognized during the second quarter of fiscal year 2016. Partially offsetting the valuation allowance provision were benefits related to pre-tax losses in the U.S., the reinstatement of the U.S. research and development tax credit retroactive to January 1, 2015, and reductions of reserves for unrecognized tax benefits resulting from the expiration of ~~statutes~~the statute of limitations.

The Company recorded an income tax provision of $3.3 million and $1.8 million, respectively, for the three and nine months ended June 30, 2015. The income tax provision of $3.3 million for the third quarter of fiscal year 2015 was primarily driven by global income generated during the quarter and interest related to unrecognized tax benefits. The tax provision of $1.8 million during the nine months ended June 30, 2015 was primarily driven by global income generated during the period and partially offset by $0.9 million of tax benefits related to the reduction of reserves for unrecognized tax benefits resulting from the expiration of statutes of limitations and by $0.9 million of tax benefits resulting from the reinstatement of the U.S. federal research and development tax credit, retroactive to January 1, 2014.

~~ASC Topic 740,~~ ~~Income Taxes~~, requires that all available evidence, both positive and negative, be considered in determining, based on the weight of that evidence, whether a valuation allowance is needed. The weight given to the potential effect of negative and positive evidence should be commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, (a) the more positive evidence is necessary and (b) the more difficult it is to support a conclusion that a valuation allowance is not needed for some portion or all of the deferred tax asset. A cumulative loss in recent years is considered a significant piece of negative evidence that is difficult to overcome in assessing the need for a valuation allowance.

The Company evaluates the realizability of its deferred tax assets by tax-paying component and assesses the need for a valuation allowance on an annual and quarterly basis. The Company evaluates the profitability of each tax-paying component

~~Table of Contents~~

on a historic cumulative basis and on a forward looking basis in the course of performing this analysis. The Company evaluated all positive and negative evidence in concluding it was appropriate to establish a full valuation allowance against U.S. net deferred tax assets during the second quarter of fiscal year 2016.

The Company evaluated negative evidence to assess if it is more likely than not that the Company could make use of the U.S. deferred tax assets before they expire. In reviewing performance over the recent years, the Company currently shows cumulative income. This history considers earnings in recent years from the discontinued operations of Granville-Phillips, which was divested during the fiscal year 2014maintained such allowance at June 30, 2017 and freed up capital for investments in strategic growth businesses. In evaluating the historical results of the continuing businesses, the Company has not yet demonstrated profitability with losses in recent periods. The Company reported U.S. pre-tax losses during fiscal year 2015 and the first two quarters of fiscal year 2016. The loss in the second quarter of fiscal year 2016 included a significant charge for restructuring actions which are ultimately expected to improve future profitability. However, because of the restructuring charges and loss in the second quarter of fiscal year 2016, the Company now projects a net loss for the full fiscal year 2016. These factors presented significant negative evidence in the evaluation.

The Company also considered positive evidence such as expected improvements that are the results of investments in growth businesses. The Company prepares comprehensive forecasts based on the cyclical trends of the semiconductor industry, expected capital spending in the industry and demand for new product offerings. The Company's forecast of future improved profits includes a portion related to foreign operations, specifically in the Contamination Control Solutions business, which are excluded from the evaluation of U.S. deferred tax assets. The forecast of future improved profits also includes a portion related to U.S. operations. The Brooks Life Science Systems segment has driven cumulative losses in the U.S. in the past years, but is expected to provide growth in revenue and improved profitability resulting in increased profits in the U.S. After extensive review, despite significant projected improvements, the forecasted income is not considered to be objectively verifiable evidence because the revenue growth expected for the future periods is based on projections and not significantly supported by specific bookings and backlog of orders for product in place as of the end of the quarter. The evidence is therefore considered more subjective than objective under the accounting rules. Accordingly, this positive evidence is given less weight than the negative evidence discussed above.

A cumulative loss is difficult negative evidence to overcome on a more likely than not basis. Future income projections can only overcome this negative evidence if the projections are considered objectively verifiable. Since the income projections are not considered objectively verifiable, the Company determined that realization of the U.S. net deferred tax assets should not be viewed as more likely than not until the projected profits are supported with objectively verifiable evidence of the improvements. As a result of this change in assessment, the Company recorded a tax provision of $79.3 million to establish the valuation allowance against U.S. net deferred tax assets during the second quarter of fiscal year 2016. The Company will continue to maintain ~~a full valuation allowance on our U.S. deferred tax assets~~it until there is sufficient positive evidence to support the reversal of all or some portion of these allowances.

Please refer to Note 12, "Income Taxes" to the Company’s consolidated financial statements included in the 2016 Annual Report on Form 10‑K for further information on the valuation allowance.

The Company is subject to U.S. federal income tax and various state, local and international income taxes in various jurisdictions. The amount of income taxes paid is subject to the ~~Company's~~Company’s interpretation of applicable tax laws in the jurisdictions in which it files tax returns. In the normal course of business, the Company is subject to ~~examination by taxing authorities throughout the world. The Company has~~ income tax audits in ~~progress in~~ various global jurisdictions in which it operates. The years subject to examination vary for the U.S. and international

Table of Contents

jurisdictions, with the earliest tax year being ~~2009. It~~2010. Based on the outcome of these examinations or the expiration of statutes of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the ~~Company's~~Company’s unaudited Consolidated Balance ~~Sheets based on the outcome of these examinations or the expiration of statutes of limitations for specific jurisdictions.~~Sheets. The Company currently anticipates that it is reasonably possible that the unrecognized tax benefits will be reduced by approximately ~~$1.2~~$0.5 million within the next twelve ~~months as a result of the lapse of statutes of limitations in multiple jurisdictions.~~

~~10.~~months.

9. Other Balance Sheet Information

The following is a summary of accounts receivable at June 30, ~~2016~~2017 and September 30, ~~2015~~2016 (in thousands):


	June 30,		September 30,
	2017		2016
Accounts receivable	$	122,394	$	108,713
Less allowance for doubtful accounts		(1,514)		(2,241)
Less allowance for sales returns		(128)		(100)
Accounts receivable, net	$	120,752	$	106,372

June 30,
2016 September 30,
2015
Accounts receivable $ 103,396
$ 87,582
Less: allowance for doubtful accounts (2,200 ) (1,019 )
Less: allowance for sales returns (105 ) (115 )
Accounts receivable, net $ 101,091
$ 86,448

~~Table of Contents~~

The following is a summary of inventories at June 30, ~~2016~~2017 and September 30, ~~2015~~2016 (in thousands):


	June 30,		September 30,
	2017		2016
Inventories
Raw materials and purchased parts	$	72,820	$	60,979
Work-in-process		11,273		16,090
Finished goods		21,211		15,503
Total inventories	$	105,304	$	92,572

June 30,
2016 September 30,
2015
Inventories:
Raw materials and purchased parts $ 60,883
$ 62,441
Work-in-process 16,488
21,563
Finished goods 20,786
16,615
Total inventories $ 98,157
$ 100,619

Reserves for excess and obsolete inventory were ~~$24.9~~$23.9 million and ~~$23.8~~$24.8 million, respectively, at June 30, ~~2016~~2017 and September 30, ~~2015, respectively.~~

~~As of~~2016.

During the nine months ended June 30, ~~2016~~2017 and the fiscal year ended September 30, ~~2015,~~2016, the ~~building and the underlying land located in Oberdiessbach, Switzerland were presented at fair value~~Company had cumulative capitalized direct costs of ~~$2.8~~$4.4 million and ~~$2.9~~$3.7 million, respectively, ~~as "Assets Held~~associated with development of software for ~~Sale"~~its internal use which are included within "Property, plant and equipment, net" in the accompanying unaudited Consolidated Balance Sheets. The Company determined the fair value of the assets held for sale based on indication of value resulting from marketing the building and the land to prospective buyers. Please refer to Note 18, "Fair Value Measurements" for further information on such measurements. During the ~~three~~nine months ended June 30, ~~2016,~~2017, the Company ~~entered into a binding agreement~~capitalized direct costs of $0.8 million associated with ~~an unrelated third party to sell both the building and the underlying land in Oberdiessbach, Switzerland~~development of software for ~~a total price~~its internal use.

Deferred financing costs of ~~$2.8~~$0.6 million and ~~remeasured~~$0.7 million, respectively, at June 30, 2017 and September 30, 2016 are associated with obtaining the ~~fair value~~line of credit financing and presented within "Other assets" in the ~~assets held for sale. The corresponding impact of this remeasurement on the Company's results of operations~~accompanying unaudited Consolidated Balance Sheets. Amortization expense incurred during the three and nine months ended June 30, 2017 was less than $0.1 million and $0.1 million, respectively, and included in interest expense in the accompanying unaudited Consolidated Statements of Operations. Such expenses were insiginficant during the three and nine months ended June 30, 2016. Please refer to Note 7, “Line of Credit” for further information on this arrangement.

A note receivable of $0.2 million at June 30, 2017 and September 30, 2016 is recorded at carrying value and included in "Other assets" in the accompanying unaudited Consolidated Balance Sheets. The note had an initial value of $3.0 million and a stated interest rate of 9% upon its origination in fiscal year 2012 and was ~~insignificant.~~ provided by the Company to a strategic partner (the “Borrower”) to support its future product development and other working capital requirements. Prior to fiscal year 2017, the Company amended the terms of the note due to the subordination of its security interest in the assets of the Borrower to the new lender and recognized cumulative impairment charges of $3.4 million as a result of making a determination that a recovery of all amounts due from the loan was not probable. No triggering events indicating additional impairment of the note receivable occurred during the three and nine months ended June 30, 2017. Please refer to Note 9, "Loan Receivable" to the Company’s consolidated financial statements included in the 2016 Annual Report on Form 10‑K for further information on the loan.

Table of Contents

The ~~sale~~Company determined that the Borrower represented a variable interest entity since the level of equity investment at risk was ~~completed~~not sufficient for the entity to finance its activities without additional financial support. However, the Company did not qualify as the primary beneficiary since it would not absorb the majority of the expected losses from the Borrower and did not have the power to direct the Borrower’s product research, development and marketing activities that have the most significant impact on ~~July 1, 2016.~~

its economic performance. The Company has no future contractual funding commitments to the Borrower and, as a result, the Company’s exposure to loss is limited to the outstanding principal and interest due on the loan. During the nine months ended June 30, 2017, the Company adopted the Accounting Standards Update 2015‑02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, and concluded that it does not qualify as the primary beneficiary since it doesn’t have the power to direct the Borrower’s activities that most significantly impact its economic performance. The adoption of the guidance did not have an impact on the Company’s financial position and the results of operations since it concluded that it does not have a controlling financial interest in Borrower .

The Company establishes reserves for estimated cost of product warranties based on historical information. Product warranty reserves are recorded at the time product revenue is recognized, and retrofit accruals are recorded at the time retrofit programs are established. The Company’s warranty obligation is affected by product failure rates, utilization levels, material usage, service delivery costs incurred in correcting a product failure and supplier warranties on parts delivered to the Company.

The following is a summary of product warranty and retrofit activity on a gross basis for the three and nine months ended June 30, ~~2016~~2017 and ~~2015~~2016 (in thousands):


Activity -Three Months Ended June 30, 2017
Balance						Balance
March 31,						June 30,
2017		Accruals		Costs Incurred		2017
$	7,073	$	2,440	$	(1,867)	$	7,646


Activity -Three Months Ended June 30, 2016
Balance						Balance
March 31,						June 30,
2016		Accruals		Costs Incurred		2016
$	5,735	$	2,279	$	(2,059)	$	5,955


Activity -Nine Months Ended June 30, 2017
Balance						Balance
September 30,						June 30,
2016		Accruals		Costs Incurred		2017
$	6,324	$	7,656	$	(6,334)	$	7,646


Activity -Nine Months Ended June 30, 2016
Balance						Balance
September 30,						June 30,
2015		Accruals		Costs Incurred		2016
$	6,089	$	6,989	$	(7,123)	$	5,955

Activity - Three Months Ended June 30, 2016
Balance at
March 31,
2016 Accruals Costs Incurred Balance at
June 30,
2016
$ 5,735
$ 2,279
$ (2,059 ) $ 5,955

Activity - Three Months Ended June 30, 2015
Balance at
March 31,
2015 Accruals Costs Incurred Balance at
June 30,
2015
$ 6,203
$ 2,725
$ (2,744 ) $ 6,184

Activity - Nine Months Ended June 30, 2016
Balance at
September 30,
2015 Accruals Costs Incurred Balance at
June 30,
2016
$ 6,089
$ 6,989
$ (7,123 ) $ 5,955

Activity - Nine Months Ended June 30, 2015
Balance at
September 30,
2014 Adjustments for
Acquisitions and Divestitures Accruals Costs Incurred Balance at
June 30,
2015
$ 6,499
$ 81
$ 7,870
$ (8,266 ) $ 6,184

~~Table of Contents~~

~~11.~~

10. Derivative Instruments

The Company has transactions and balances denominated in currencies other than the U.S. dollar. Most of these transactions or balances are denominated in Euros, British Pounds and a variety of Asian currencies. These transactions and balances, including short-term advances between the Company and its subsidiaries, subject the ~~Company's~~Company’s operations to exposure from exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. The Company mitigates the impact of potential currency transaction gains and losses on short-term intercompany advances through timely settlement of each transaction, generally within 30 days.

Table of Contents

The Company also enters into foreign exchange contracts to reduce its exposure to currency fluctuations. Under forward contract arrangements, the Company typically agrees to purchase a fixed amount of U.S. dollars in exchange for a fixed amount of a foreign currency on specified dates with maturities of three months or less. These transactions do not qualify for hedge accounting. Net gains and losses related to these contracts are recorded as a component of "Other ~~(loss) income,~~loss, net" in the accompanying unaudited Consolidated Statements of Operations and are as follows for the three and nine months ended June 30, ~~2016~~2017 and ~~2015~~2016 (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Realized gains (losses) on derivatives not designated as hedging instruments	$	147	$	233	$	(450)	$	1,230

Three Months Ended
June 30, Nine Months Ended
June 30,
2016 2015 2016 2015
Realized gains on derivative instruments not designated as hedging instruments $ 233
$ 90
$ 1,230
$ 516

~~Table of Contents~~

The Company had the following notional amounts outstanding under foreign currency contracts that do not qualify for hedge accounting at June 30, ~~2016~~2017 and September 30, ~~2015~~2016 (in thousands):


June 30, 2017:
	Notional Amount			Notional Amount	Fair Value of		Fair Value of
Buy Currency	of Buy Currency	Sell Currency	Maturity	of Sell Currency	Assets		Liabilities
Japanese Yen	445,000	U.S. Dollar	July 2017	3,980	$	—	$	(13)
British Pound	1,470	U.S. Dollar	July 2017	1,906		—		(16)
Korean Won	4,193,000	U.S. Dollar	July 2017	3,679		—		(10)
U.S. Dollar	5,860	Chinese Yuan	July 2017	40,000		—		(20)
Euro	11,600	U.S. Dollar	July 2017	13,229		—		(53)
British Pound	164	Norwegian Krone	July 2017	1,800		2		—
Singapore Dollar	620	U.S. Dollar	July 2017	449		—		(1)
U.S. Dollar	213	Israeli Shekel	July 2017	748		1		—
Euro	18,513	British Pound	July 2017	16,280		99		—
					$	102	$	(113)

~~June 30, 2016:~~


September 30, 2016:
	Notional Amount			Notional Amount	Fair Value of		Fair Value of
Buy Currency	of Buy Currency	Sell Currency	Maturity	of Sell Currency	Assets		Liabilities
British Pound	190	Swedish Krona	October 2016	2,100	$	1	$	—
Japanese Yen	124,000	U.S. Dollar	October 2016	1,229		—		—
U.S. Dollar	6,107	British Pound	October 2016	4,710		2		—
Euro	13,300	U.S. Dollar	October 2016	14,976		—		(40)
U.S. Dollar	5,815	Chinese Yuan	October 2016	39,000		—		(33)
Korean Won	2,488,000	U.S. Dollar	October 2016	2,255		1		—
Euro	7,482	British Pound	October 2016	6,500		—		(23)
U.S. Dollar	311	Israeli Shekel	October 2016	1,169		1		—
Singapore Dollar	360	U.S. Dollar	October 2016	265		—		—
U.S. Dollar	210	Taiwanese Dollar	October 2016	6,600		—		—
British Pound	171	Norwegian Krone	October 2016	1,800		—		—
					$	5	$	(96)

Buy Currency Notional Amount
of Buy Currency Sell Currency Maturity Notional Amount
of Sell Currency Fair Value of
Assets Fair Value of
Liabilities
British Pound 210
Norwegian Krone July 2016 1,800
—
(1 )
Japanese Yen 959
U.S. Dollar July 2016 98,000
3
—
British Pound 212
Swedish Krona July 2016 1,800
1
—
Korean Won 2,298
U.S. Dollar July 2016 2,705,000
—
(19 )
British Pound 1,560
Euro July 2016 1,400
17
—
U.S. Dollar 427
Taiwan Dollar July 2016 13,900
—
(1 )
U.S. Dollar 5,801
Chinese Yuan July 2016 39,000
—
(67 )
Euro 6,638
U.S. Dollar July 2016 6,000
—
(26 )
U.S. Dollar 11,729
British Pound July 2016 8,880
—
(89 )
Singapore Dollar 1,043
U.S. Dollar July 2016 1,420
1
—
U.S. Dollar 460
Israeli Shekel July 2016 1,797
—
(1 )
22
(204 )

~~September 30, 2015:~~

Buy Currency Notional Amount
of Buy Currency Sell Currency Maturity Notional Amount
of Sell Currency Fair Value of
Assets Fair Value of
Liabilities
U.S. Dollar 1,543
Korean Won October 2015 1,852,000
$ —
$ (6 )
British Pound 2,157
Euro October 2015 1,600
—
(29 )
U.S. Dollar 662
Taiwan Dollar October 2015 22,000
—
(1 )
U.S. Dollar 4,308
British Pound October 2015 6,520
32
—
Euro 9,300
U.S. Dollar October 2015 8,253
40
—
U.S. Dollar 5,177
Chinese Yuan October 2015 33,000
15
—
U.S. Dollar 425
Japanese Yen October 2015 51,000
—
—
U.S. Dollar 1,336
Japanese Yen December 2015 160,000
2
—
U.S. Dollar 457
Israeli Shekel October 2015 1,800
—
—
$ 89
$ (36 )

The fair values of the forward contracts described above are recorded in the ~~Company's~~Company’s accompanying unaudited Consolidated Balance Sheets as "Prepaid expenses and other current assets" and "Accrued expenses and other current liabilities".

Stock Warrant

The stock warrant was less than $0.1 million at September 30, 2016. The BioCision warrant agreement ~~contains~~contained net share settlement provisions, which ~~permit~~permitted the Company to pay the warrant exercise price using shares issuable

Table of Contents

under the warrant (“cashless exercise”). The value of the stock warrant ~~fluctuates~~fluctuated primarily in relation to the value of ~~BioCision's~~BioCision’s underlying securities, either providing an appreciation in value or potentially expiring with no value. Gains and losses on the revaluation of the stock warrant ~~are~~were recognized as a component of "Other ~~(loss) income,~~loss, net" in the accompanying unaudited Consolidated Statements of Operations.

During the first quarter of fiscal year 2017, the Company canceled the stock warrant as a portion of the non-cash consideration transferred for the acquisition of Cool Lab, which was measured at fair value on the acquisition date. There were no stock warrants held by the Company at June 30, 2017. Please refer to Note 184, "Acquisitions"; Note 6, "Equity Method Investments" and Note 17 “Fair Value Measurements” for further information ~~regarding~~on the ~~fair value~~acquisition of Cool Lab and the stock warrant.

~~12.~~

11. Stock-Based Compensation

The Company may issue restricted stock units and restricted stock awards (collectively "restricted stock units") and stock options which vest upon the satisfaction of a performance condition and/or a service condition. In addition, the Company issues shares to participating employees pursuant to an employee stock purchase ~~plan.~~

plan and unrestricted stock awards to its directors in accordance with its director compensation program.

The following table reflects stock-based compensation expense recorded during the three and nine months ended June 30, ~~2016~~2017 and ~~2015~~2016 (in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,
	2017		2016		2017		2016
Restricted stock	$	4,044	$	1,501	$	10,634	$	7,801
Employee stock purchase plan		153		136		447		405
Total stock-based compensation expense	$	4,197	$	1,637	$	11,081	$	8,206

~~Table of Contents~~

Three Months Ended
June 30, Nine Months Ended
June 30,
2016 2015 2016 2015
Restricted stock units $ 1,501
$ 2,289
$ 7,801
$ 9,173
Employee stock purchase plan 136
113
405
337
Total stock-based compensation $ 1,637
$ 2,402
$ 8,206
$ 9,510

The fair value of restricted stock units is determined based on the number of shares granted and the closing price of the ~~Company's~~Company’s common stock quoted on NASDAQ on the date of grant. The Company recognizes stock-based compensation expense on a straight-line basis, net of estimated forfeitures, over the requisite service period. Additionally, the Company assesses the likelihood of achieving the performance goals against previously established performance targets in accordance with the ~~Company's~~Company’s long-term equity incentive plan for stock-based awards that vest upon or after the satisfaction of these goals.

The Company grants restricted stock units that vest over a required service period ~~and /or~~and/or achievement of certain operating performance goals. Restricted stock units granted with performance goals may also have a required service period following the achievement of all or a portion of the goals. The following table reflects restricted stock units granted during the nine months ended June 30, ~~2016~~2017 and ~~2015:~~2016:


		Time-Based		Performance-
	Total Units	Units	Stock Grants	Based Units
Nine months ended June 30, 2017	1,008,570	377,213	43,019	588,338
Nine months ended June 30, 2016	1,679,591	734,250	85,091	860,250

Total Units Time-Based Units Stock Grants Performance-Based Units
Nine months ended June 30, 2016 1,679,591
734,250
85,091
860,250
Nine months ended June 30, 2015 1,484,781
568,750
69,281
846,750

Time-Based Grants

Restricted stock units granted with a required service period typically have three year vesting schedules in which one-third of awards vest at the first anniversary of the grant date, one-third vest at the second anniversary of the grant date and one-third vest at the third anniversary of the grant date, subject to the award holders meeting service requirements.

Table of Contents

Stock Grants

During the nine months ended June 30, ~~2016~~2017 and ~~2015,~~2016, the Company granted ~~85,091~~43,019 and ~~69,281~~85,091 units to the members of the ~~Company's~~Company’s Board of Directors, including compensation-related ~~restricted stock~~ units of 28,065 and 55,380, ~~and 49,267,~~ respectively. Compensation-related units granted during the nine months ended June 30, 2017 are subject to a one-year vesting period starting from the grant date. The units will vest on the date which is one day before the Company’s 2018 Annual Meeting of Stockholders. Compensation-related units granted during the nine months ended June 30, 2016 vested on the grant date upon their issuance. Certain members of ~~its~~the Board of Directors previously elected to defer receiving their annual awards of ~~unrestricted~~restricted shares of the Company stock and quarterly dividends until a future date. During the nine months ended June 30, ~~2016~~2017 and ~~2015,~~2016, the Company ~~issued~~granted 13,065 and 25,560 ~~and 13,318~~ units, respectively, related to such deferred annual restricted share ~~awards. During~~awards, as well as 1,889 and 4,151 units, respectively, related to deferred quarterly dividends. Annual restricted share awards granted during the nine months ended June 30, ~~2016 and 2015,~~2017 are subject to a one-year vesting period starting from the ~~Company issued 4,151 and 6,876~~grant date. The units ~~respectively, related to deferred quarterly dividends in an amount equal to the value of cash dividends that would be paid~~will vest on the ~~number of deferred shares based on the closing price of~~date which is one day before the Company’s ~~stock on each dividend record date. These units vested upon issuance,~~2018 Annual Meeting of Stockholders, but certain holders have elected to defer the receipt of the Company shares ~~is deferred~~ until ~~the holders~~they attain a certain age or cease to provide services to the Company in their capacity as Board members.

Annual restricted share awards granted during the nine months ended June 30, 2016 vested on the grant date upon their issuance, but the settlement was deferred by certain holders, for the same conditions as described above for grants in fiscal year 2017. The amount of deferred dividends granted during the nine months ended June 30, 2017 and 2016 was equal to the value of cash dividends that would be paid on the number of total deferred shares based on the closing price of the Company’s stock on the dividend record date. Such units vested upon their issuance, but the settlement was deferred by certain holders for the same conditions, as described above.

Performance-Based Grants

Performance-based restricted stock units are earned based on the achievement of performance criteria established by the Human Resources and Compensation Committee of the Board of Directors. The criteria for performance-based awards are weighted and have threshold, target and maximum performance goals.

Performance-based awards granted in fiscal year ~~2016~~2017 allow participants to earn 100% of a targeted number of restricted stock units if the Company’s performance meets its target for each applicable financial metric, and up to a maximum of 200% of the restricted stock units if the Company’s performance for such metrics meets the maximum threshold. Performance below the minimum threshold for each financial metric results in award forfeitures. Performance goals will be measured over a three year period at the end of fiscal year ~~2018~~2019 to determine the number of units earned by recipients ~~that~~who continue to meet a service requirement. Units held by recipients ~~that~~who fail to meet the continued service requirement are forfeited. Earned units for recipients ~~that~~who continue to meet the service requirements vest on the date the Company’s Board of Directors determines the number of units earned, which will be approximately the third anniversary of the grant date.

Performance-based awards granted in fiscal year ~~2015~~2016 also include provisions ~~similar to fiscal 2016 awards~~ that allow participants to earn threshold, target and maximum awards ranging from 0% of the award for performance below the minimum threshold, 100% of the award for performance at target, and up to a maximum of 200% of the award if the Company achieves the maximum performance goals.

~~Sixty percent of the performance-based units granted in fiscal year 2015 had certain performance goals that were measured~~

Table of Contents

at the end of fiscal year 2015 to determine the number of earned units eligible for subsequent vesting. The Company performed below the target levels relative to the performance criteria for these awards and as a result these awards were not eligible for subsequent vesting, which resulted in a forfeiture of 495,684 units.

Forty percent of the performance-based units granted in fiscal year 2015 have performance goals which will be measured over a three year period at the end of fiscal year 2017 to determine the number of earned units eligible for vesting. Earned units vest on the third anniversary of the grant date, subject to award holders satisfying the service requirements. 351,066 units, or 40%, of performance-based awards granted in fiscal year 2015 are eligible for vesting. The total number of performance-based units to be earned by the participants will be based on the achievement against the Company's performance targets. The vesting of the units is subject to award holders satisfying the service requirements.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the nine months ended June 30, ~~2016:~~2017:


		Weighted
		Average
		Grant-Date
	Shares	Fair Value
Outstanding at September 30, 2016	2,489,076	$	10.79
Granted	1,008,570		14.32
Vested	(911,738)		10.51
Forfeited	(79,699)		11.66
Outstanding at June 30, 2017	2,506,209	$	12.52

Shares Weighted
Average
Grant-Date
Fair Value
Outstanding at September 30, 2015 3,257,413
$ 9.95
Granted 1,679,591
10.84
Vested (1,267,862 ) 9.52
Forfeited (1,153,892 ) 11.26
Outstanding at June 30, 2016 2,515,250
$ 10.75

The weighted average grant date fair value of restricted stock units granted during the three months ended June 30, 2017 and 2016 was $25.21 and ~~2015 was~~ $9.58, ~~and $10.97,~~ respectively. The weighted average grant date fair value of restricted stock units granted during the nine months ended June 30, 2017 and 2016 was $14.32 and ~~2015 was~~ $10.84, ~~and $11.93,~~ respectively. The fair value of restricted stock units vested during the three months ended June 30, 2017 and 2016 ~~and 2015~~ was ~~$0.3~~$2.9 million and ~~$0.2~~$0.3 million, respectively. The fair value of restricted stock units vested during the nine months ended June 30, 2017 and 2016 was $14.8 million and ~~2015 was~~ $14.3 million, respectively. During the nine months ended June 30, 2017 and ~~$8.0~~2016, the Company remitted $4.6 million ~~respectively. The Company paid~~and $4.4 million, ~~and $2.3 million~~respectively, for withholding taxes on vested restricted stock units, ~~during~~of which $0.1 million and $4.3 million, respectively, was paid by the Company. During the nine months ended June 30, 2017 and 2016, the Company received $4.6 million and ~~2015, respectively. Additionally, 1,153,892 shares of restricted stock units were forfeited during the nine months ended June 30, 2016 primarily due~~$0.1 million, respectively, in cash proceeds from employees to ~~the failure to achieve certain performance thresholds for performance-based restricted stock units and~~satisfy their tax obligations as a result of ~~the restructuring action initiated during the second quarter of fiscal year 2016. Please refer to Note 14, "Restructuring and Other Charges" for further information on the restructuring action.~~

share issuances.

As of June 30, ~~2016,~~2017, the unrecognized compensation cost related to restricted stock units that are expected to vest is ~~$15.4~~$20.5 million and will be recognized over an estimated weighted average service period of approximately ~~1.8~~1.7 years.

Employee Stock Purchase Plan

The Company maintains an Employee Stock Purchase Plan that allows its employees to purchase shares of common stock at a price equal to 85% of the fair market value of the ~~Company's~~Company’s stock at the beginning or the end of the semi-annual period, whichever is lower. During the three and nine months ended June 30, ~~2016,~~2017, the Company issued ~~118,548~~90,681 shares under the employee stock purchase plan for ~~$0.9~~$1.0 million. The Company issued ~~96,415~~118,548 shares under the employee stock purchase plan for $0.9 million during the corresponding periods of the prior fiscal year.

Table of Contents

~~13.~~

12. Earnings per Share

The calculations of basic and diluted net income (loss) per share and basic and diluted weighted average shares outstanding are as follows for the three and nine months ended June 30, ~~2016~~2017 and ~~2015~~2016 (in thousands, except per share data):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Net income (loss)	$	17,350	$	8,564	$	45,226	$	(80,022)

Weighted average common shares outstanding used in computing basic earnings (losses) per share		69,711		68,628		69,496		68,437
Dilutive common stock options and restricted stock units		694		538		702		—
Weighted average common shares outstanding used in computing diluted earnings (losses) per share		70,405		69,166		70,198		68,437

Basic net income (loss) per share	$	0.25	$	0.12	$	0.65	$	(1.17)
Diluted net income (loss) per share	$	0.25	$	0.12	$	0.64	$	(1.17)

Three Months Ended
June 30, Nine Months Ended
June 30,
2016 2015 2016 2015
Net income (loss) $ 8,564
$ 7,681
$ (80,022 ) $ 7,658

Weighted average common shares outstanding used in computing basic earnings (losses) per share 68,628
67,454
68,437
67,321
Dilutive restricted stock units 538
1,117
—
1,199
Weighted average common shares outstanding used in computing diluted earnings (losses) per share 69,166
68,571
68,437
68,520

Basic net income (loss) per share $ 0.12
$ 0.11
$ (1.17 ) $ 0.11
Diluted net income (loss) per share $ 0.12
$ 0.11
$ (1.17 ) $ 0.11

~~Restricted~~

During the three and nine months ended June 30, 2017, there were no antidilutive restricted stock units excluded from the computation of ~~50,000 and 383,000 during~~diluted earnings per share. During the three months ended June 30, 2016, ~~and 2015, respectively, as well as options to purchase approximately 2,000 shares of common stock and~~50,000 restricted stock units ~~of 160,000 during the nine months ended June 30, 2015~~ were excluded from the computation of diluted earnings per share as their effect ~~would be~~was anti-dilutive based on the treasury stock method. ~~Restricted stock units of 991,000 during~~During the nine months ended June 30, 2016, 991,000 shares were excluded from the computation of diluted earnings per share as a result of a net loss incurred during the period. ~~There were no options outstanding as of June 30, 2016 and 2015.~~

~~14.~~

13. Restructuring ~~and Other~~ Charges

Three Months Ended June 30, ~~2016~~

~~The~~2017

During the three months ended June 30, 2017, the Company recorded restructuring charges of ~~$1.0~~$0.8 million related to severance attributable primarily to the Brooks Semiconductor Solutions Group segment. Such costs included $0.6 million of charges related to the actions initiated during fiscal year 2017 and $0.2 million of charges related to the actions initiated prior to fiscal year 2017. During fiscal year 2017, the Company initiated a restructuring action to streamline service operations in order to optimize the cost structure and improve productivity. Total severance costs expected to be incurred in connection with this action are $1.5 million, of which $0.9 million were recognized prior to the third quarter of fiscal year 2017 and $0.6 million were recognized during the three months ended June 30, 2017. This restructuring action has been substantially completed as of June 30, 2017. Accrued restructuring costs related to this action were $0.8 million at June 30, 2017 and are expected to be paid within the next twelve months from cash flows generated from operating activities. Prior to fiscal year 2017, the Company initiated a restructuring action within the Brooks Semiconductor Solutions Group segment to consolidate the Company’s Jena, Germany repair facility into the Chelmsford, Massachusetts repair operation as a part of the Company’s strategy to reduce global footprint and streamline the cost structure. Total severance costs expected to be incurred in connection with this action are $2.5 million, of which: (i) $1.8 million were recognized prior to fiscal year 2017, (ii) $0.5 million were recognized during fiscal year 2017, including $0.2 million during the three months ended June 30, 2017, and (iii) $0.2 million are expected to be recognized in future periods. This restructuring action has been substantially completed as of June 30, 2017. Accrued restructuring costs related to this action were $0.9 million at June 30, 2017 and are expected to be paid within the next twelve months from cash flows generated from operating activities. Please refer to Note 17, "Restructuring and Other Charges" to the Company’s consolidated financial statements included in the 2016 Annual Report on Form 10‑K for further information on this restructuring initiative.

Table of Contents

Nine Months Ended June 30, 2017

During the nine months ended June 30, 2017, the Company recorded restructuring charges of $2.7 million related to severance, ~~costs~~of which $2.2 million were attributable to ~~actions initiated in prior periods and comprised primarily of $0.3~~the Brooks Semiconductor Solutions Group segment, $0.2 million ~~of costs~~were attributable to the Brooks Life Science Systems segment and ~~$0.6~~$0.3 million ~~of costs related~~were attributable to the company-wide restructuring action initiated prior to fiscal year 2017.

The restructuring charges of $2.2 million attributable to the Brooks Semiconductor Solutions Group segment consisted of $1.5 million of charges related to the actions initiated during fiscal year 2017 to streamline service operations, as described above, and $0.7 million of charges related to the actions initiated prior to fiscal year 2017. Restructuring charges of $0.7 million consisted of $0.5 million attributable to the consolidation of the Jena, Germany repair facility into the Chelmsford, Massachusetts repair operation, as described above, and $0.2 million related to the integration of Contact Co., Ltd. ("Contact") after its acquisition by the Company, including the closure and transfer of its Mistelgau, Germany manufacturing operations to a contract manufacturer, and other cost reductions to improve profitability and competitiveness. Total restructuring costs incurred in connection with this action are approximately $3.2 million, of which approximately $3.0 million were recognized prior to fiscal year 2017 and $0.2 million were recognized during the second quarter of fiscal year 2016. The Brooks Life Science Systems actions were primarily related to streamlining the management structure, consolidating positions within the segment due to integration of BioStorage and the closure of the segment’s Spokane, Washington facility in March 2016. Thesenine months ended June 30, 2017. This restructuring ~~actions were~~action was substantially completed as of June 30, ~~2016~~2017 and ~~are~~is not expected to result in any significant additional restructuring charges in future periods. ~~Total severance~~There were no accrued restructuring costs ~~incurred in connection with these actions are $2.8 million, of which $2.4 million was recognized prior~~from this action at June 30, 2017.

Prior to ~~the third quarter of~~ fiscal year ~~2016 and $0.3 million was recognized during the three months ended June 30, 2016. During the second quarter of fiscal year 2016,~~2017, the Company initiated a restructuring action to streamline its business operations as part of a company-wide initiative to improve profitability and competitiveness which is expected to benefit ~~all~~both segments. Total severance costs incurred in connection with this action were ~~$5.9~~$6.1 million, of which ~~$5.2~~$5.8 million ~~was~~were recognized prior to ~~the third quarter of~~ fiscal year ~~2016~~2017 and ~~$0.6~~$0.3 million ~~was~~were recognized during the ~~three~~nine months ended June, 30, ~~2016.~~2017. Severance costs incurred in connection with this action were attributable to the elimination of positions across the Company, including certain senior management positions. This restructuring action was substantially completed as of June 30, 2017 and is not expected to ~~be substantially completed by September 30, 2016 and~~ result in any additional restructuring charges ~~of $0.1 million~~ in future periods.

There were no accrued restructuring costs related to this action at June 30, 2017.

Three Months Ended June 30, 2016

During the three months ended June 30, 2016, the Company recorded restructuring charges of $1.0 million related to severance which were attributable to actions initiated prior to the third quarter of fiscal year 2016. Such charges were comprised of $0.3 million of costs attributable to the Brooks Life Science Systems segment and $0.6 million of costs related to the Company-wide restructuring actions, as described above. The Brooks Life Science Systems restructuring initiatives included several actions that were primarily related to streamlining the segment’s management structure, integrating BioStorage, and the closure of the segment’s Spokane, Washington facility in March 2016. Total severance costs incurred in connection with these initiatives were $2.8 million, of which $2.4 million was recognized prior to the third quarter of fiscal year 2016, and $0.3 million were recognized during the three months ended June 30, 2016. There were no accrued restructuring costs from these initiatives at June 30, 2017.

Nine Months Ended June 30, 2016

~~The~~

During the nine months ended June 30, 2016, the Company recorded restructuring charges of $9.8 million ~~during the nine months ended June 30, 2016~~ related to severance, ~~costs~~ which ~~included~~consisted of $8.5 million of charges related to restructuring actions initiated during the nine months ended June 30, 2016 and $1.2 million of charges related to restructuring actions ~~initiated in~~intiated prior ~~periods.~~

to fiscal year 2016. The ~~Company’s restructuring actions initiated during the nine months ended June 30, 2016 resulted in total~~ charges of $8.5 million ~~which included $5.8~~were comprised primarily of $2.8 million of ~~charges related~~costs attributable to the restructuring ~~action that benefited all segments and $2.8 million of costs attributable to~~initiatives within the Brooks Life Science Systems segment and $5.8 million of costs related to the company-wide restructuring action, as described above. The ~~Company's restructuring actions initiated in prior periods resulted in~~charges of $1.2 million ~~of costs~~were attributable to the Brooks Semiconductor Solutions ~~segment. These restructuring actions were primarily~~Group segment and related to the integration of Contact, as well as ~~the~~ closure and transfer of the Mistelgau, Germany manufacturing operations to a contract ~~manufacturer. These actions were substantially completed~~manufacturer, as ~~of June 30, 2016.~~described above.

Table of Contents

Total severance costs incurred in connection with these actions were $4.8 million, of which $3.6 million was recognized prior to fiscal year 2016 and $1.2 million was recognized during the nine months ended June 30, 2016.

~~Three Months Ended June 30, 2015~~

The Company recorded restructuring charges of $0.4 million during the three months ended June 30, 2015 related to severance costs. Such costs were attributable to Brooks Semiconductor Solutions Group segment for the integration of Dynamic Micro Systems Semiconductor Equipment GmbH, or DMS, with the Company's operations and the transition of manufacturing of certain products from the Company's facility in Mistelgau, Germany to a third party contract manufacturer. Total cumulative severance costs incurred in connection with these restructuring plans were $1.9 million and were substantially completed on December 31, 2015.

~~Nine Months Ended June 30, 2015~~

~~The Company recorded restructuring charges of $3.7 million during the nine months ended June 30, 2015, which included severance costs of $2.5 million and facility-related costs of $1.2 million.~~

Severance costs of $2.5 million were attributable to Brooks Semiconductor Solutions Group segment in connection with the restructuring actions described above. Total cumulative severance costs incurred in connection with these restructuring actions were $4.8 million.

Facility exit costs of $1.2 million attributable to Brooks Semiconductor Solutions Group segment were related to the outsourcing of manufacturing certain of the Company’s line of Polycold cryochillers and compressors within the United States to a third party contract manufacturer. The facility exit costs represented future lease payments and expected operating costs to be paid until the termination of the facility lease. The Company terminated the lease on October 27, 2015 and fully paid the related restructuring liability during the first quarter of fiscal year 2016.

The following is a summary of activity related to the Company’s restructuring ~~and other~~ charges for the three and nine months ended June 30, ~~2016~~2017 and ~~2015~~2016 (in thousands):


	Activity -Three Months Ended June 30, 2017
	Balance						Balance
	March 31,						June 30,
	2017		Expenses		Payments		2017
Total restructuring liabilities related to workforce termination benefits	$	2,044	$	828	$	(1,182)	$	1,690


	Activity -Three Months Ended June 30, 2016
	Balance						Balance
	March 31,						June 30,
	2016		Expenses		Payments		2016
Facility and other contract termination costs	$	96	$	—	$	(96)	$	—
Workforce-related termination benefits		7,293		996		(2,500)		5,789
Total restructuring liabilities	$	7,389	$	996	$	(2,596)	$	5,789


	Activity -Nine Months Ended June 30, 2017
	Balance						Balance
	September 30,						June 30,
	2016		Expenses		Payments		2017
Total restructuring liabilities related to workforce termination benefits	$	5,939	$	2,663	$	(6,912)	$	1,690


	Activity -Nine Months Ended June 30, 2016
	Balance						Balance
	September 30,						June 30,
	2015		Expenses		Payments		2016
Facility and other contract termination costs	$	433	$	25	$	(458)	$	—
Workforce-related termination benefits		1,640		9,782		(5,633)		5,789
Total restructuring liabilities	$	2,073	$	9,807	$	(6,091)	$	5,789

Activity — Three Months Ended June 30, 2016
Balance at
March 31,
2016 Expenses Payments Balance at
June 30,
2016
Facilities and other contract termination costs $ 96
$ —
$ (96 ) $ —
Workforce-related termination benefits 7,293
996
(2,500 ) 5,789
Total restructuring liabilities $ 7,389
$ 996
$ (2,596 ) $ 5,789

Activity — Three Months Ended June 30, 2015
Balance at
March 31,
2015 Expenses Payments Balance at
June 30,
2015
Facilities and other contract termination costs $ 904
$ —
$ (241 ) $ 663
Workforce-related termination benefits 2,393
358
(753 ) 1,998
Total restructuring liabilities $ 3,297
$ 358
$ (994 ) $ 2,661

~~Table of Contents~~

Activity — Nine Months Ended June 30, 2016
Balance at
September 30,
2015 Expenses Payments Balance at
June 30,
2016
Facilities and other contract termination costs $ 433
$ 25
$ (458 ) $ —
Workforce-related termination benefits 1,640
9,782
(5,633 ) 5,789
Total restructuring liabilities $ 2,073
$ 9,807
$ (6,091 ) $ 5,789

Activity — Nine Months Ended June 30, 2015
Balance at
September 30,
2014 Expenses Payments Balance at
June 30,
2015
Facilities and other contract termination costs $ 71
$ 1,205
$ (613 ) $ 663
Workforce-related termination benefits 3,404
2,506
(3,912 ) 1,998
Total restructuring liabilities $ 3,475
$ 3,711
$ (4,525 ) $ 2,661

Accrued restructuring costs of ~~$5.8~~$1.7 million at June 30, ~~2016~~2017 are expected to be paid within the next twelve months.

~~15.~~

14. Employee Benefit Plans

The Company has two active defined benefit pension plans (collectively, the “Plans”). The Plans cover substantially all of the Company’s employees in Switzerland and Taiwan. Retirement benefits are generally earned based on the years of service and the level of compensation during active employment, but the level of benefits varies within the Plans. Eligibility is determined in accordance with local statutory requirements.

Table of Contents

The components of the Company’s net pension cost for the three and nine months ended June 30, ~~2016~~2017 and ~~2015~~2016 are as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Service cost	$	68	$	138	$	202	$	410
Interest cost		7		18		21		54
Amortization of losses		2		4		6		12
Expected return on plan assets		(33)		(41)		(99)		(120)
Net periodic pension cost	$	44	$	119	$	130	$	356

Three Months Ended
June 30, Nine Months Ended
June 30,
2016 2015 2016 2015
Service cost $ 138
$ 122
$ 410
$ 370
Interest cost 18
32
54
96
Amortization of losses 4
—
12
—
Expected return on assets (41 ) (54 ) (120 ) (165 )
Net periodic pension cost $ 119
$ 100
$ 356
$ 301

~~16.~~

15. 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~~Company’s Chief Executive Officer is the ~~Company's~~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~~for the ~~three and nine months~~periods then 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

~~Table of Contents~~

~~the operating segments remained unchanged as a result of the realignment.~~structure. Please refer to Note ~~18,~~20, "Segment and Geographic Information", to the Company’s Consolidated Financial Statements included in the ~~2015~~2016 Annual Report on ~~the~~ Form ~~10-K~~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~~further information 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 salerealignment, operating segments’ description and ~~equity method investments.~~accounting policies.

Table of Contents

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~~2017 and ~~2015~~2016 (in thousands):


	Brooks		Brooks
	Semiconductor		Life Science
	Solutions Group		Systems		Total

Three Months Ended June 30, 2017:
Revenue
Products	$	124,681	$	17,276	$	141,957
Services		20,280		19,480		39,760
Segment revenue	$	144,961	$	36,756	$	181,717
Gross profit	$	58,083	$	13,489	$	71,572
Segment operating income		26,188		1,134		27,322
Depreciation expense		1,192		1,134		2,326

Three Months Ended June 30, 2016:
Revenue
Products	$	99,254	$	12,342	$	111,596
Services		19,179		16,759		35,938
Segment revenue	$	118,433	$	29,101	$	147,534
Gross profit	$	42,904	$	11,259	$	54,163
Segment operating income (loss)		13,119		(736)		12,383
Depreciation expense		1,448		1,018		2,466

Nine Months Ended June 30, 2017:
Revenue
Products	$	349,710	$	46,974	$	396,684
Services		56,532		57,789		114,321
Segment revenue	$	406,242	$	104,763	$	511,005
Gross profit	$	154,877	$	38,162	$	193,039
Segment operating income		63,562		2,535		66,097
Depreciation expense		3,786		3,269		7,055

Nine Months Ended June 30, 2016:
Revenue
Products	$	268,671	$	33,567	$	302,238
Services		57,657		42,875		100,532
Segment 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
Depreciation expense		3,375		2,452		5,827

Assets:
June 30, 2017	$	330,746	$	262,250	$	592,996
September 30, 2016		317,717		247,735		565,452

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

Table of Contents

The following is a reconciliation of the Company’s operating and reportable ~~segments'~~segments’ operating income ~~(loss)~~ and segment assets to the corresponding amounts presented in the accompanying unaudited Consolidated Balance Sheets and Consolidated

~~Table of Contents~~

Statements of Operations for the three and nine months ended June 30, ~~2016~~2017 and ~~2015~~2016 (in thousands):


		Three Months Ended			Nine Months Ended
		June 30,			June 30,
	2017		2016		2017		2016
Segment operating income	$	27,322	$	12,383	$	66,097	$	15,162
Amortization of acquired intangible assets		3,278		2,754		9,636		8,056
Restructuring charges		828		996		2,663		9,807
Other unallocated corporate expenses		4,446		139		7,066		3,464
Total operating income (loss)	$	18,770	$	8,494	$	46,732	$	(6,165)


	June 30,		September 30,
	2017		2016
Segment assets	$	592,996	$	565,452
Cash, cash equivalents and marketable securities		119,658		91,221
Deferred tax assets		1,460		1,982
Equity method investments		32,606		27,250
Other unallocated corporate net assets		51		—
Total assets	$	746,771	$	685,905

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

~~17.~~

16. Significant Customers

~~The~~

During the three months ended June 30, 2017 and 2016, the Company had one customer that accounted for 10% or more of its consolidated revenue, at 11% and 10% ~~and 11% during~~, respectively. During each of the ~~three~~nine months ended June 30, 2017 and 2016, ~~and 2015, respectively. The~~the Company had one customer that accounted for 10% ~~or more~~ of its consolidated ~~revenue, at 10% and 12% during the nine months ended June~~revenue. As of September 30, 2016, ~~and 2015, respectively. The~~the Company ~~did not have any customers~~had one customer that accounted for ~~more than 10%~~11% of ~~its accounts receivable balance at~~the Company’s total receivables. There were no such customers as of June 30, ~~2016 or September 30, 2015.~~

2017.

For purposes of determining the percentage of revenue generated from any of the ~~Company's~~Company’s original equipment manufacturer ~~or OEM,~~(the "OEM") customers, the Company does not include revenue from products sold to contract manufacturer customers who in turn sell to the ~~OEM's.~~OEM’s. If the Company included revenue from products sold to contract manufacturer customers supporting the ~~Company's~~Company’s OEM customers, the percentage of the ~~Company's~~Company’s total revenue derived from certain OEM customers would be higher.

~~18.~~

17. Fair Value Measurements

The fair value measurement guidance establishes a fair value hierarchy ~~which~~that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following levels of inputs may be used to measure fair value:

Level 1 Inputs: Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 Inputs: Observable inputs other than prices included in Level 1, including quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 Inputs: Unobservable inputs that are significant to the fair value of the assets or liabilities and reflect an ~~entity's~~entity’s own assumptions in pricing assets or liabilities since they are supported by little or no market activity.

Table of Contents

The following tables summarize assets and liabilities measured and recorded at fair value on a recurring basis in the accompanying unaudited Consolidated Balance Sheets as of June 30, ~~2016~~2017 and September 30, ~~2015~~2016 (in thousands):


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	June 30,		Identical Assets		Observable Inputs		Inputs
Description	2017		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	45	$	—	$	45	$	—
Available-for-sale securities		2,577		—		2,577		—
Foreign exchange contracts		102		—		102		—
Total Assets	$	2,724	$	—	$	2,724	$	—
Liabilities:
Foreign exchange contracts	$	113	$	—	$	113	$	—
Total Liabilities	$	113	$	—	$	113	$	—

Fair Value Measurements at Reporting Date Using
Description June 30, 2016 Quoted Prices in
Active Markets for
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable Inputs
(Level 3)
Assets:
Cash equivalents $ 101
$ 56
$ 45
$ —
Available-for-sale securities 6,086
—
6,086
—
Foreign exchange contracts 22
—
22
—
Convertible debt securities 5,850
—
—
5,850
Stock warrant 47
—
—
47
Total Assets $ 12,106
$ 56
$ 6,153
$ 5,897
Liabilities:
Contingent consideration $ 500
$ —
$ —
$ 500
Foreign exchange contracts 204
—
204
—
Total Liabilities $ 704
$ —
$ 204
$ 500

The convertible debt securities and the stock warrant ~~are~~were included in "Other assets" in the accompanying ~~unaudited~~ Consolidated Balance Sheets ~~as of~~at September 30, 2016. During the nine months ended June 30, ~~2016~~2017, the Company settled the convertible debt securities and ~~September~~the stock warrant as a part of the non-cash consideration for the Company’s acquisition of Cool Lab completed on November 28, 2016. The convertible debt securities and the stock warrant were measured at fair value on the acquisition date as a portion of the consideration transferred to the seller. A loss of $0.2 million on settlement of these financial instruments was recorded in the "Other loss, net" in the Company’s unaudited Consolidated Statements of Operations for the nine months ended June 30, ~~2015.~~2017. Please refer to Note 6, "Equity Method Investments" for further information on the convertible debt securities and the stock ~~warrant.~~warrant and Note 4 "Acquisitions" for the acquisition of Cool Lab.


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	September 30,		Identical Assets		Observable Inputs		Inputs
Description	2016		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	143	$	98	$	45	$	—
Available-for-sale securities		6,135		—		6,135		—
Foreign exchange contracts		5		—		5		—
Convertible debt securities		5,774		—		—		5,774
Stock warrant		45		—		—		45
Total Assets	$	12,102	$	98	$	6,185	$	5,819
Liabilities:
Contingent consideration	$	500	$	—	$	—	$	500
Foreign exchange contracts		97		—		97		—
	$	597	$	—	$	97	$	500

Fair Value Measurements at Reporting Date Using
Description September 30,
2015 Quoted Prices in
Active Markets for
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable Inputs
(Level 3)
Assets:
Cash equivalents $ 11,628
$ 10,133
$ 1,495
$ —
Available-for-sale securities 133,308
—
133,308

—
Foreign exchange contracts 89
—
89
—
Convertible debt securities 5,337
—
—
5,337
Stock warrant 59
—
—
59
Total Assets $ 150,421
$ 10,133
$ 134,892
$ 5,396
Liabilities:
Contingent consideration $ 811
$ —
$ —
$ 811
Foreign exchange contracts 36
—
36
—
Total Liabilities $ 847
$ —
$ 36
$ 811

Cash Equivalents

Cash equivalents of ~~$56,000 and $10.1~~$0.1 million at ~~June~~September 30, 2016 ~~and September 30, 2015, respectively,~~ consist of Money Market Funds and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. Cash equivalents of ~~$45,000 and $1.5~~less than $0.1 million each at June 30, ~~2016~~2017 and September 30, ~~2015 consisted~~2016 consist primarily of Bank Certificate of Deposits and ~~were~~are classified within Level 2 of the fair value hierarchy because they ~~were~~are not actively traded.

Available-For-Sale Securities

Available-for-sale securities of $2.6 million and $6.1 million, ~~and $133.3 million~~respectively, at June 30, ~~2016~~2017 and September 30, ~~2015, respectively,~~2016 consist of Municipal Securities, ~~Bank Certificate of Deposits, Commercial Paper, Mortgage-Backed Securities, as well as~~ U.S. ~~Treasury~~Corporate Securities and ~~Obligations of U.S. Government Agencies.~~Other Debt Securities. The securities are valued using

Table of Contents

matrix pricing and benchmarking and classified within Level 2 of the fair value hierarchy because they are not actively traded. Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices.

~~Table of Contents~~

Foreign Exchange Contracts

Foreign exchange contract assets and liabilities ~~amount~~amounted to ~~$22,000 and $204,000~~$0.1 million each at June 30, ~~2016.~~2017. Foreign exchange contract assets and liabilities ~~amount~~amounted to ~~$89,000~~less than $0.1 million and ~~$36,000,~~$0.1 million, respectively, at September 30, ~~2015.~~2016. Foreign exchange contract assets and liabilities are measured and reported at fair value based on observable market inputs and classified within Level 2 of the fair value hierarchy due to a lack of an active market for these contracts.

Convertible Debt Securities

~~Convertible~~

At September 30, 2016, convertible debt securities of ~~$5.9~~$5.8 million ~~and $5.3 million, respectively,~~were measured at ~~June 30, 2016~~fair value and ~~September 30, 2015 are~~ classified within Level 3 of the fair value ~~hierarchy and~~hierarchy. During the nine months ended June 30, 2017, the Company settled the convertible debt securities as a part of the non-cash consideration for the Company’s acquisition of Cool Lab. The convertible debt securities were measured at fair value of $5.6 million on the acquisition date which was determined based on the ~~probability-weighted expected return~~probability weighted average Discounted Cash Flow (the "DCF") approach and a Monte Carlo simulation model. The DCF approach was utilized for the instrument’s variable conversion price scenarios for which fair value was determined based on probability weighted average method ~~or PWERM,~~ utilizing various ~~scenarios~~outcomes for the instrument’s expected ~~payout of the instrument covering the full range of the potential outcomes.~~payout. The ~~PWERM determines the~~fair value ~~of an asset~~for each outcome was computed based ~~upon an analysis of future values for the subject asset and full range of its potential values. The asset value is based upon~~on the present value of cash flows associated with the ~~probability~~expected payout discounted at the risk-adjusted discount rate. The key inputs used in the DCF approach included a risk-adjusted discount rate of ~~each future outcome becoming available to the asset~~23% and the ~~economic rights~~time of the instrument’s payout, which ranged between 1.5 years and ~~preferences of each asset.~~3.2 years. The ~~Company remeasures~~Monte Carlo simulation model was utilized for the instrument’s fixed conversion price scenarios. The fair value of the instrument was computed for the period from the valuation date through the expected payoff date based on multiple scenarios. The key inputs used in the Monte-Carlo approach consisted of: (i) risk free rate, which was used for the scenarios in which the instrument’s conversion value was greater than its fixed payoff value, and ranged between 0.96% and 1.39%, (ii) risk-adjusted discount rate of 23%, which was used for the scenarios in which the instrument’s conversion value was less than its fixed payoff value, (iii) expected payoff period, which ranged between 1.50 years and 3.06 years, (iv) underlying stock price estimated at $1.76, and (v) underlying stock volatility of 55%, which was calculated based on security-specific volatility. A loss of $0.2 million on the settlement of convertible debt securities ~~at each reporting date and recognizes the corresponding~~with a fair value ~~change related to the underlying inputs in the~~of $5.6 million and a carrying value of $5.8 million on November 28, 2016 was recognized within "Other ~~(loss) income,~~loss, net" in the ~~Company's~~Company’s unaudited Consolidated Statements of ~~Operations.~~

Operations during the nine months ended June 30, 2017. Please refer to Note 6, "Equity Method Investments" for further information on the convertible debt securities and Note 4 "Acquisitions" for the acquisition of Cool Lab.

Stock Warrant

Stock warrant ~~of $47,000 and $59,000~~valued at ~~June 30, 2016 and~~less than $0.1 million at September 30, ~~2015, respectively,~~2016 was classified within Level 3 of the fair value hierarchy and measured at fair value based on the Black-Scholes model. The Black-Scholes model applied to the warrant ~~incorporates~~incorporated the constant price variation of the underlying asset, the time value of money, the warrant’s strike price and the time until the warrant’s expiration date. The fair value of the warrant was determined utilizing a five year equity volatility percentage based on an average equity volatility derived from comparable public companies.

During the first quarter of fiscal year 2017, the Company canceled the stock warrant as part of the non-cash consideration for the Company’s acquisition of Cool Lab and measured the stock warrant at fair value of less than $0.1 million on the acquisition date. The ~~Company remeasures the~~ fair value of the ~~stock~~ warrant ~~at each reporting date and recognizes~~was determined based on the ~~corresponding fair~~option pricing approach that treats various classes of securities in a company’s capital structure as call options on the total equity value ~~change related to~~of the ~~underlying inputs in the "Other (loss) income, net" in the Company's unaudited Consolidated Statements of Operations.~~

company.

Contingent Consideration

Contingent consideration liability of $0.5 million ~~and $0.8 million, respectively,~~ at ~~June~~September 30, 2016 ~~and September 30, 2015 is~~was classified within Level 3 of the fair value hierarchy and measured at fair value based on the probability-weighted average discounted cash flow model

Table of Contents

utilizing potential outcomes related to achievement of certain specified targets and events. The fair value measurement of the contingent consideration iswas based on probabilities assigned to each potential outcome and the discount rate. ~~The~~During the nine months ended June 30, 2017, the Company ~~remeasures~~settled the ~~fair value~~liability and remitted a cash payment of $0.5 million to the sellers of Contact as a remaining part of the contingent consideration at each reporting date and recognizes the corresponding fair value change related to the underlying inputs in the "Selling, general and administrative" expenses in the Company's unaudited Consolidated Statements of Operations.acquisition purchase price. Please refer to Note 4 “Acquisitions” to the Company’s consolidated financial statements included in the 2016 Annual Report on Form 10‑K for further information on the contingent consideration liability.

The carrying amounts of accounts receivable and accounts payable approximate their fair value due to their short-term nature.

The following table presents the reconciliation of the assets and liabilities measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):


	Convertible		Stock		Contingent
	Debt Securities		Warrants		Consideration		Total
Balance at September 30, 2016	$	5,774	$	45	$	500	$	6,319
Change in fair value		(194)		(37)		—		(231)
Settlements		(5,580)		(8)		(500)		(6,088)
Balance at June 30, 2017	$	—	$	—	$	—	$	—

Convertible Debt Securities Stock Warrants Contingent Consideration Total
Balance at September 30, 2015 $ 5,337
$ 59
$ 811
$ 6,207
Change in fair value 513
(12 ) (311 ) 190
Balance at June 30, 2016 $ 5,850
$ 47
$ 500
$ 6,397

Nonrecurring Fair Value Measurements

The Company holds certain assets that are measured at fair value on a nonrecurring basis in periods subsequent to initial recognition.

A note receivable of $0.2 million at each of June 30, ~~2016~~2017 and September 30, 2015, the building and the underlying land located in Oberdiessbach, Switzerland were presented at fair value of $2.8 million and $2.9 million, respectively, as "Assets Held for Sale" in the accompanying unaudited Consolidated Balance Sheets. The Company determined the fair value of the assets held for sale based on indication of value resulting from marketing the building and the land to prospective buyers. During the three months ended June 30, 2016, the Company entered into a binding agreement with an unrelated third party to sell both the building and the underlying land in Oberdiessbach, Switzerland for a total price of $2.8 million and remeasured the fair value of the assets held for sale. The corresponding impact of this remeasurement on the Company's results of operations during the three and nine months

~~Table of Contents~~

ended June 30, 2016 was insignificant. The sale was completed on July 1, 2016. Fair value measurement is classified within Level 3 of the fair value hierarchy since it is based on unobservable inputs. Please refer to Note 10 “Other Balance Sheet Information” for further information on the assets held for sale.

Note receivable of $1.0 million at June 30, 2016 and September 30, 2015 is recorded at carrying value and included in "Other assets" in the accompanying unaudited Consolidated Balance Sheets. Please refer to Note 7, "Note Receivable" for further information on the loan

~~Loan receivable of $1.5 million at June~~ 30, 2016 is recorded at carrying value and included in "Other assets" in the accompanying unaudited Consolidated Balance Sheets. Please refer to Note 9, "Other Balance Sheet Information" for further information on the loan.

A loan receivable of $1.5 million at September 30, 2016 was recorded at carrying value and included in "Other assets" in the accompanying unaudited Consolidated Balance Sheets. During the nine months ended June 30, 2017, the Company settled the loan as part of the non-cash consideration for the Company’s acquisition of Cool Lab and remeasured it at fair value of $1.6 million on the acquisition date. Fair value of the loan was classified within Level 3 of the fair value hierarchy and determined based on the market approach utilizing a loan settlement value, including its principal and accrued interest, in a similar transaction in a non-observable market. The carrying value of the loan was $1.6 million on the acquisition date and included the loan’s principal and accrued interest. Please refer to Note 6, "Equity Method Investments" for further information on the ~~loan.~~

loan and Note 4 "Acquisitions" for the acquisition of Cool Lab.

The equity method investment in BioCision of $1.7 million at September 30, 2016 was recorded at carrying value in the accompanying unaudited Consolidated Balance Sheets. During the nine months ended June 30, 2017, the Company redeemed the equity method investment in BioCision as part of the non-cash consideration for the Company’s acquisition of Cool Lab. Fair value of the equity method investment in BioCision of $3.1 million was classified within Level 3 of the fair value hierarchy and measured based on the option pricing approach which treats various classes of securities in a company’s capital structure as call options on the total equity value of the company. The key inputs used in the option pricing approach consisted of: (i) total equity value of BioCision estimated at $6.5 million; (ii) equity volatility estimated at 80%; (iii) time to liquidity event estimated at 1.5 years; and (iv) risk free rate of 0.96%. Please refer to Note 6, "Equity Method Investments" for further information on the convertible debt securities and Note 4 "Acquisitions" for the acquisition of Cool Lab.

Certain non-financial assets, including goodwill, finite-lived intangible assets and other long-lived assets, are measured at fair value on a non-recurring basis ~~in accordance with the income approach~~ when there is an indication of impairment. Please refer to the ~~2015 Annual Report on the Form 10-K,~~ Note 2, "Summary of Significant Accounting Policies" to the Company’s consolidated financial statements included in the 2016 Annual Report on Form 10‑K for further information on the valuation techniques used in developing these measurements.

~~19.~~

Table of Contents

18. Commitments and Contingencies

Operating Leases

During the nine months ended June 30, 2017, the Company entered into a new lease agreement for the existing 85,000 square feet of space in Indianapolis, Indiana which accommodates its sample storage, sales and support functions for the Brooks Life Science Systems segment. The original lease expires in July 2017. The new lease for such space commences on August 1, 2017 and expires on September 30, 2023. Additionally, the Company executed another new lease agreement for an additional 13,000 square feet of space within the aforementioned facility which commences on March 1, 2019 and expires on September 30, 2023. The new leases may be extended at the Company’s option for three additional terms of five years each subject to the terms and conditions of the lease. The non-cancelable obligations under the new leases total $2.4 million.

Letters of Credit

At June 30, ~~2016~~2017 and September 30, ~~2015,~~2016, the Company had approximately ~~$1.5~~$3.4 million and ~~$3.5~~$2.0 million, respectively, of letters of credit outstanding related primarily to customer advances and other performance obligations. These arrangements guarantee the refund of advance payments received from our customers in the event that the product is not delivered or warranty obligations are not fulfilled in accordance with the contract terms. These obligations could be called by the beneficiaries at any time before the expiration date of the particular letter of credit if the Company fails to meet certain contractual requirements. None of these obligations were called during the nine months ended June 30, ~~2016~~2017 and the fiscal year ended September 30, ~~2015,~~2016, and the Company currently does not anticipate any of these obligations to be called in the near future.

Purchase Commitments

The Company has non-cancellable contracts and purchase orders for inventory of $112.8 million and $101.4 million, respectively, at June 30, 2017 and September 30, 2016.

Contingencies

During fiscal year 2016, the Company discovered that it inadvertently failed to register on Form S‑8 with the Securities and Exchange Commission certain shares of common stock previously authorized for issuance by the Company’s Board of Directors and stockholders under the Company’s 1995 Employee Stock Purchase Plan, as amended (the “ESPP”). As a result, certain purchasers of common stock under the ESPP may have the right to rescind their purchases for an amount equal to the purchase price paid for the shares, plus interest from the date of purchase, limited to the shares purchased in the last twelve months, which is the applicable federal statute of limitations, and still held by the original purchasers. These shares have been treated as issued and outstanding for financial reporting purposes.

As of June 30, 2017, there were approximately 36,531 shares of common stock issued under the ESPP and held by the original purchasers of such shares that may be subject to these rescission rights which expire by statute of limitations on July 31, 2017. The shares were originally purchased for $8.02 per share. If holders of all of these shares seek to rescind their purchases, the Company could be required to make aggregate payments of up to approximately $0.3 million, which includes estimated statutory interest. The Company may also be subject to civil and other penalties by regulatory authorities as a result of the potential failure to register these shares. The Company does not believe that the failure to register the shares on a Form S‑8 or a potential rescission offer, if any, will have a material impact on its consolidated financial statements.

The Company is subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. The Company cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this report, the Company believes that none of these claims will have a material adverse effect on its consolidated financial position or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that the ~~Company's~~Company’s assessment of any claim will reflect the ultimate outcome, and an adverse outcome in

Table of Contents

certain matters could, from time to time, have a material adverse effect on the ~~Company's~~Company’s consolidated financial position or results of operations in particular quarterly or annual periods.

~~20.~~

19. Subsequent Events

On July ~~27,~~5, 2017, the Company entered into an Asset Purchase Agreement with Pacific Bio-Material Management, Inc. (“PBMMI”) and Novare, LLC, a wholly owned subsidiary of PBMMI (collectively, the “Sellers”), pursuant to which the Company acquired substantially all of the assets and liabilities of the Sellers’ business related to providing storage, transportation, management, and cold chain logistics of biological materials. Total cash payment made by the Company was $34.3 million, net of cash acquired, and is subject to working capital adjustments. The acquisition is expected to expand the Company’s existing capabilities with respect to sample management and integrated cold chain storage and transportation solutions within the Brooks Life Science Systems segment. The Company expects to report the results of operations for this acquisition within the results of Brooks Life Science Systems segment starting from the acquisition date.

The Company has not presented a purchase price allocation related to fair values of assets acquired and liabilities assumed, as well as proforma information summary for its consolidated results of operations for the three and nine months ended June 30, 2017 and 2016 as if the acquisition occurred on October 1, 2015 because the initial accounting for the acquisition was incomplete on the financial statements issuance date.

On August 1, 2017, the Company’s Board of Directors declared a cash dividend of $0.10 per share payable on September ~~23, 2016~~29, 2017 to common stockholders of record as of September ~~2, 2016.~~8, 2017. Dividends are declared at the discretion of the Company’s Board of Directors and depend on the ~~Company's~~Company’s actual cash flows from operations, its financial condition and capital requirements and any other factors the Company’s Board of Directors may consider relevant. Future dividend declarations, as well as the record and payment dates for such dividends, will be determined by the Company’s Board of Directors on a quarterly basis.

Table of Contents

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, describes principal factors affecting the results of our operations, financial condition and liquidity, as well as our critical accounting policies and estimates that require significant judgment and thus have the most significant potential impact on our unaudited Consolidated Financial Statements. Our MD&A is organized as follows:

Overview. This section provides a general description of our business and operating segments, as well as a brief discussion and overall analysis of our business and financial performance, including key developments affecting the Company during the three and nine months ended June 30, 2017 and 2016.

Critical Accounting Policies and Estimates. This section discusses accounting policies and estimates that require us to exercise subjective or complex judgments in their application. We believe these accounting policies and estimates are important to understanding the assumptions and judgments incorporated in our reported financial results.

Results of Operations. This section provides an analysis of our financial results for the three and nine months ended June 30, 2017 compared to the three and nine months ended June 30, 2016.

Liquidity and Capital Resources. This section provides an analysis of our liquidity and changes in cash flows, as well as a discussion of available borrowings and contractual commitments.

You should read the MD&A in conjunction with our unaudited Consolidated Financial Statements and related notes beginning on page 3. In addition to historical information, the MD&A contains forward-looking statements that involve risks and uncertainties. You should read “Information Related to Forward-Looking Statements” included below for a discussion of important factors that could cause our actual results to differ materially from our expectations.

Information Related to Forward Looking Statements

This Quarterly Report on Form ~~10-Q~~10‑Q contains statements that are, or may be considered to be, forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “likely” or similar statements or variations of such terms. Forward-looking statements include, but are not limited to, statements that relate to our future revenue, margin, costs, earnings, profitability, product development, demand, acceptance and market share, competitiveness, market opportunities and performance, levels of research and development, ~~or R&D,~~ the success of our marketing, sales and service efforts, outsourced activities, operating expenses, anticipated manufacturing, customer and technical requirements, the ongoing viability of the solutions that we offer and our customers’ success, tax expenses, our management’s plans and objectives for our current and future operations and business focus, our adoption of the newly issued accounting guidance, the levels of customer spending, general economic conditions, the sufficiency of financial resources to support future operations, capital expenditures and future acquisitions. Such statements are based on current expectations and involve risks, uncertainties and other factors which may cause the actual results, our performance or our achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the Risk Factors which are set forth in our ~~2015~~2016 Annual Report on Form ~~10-K~~10‑K for the fiscal year ended September 30, ~~2015~~2016 and which are incorporated herein by reference. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on information currently and reasonably known to us. We do not undertake any obligation to release revisions to these forward-looking statements, which may be made to reflect events or circumstances that occur after the date of this Quarterly Report onin Form ~~10-Q~~10‑Q or to reflect the occurrence or effect of anticipated or unanticipated events. Precautionary statements made herein should be read as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report onin Form ~~10-Q.~~10‑Q. Any additional precautionary statements made in our ~~2015~~2016 Annual Report

Table of Contents

on Form ~~10-K~~10‑K should be read as being applicable to all related forward-looking statements whenever they appear in this Quarterly Report onin Form ~~10-Q.~~

10‑Q.

Unless the context indicates otherwise, references in this Quarterly Report on Form ~~10-Q~~10‑Q to "we", "us", "our" and "the Company" refer to Brooks Automation, Inc. and its subsidiaries.

~~Overview~~

OVERVIEW

We are a leading ~~worldwide~~global provider of automation and cryogenic solutions for multiple ~~markets including~~applications and markets. We primarily serve the semiconductor capital equipment market and the life ~~science biological~~sciences sample management market. We believe our leadership position and ~~storage, and we are~~global support structure in each of these markets makes us a valued business partner to ~~original~~the largest semiconductor capital equipment ~~manufacturers, or OEMs,~~ and ~~equipment users throughout~~device makers and pharmaceutical and life science research institutions in the world. ~~We serve markets in which~~Our offerings are also applied to industrial capital equipment and other adjacent technology markets.

In the semiconductor capital equipment market, equipment productivity and availability are critical factors for our ~~customers’ success,~~customers, who typically inoperate equipment under demanding temperature and/or pressure environments. The demand for semiconductors and semiconductor manufacturing equipment is cyclical, resulting in periodic expansions and contractions of this market. In addition to the semiconductor market, we serve the life sciences, industrial capital equipment and other adjacent technology markets.

~~In the semiconductor capital equipment market, we utilize our capabilities in~~Our automation and cryogenics capabilities are demonstrated in our various robotic automation and cryogenic vacuum pump offerings, both of which are used by semiconductor manufacturers in the ~~wafer~~ processing ~~steps~~ of a semiconductor manufacturer. We expect the semiconductor equipment market to remain a key end market for our products and services as we continue making investments to maintain and grow our semiconductor product and service offerings. A majority of our research and development spending advances our current product lines and drives innovations for new product offerings. We have made numerous acquisitions in past years to support and expand our technology and product offerings for the semiconductor market. In October 2012, we acquired Crossing Automation Inc., or Crossing, a U.S.-based provider of automation solutions and services for semiconductor front-end markets, for $59.0 million. In April 2014, we acquired Dynamic Micro Systems Semiconductor Equipment GmbH, or DMS, for $31.6 million. DMS is a German-based provider of automated contamination control solutions, or CCS, for front opening unified pod, or FOUP, carriers and reticle storage targeted at improving yield of semiconductor processes at semiconductor fabrication plants. In August 2015, we acquired Contact Co., Ltd., or Contact, for $6.8 million, net of cash acquired. Contact is a Japanese-based provider of automated cleaner products for wafer carrier devices used in the global semiconductor markets. This acquisition broadened our CCS product portfolio and added complementary technology to our CCS business unit.

silicon wafers into integrated circuits. In the life sciences sample management market, we utilize our core competencies and capabilities in automation and cryogenics to provide comprehensive bio-sample management ~~solutions.~~solutions to a broad range of end markets within the life sciences industry. Our offerings include automated ultra-cold storage freezers, consumable sample storage containers, instruments ~~which~~that assist in the workflow of sample management and both on-site and off-site full sample management services. ~~We expect~~In recent years, we have made significant investments in research and development and acquisitions to strengthen and grow our product and service offerings for the markets we serve.

Over the past years, acquisitions and our own product development initiatives have enabled us to create a strong capability portfolio to address the sample management needs across multiple end markets within the life sciences ~~sample management market to remain a key end market for our products and services.~~industry. In ~~2011, we first entered the life sciences sample management market through the acquisition of two~~

~~Table of Contents~~

providers of automated ultra-cold sample storage solutions to the life sciences sample management market. The acquisitions provided more than 100 customer relationships with installed freezer systems, consumable storage offerings, instruments to assist in the workflow, services personnel, and an accelerated ability to develop an improved automated platform. In 2013, we launched the Brooks Twinbank platform of automated ultra-cold freezer solutions developed to provide modular, efficient, and flexible solutions for the sample management market. The Company continued to expand offerings and customer relationships in the life sciences sample management market with further acquisitions and organic development of new offerings. In October 2014, we acquired FluidX Ltd., or FluidX, a UK-based provider of biological sample storage tubes and complementary bench-top instruments for $15.5 million, net of cash acquired. On November 30, 2015,fiscal year 2016, we acquired BioStorage Technologies, Inc., or BioStorage, based in Indianapolis, Indiana for a total purchase price of ~~$125.5~~$125.2 million, net of cash acquired. BioStorage is ~~an Indiana-based~~a global provider of comprehensive sample management ~~and integrated~~services, including outsourced storage, cold chain logistics and relocation, bio-processing solutions, ~~for~~project management, consulting and related technology solutions that provide sample intelligence, virtualization, and visualization capabilities through an informatics platform.

Since entering the ~~bioscience industry. These solutions combined with~~life sciences industry, we have also strengthened and broadened our ~~existing offerings, particularly automation for sample storage~~product portfolio and ~~formatting, provide our customers with fully integrated sample management cold chain solutions which will help them increase productivity, efficiencies and speed to market.~~

market reach by investing in internal product development. During fiscal ~~year~~years 2016 and 2015, ~~and 2014, more than~~approximately 25% of our research and development spending was focused on innovating and advancing solutions in the life sciences sample management market. In fiscal year 2014, ~~as a result of our research and development efforts,~~we installed our first ~~modular Twin-bank~~TwinBank platform, ofan internally-developed automated ~~systems~~sample management system designed for ~~compound~~high reliability and ~~biological sample storage for temperatures down to -80 degrees Celsius was installed and operational.~~maximum flexibility. In fiscal year ~~2015,~~2016, we ~~shipped evaluation prototypes of our Biostore~~launched Biostore™ III Cryo, ~~store,~~ an automated ~~ultra-cold~~ system which ~~stores biological samples below -150 degrees Celsius.~~incorporates sample retrieval, archiving, monitoring, tracking, inventory control, and related enterprise systems connectivity with the industry’s leading cryogenic sample storage freezers. We expect to continue investing in research and development and making strategic acquisitions with the objective of expanding our offerings in the life sciences sample management market.

On November 28, 2016, we acquired Cool Lab, LLC, or Cool Lab, a newly established subsidiary of BioCision, LLC, or BioCision, which provides a range of cryogenic solutions that assist in managing the temperature stability of therapeutics, biological samples and related biomaterials in ultra-cold environments. We held an equity interest in BioCision prior to the acquisition and collaborated in the development of advanced solutions in temperature controlled environments. The acquisition of Cool Lab is expected to allow us to extend our comprehensive sample management solutions across the cold chain of custody, which is consistent with the other offerings we bring to our life sciences customers. The aggregate purchase price of $15.2 million consisted of a cash payment of $4.8 million, a liability to the seller of $0.1 million and a non-cash consideration of $10.3 million measured at fair value on the acquisition date. Please refer to Note 17, “Fair Value Measurements” in the Notes to the unaudited Consolidated Financial Statements included

Table of Contents

in Item 1 "Consolidated Financial Statements" of this Form 10‑Q for further information on the valuation techniques and inputs used in fair value measurements of the financial instruments included in the non-cash consideration.

Segments and Reporting Units Realignment

Prior to the third quarter of fiscal year 2016, we had three operating and reportable segments that consisted of Brooks Product Solutions, Brooks Global Services and Brooks Life Science ~~Systems.~~ Systems and six reporting units, including five reporting units that had goodwill. Four reporting units were a part of the Brooks Product Solutions operating segment, and each of the Brooks Global Services segment and Brooks Life Science Systems segment represented a reporting unit.

During the third quarter of fiscal year 2016, we reorganized our previous reporting structure into two operating and reportable segments consisting of: (i) Brooks Semiconductor Solutions Group; and (ii) Brooks Life Science Systems and reported our financial results ~~during~~for the ~~three and nine months~~periods then ended ~~June 30, 2016 and 2015~~ based on the revised segment ~~structure which reflects a change in~~structure. Additionally, we realigned our reporting units into five reporting units, including four reporting units within the manner in which the chief operating decision maker reviews information to assess our performance 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 our profitability and competitiveness. 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 complete in the third quarter of fiscal year 2016~~operating segment and one reporting unit which marked the transition to a new internal management structure at the end of the third quarter of fiscal year 2016. Our prior period reportable segment information has been reclassified to reflect the current segment structure and conform to the current period presentation.

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 products include atmospheric and vacuum robots, robotic modules and tool automation systems that provide precision handling and clean wafer environments, 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~~was Brooks Life Science Systems operating segment, ~~provides automated cold sample management systems~~to reflect the revised reporting structure. We tested goodwill for ~~compound~~impairment before and ~~biological sample storage, equipment~~after the reporting unit realignment and determined that fair value of each reporting unit individually and all five in aggregate exceeded their carrying values. Please refer to Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in the 2016 Annual Report on the Form 10‑K for ~~sample preparation~~further information on the segments and ~~handling, consumables,~~reporting units realignment, as well as operating segments’ description 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, we 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 our 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 operating results of BioStorage are included as a part of the Brooks Life Science Systems segment.

accounting policies. For additional information on segment revenues and their operating results, please refer to Note 1615, “Segment Information” in the Notes to the unaudited ~~consolidated financial statements. Our prior period reportable segment information has been reclassified~~Consolidated Financial Statements included in Item 1, "Consolidated Financial Statements" of this Form 10‑Q.

Business and Financial Performance

Three Months Ended June 30, 2017 Compared to ~~reflect~~Three Months Ended June 30, 2016

Results of Operations- Revenue for the ~~current segment structure and conform~~three months ended June 30, 2017 increased to $181.7 million, or by 23%, as compared to the ~~current~~corresponding period ~~presentation.~~of the prior fiscal year. Gross margin was 39.4% for the third quarter of fiscal year 2017 as compared to 36.7% for the third quarter of fiscal year 2016, which resulted in an increase in gross profit of $17.4 million. Operating expenses were $52.8 million during the third quarter of fiscal year 2017 as compared to $45.7 million during the third quarter of fiscal year 2016, an increase of $7.1 million. Operating income was $18.8 million during the third quarter of fiscal year 2017 as compared to $8.5 million for the corresponding period of the prior fiscal year due to the revenue growth and gross margin improvement, partially offset by an increase in operating expenses. Net income was $17.4 million for the three months ended June 30, 2017 as compared to $8.6 million for the corresponding period of the prior fiscal year. The increase of $8.8 million was primarily attributable to higher operating income of $10.3 million and higher income generated from our equity method investments of $2.2 million, partially offset by higher income tax provision of $3.5 million. Please refer to "Results of Operations" section below for a detailed discussion of our financial results for the three months ended June 30, 2017 compared to the three months ended June 30, 2016.

Nine Months Ended June 30, 2017 Compared to Nine Months Ended June 30, 2016

Results of Operations- revenue for the nine months ended June 30, 2017 increased to $511.0 million, or by 27%, as compared to the corresponding period of the prior fiscal year. Gross margin was 37.8% for the first nine months of fiscal year 2017 as compared to 35.1% for the first nine months of fiscal year 2016, which resulted in an increase in gross profit of $51.5 million. Operating expenses were $146.3 million during the nine months ended June 30, 2017 as compared to $147.7 million during the corresponding period of the prior fiscal year, a reduction of $1.4 million. Operating income was $46.7 million during the first nine months of fiscal year 2017 as compared to an operating loss of $6.2 million during the first nine of fiscal year 2016 due to the revenue growth, gross margin improvement and a reduction in operating expenses. Net income was $45.2 million for the nine months ended June 30, 2017 as compared to a net loss of $(80.0) million for the corresponding period of the prior fiscal year. The increase of $125.2 million was

~~Critical Accounting Policies and Estimates~~

Table of Contents

primarily attributable to lower income tax provision of $65.2 million driven primarily by the change in a valuation allowance against U.S. net deferred tax assets during the nine months ended June 30, 2016, higher operating income of $52.9 million, higher income generated from our equity method investments of $6.0 million, as well as a gain of $1.8 million recognized on the settlement of the equity method investment in BioCision included as a part of the non-cash consideration for an acquisition of Cool Lab. Please refer to "Results of Operations" section below for a detailed discussion of our financial results for the nine months ended June 30, 2017 compared to the nine months ended June 30, 2016.

Cash Flows and Liquidity- Cash and cash equivalents and marketable securities were $119.7 million at June 30, 2017 as compared to $91.2 million at September 30, 2016. The increase in cash and cash equivalents and marketable securities of $28.4 million was primarily attributable to cash inflows of $61.4 million generated from our operating activities, partially offset by cash outflows related to dividend payments of $20.9 million made to our shareholders during the first nine months of fiscal year 2017, cash payments related to acquisitions of $5.3 million which included $4.8 million for the acquisition of Cool Lab and $0.5 million for the settlement of Contact consideration, as well as capital expenditure payments of $6.8 million. Please refer to "Liquidity and Capital Resources" section below for a detailed discussion of our liquidity and changes in cash flows for the nine months ended June 30, 2017 compared to the nine months ended June 30, 2016.

Subsequent to June 30, 2017, we entered into an Asset Purchase Agreement with Pacific Bio-Material Management, Inc. (“PBMMI”) and Novare, LLC, a wholly owned subsidiary of PBMMI (collectively, the “Sellers”), pursuant to which we acquired substantially all of the assets and liabilities of the Sellers’ business related to providing storage, transportation, management, and cold chain logistics of biological materials. For additional information on this transaction, please refer to Note 19, "Subsequent Events" in the Notes to the unaudited Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" of this Form 10‑Q.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our unaudited consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles, or GAAP. The preparation of the interim consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related to revenue, bad debts, inventories, long-lived assets, derivative instruments, intangible assets other than goodwill, goodwill, income taxes, warranty obligations, pensions and stock-based compensation. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances. We evaluate current and anticipated worldwide economic conditions, both in general and specifically in relation to the semiconductor and life science industries, that serve as a basis for making judgments about the carrying values of assets and liabilities that are not readily determinable based on information from other sources. Actual results may differ from these estimates under different assumptions or conditions ~~which~~that could have a material impact on our financial condition and results of operations.

~~Goodwill~~

Prior to the third quarter of fiscal year 2016, we had six reporting units, including five reporting units that had goodwill. Four reporting units were a part of the Brooks Product Solutions operating segment, and each of the Brooks Global Services segment and Brooks Life Science Systems segment represented a reporting unit. During the third quarter of fiscal year 2016, we reorganized our operating and reportable segments into (i) Brooks Semiconductor Solutions Group, or BSSG; and (ii) Brooks Life Science Systems and realigned its reporting units to reflect the revised segment structure. The combination of the Brooks Product Solutions segment and Brooks Global services segment did not have a direct impact on the goodwill at the reporting unit level. As a result of the re-alignment, we had five reporting units, including four reporting units within the Brooks Semiconductor Solutions Group operating segment and one reporting unit which was Brooks Life Science Systems operating segment as of June 30, 2016. Please refer to Note 16, "Segment Information" for additional information on the operating and reporting segments realignment. The revised reporting unit structure reflects the aggregation of two reporting units, Polycold and CTI Cryogenics, into one reporting unit called BSSG Cryogenics, as a result of the reorganization of our internal management structure and the economic similarities that exist between the two reporting units. We tested goodwill for impairment before and after the reporting unit aggregation and determined that fair value of each reporting unit individually and in aggregate exceeded their carrying values. The fair value of the BSSG Cryogenics reporting unit significantly exceeded its carrying value as of June 30, 2016. BSSG Cryogenics goodwill carrying amount was $24.0 million as of June 30, 2016.

We completed our annual goodwill impairment test as of April 1 and determined that no adjustment to goodwill was necessary. Fair values of all of the reporting units, except for Polycold, substantially exceeded their respective carrying values. Fair value of Polycold reporting unit on a standalone basis exceeded its carrying value by 12%. During the second quarter of 2016, we concluded that recent operating trends and declining forecasts for the Polycold reporting unit represented indicators of potential goodwill impairment. As a result, we performed the first step of the quantitative goodwill impairment test as of February 1, 2016 and determined that the fair value exceeded the carrying value by 18%, and that no goodwill impairment existed. We determined Polycold's fair value based on an Income Approach in accordance with the Discounted Cash Flow method, or DCF method, which is based on future cash flow forecasts discounted at a weighted-average cost of capital. Forecasted sales volumes, product costs and the resulting future cash flows used in the valuation of Polycold are driven by various factors, such as customer demand, macroeconomic environment and competitive dynamics, and may impact fair value of Polycold's goodwill. During the three months ended June 30, 2016, we incorporated lower projected future cash flows into the model due to lower forecasted revenue and gross margin in fiscal year 2016 which resulted in a decrease of the excess of Polycold's fair value over its carrying value from 18% during the second quarter of fiscal year 2016 to 12% during the third quarter of fiscal year 2016. The estimated fair value of Polycold's reporting unit assumed a taxable transaction. Polycold's goodwill carrying amount was $24.0 million as of the date of each goodwill impairment assessment.

Application of the goodwill impairment test requires significant judgment based on market and operational conditions at the time of the evaluation, including management's best estimates of the reporting unit's future business activity and the related estimates and assumptions of future cash flows from the assets that include the associated goodwill. Different assumptions of forecasted sales volumes, product costs, future cash flows, risk-adjusted weighted average cost of capital discount rate, as well as long-term growth rate projections used in the DCF model could results in different estimates of the Polycold's fair value as of each testing date. A hypothetical increase of 100 basis points in Polycold's risk-adjusted weighted average cost of capital discount rate would result in a decrease of $3.2 million in the reporting unit's fair value. A hypothetical increase of 126 basis points in Polycold's risk-adjusted weighted average cost of capital discount rate would cause Polycold to fail the first step of the goodwill impairment test. Polycold's goodwill carrying amount was $24.0 million as of the date of each goodwill impairment assessment.

For further information with regard to our significant accounting policies and estimates, please refer to Note 2, "Summary of Significant Accounting Policies" in the Notes to the unaudited Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" of this Form 10‑Q and in the Notes to our ~~unaudited consolidated financial statements~~audited Consolidated Financial Statements included ~~elsewhere~~ in ~~the Quarterly Report of Form 10-Q~~Part II, Item 8 “Financial Statements and Supplementary Data” in our Annual Report on Form ~~10-K for~~10‑K.

Recently Issued Accounting Pronouncements

For a summary of recently issued accounting pronouncements applicable to our unaudited Consolidated Financial Statements, please refer to Note 2, "Summary of Significant Accounting Policies" in the ~~fiscal year ended September 30, 2015.~~Notes to the unaudited Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" on this Form 10‑Q.

Table of Contents

~~Results of Operations~~

RESULTS OF OPERATIONS

Three and Nine Months Ended June 30, ~~2016~~2017 Compared to Three and Nine Months Ended June 30, ~~2015~~

2016

Revenue

We reported revenue of ~~$147.5~~$181.7 million for the three months ended June 30, ~~2016,~~2017, compared to ~~$144.9~~$147.5 million for the corresponding period of the prior fiscal year, an increase of ~~$2.6~~$34.2 million, or 2%23%. We reported revenue of ~~$402.8~~$511.0 million for the nine months ended June 30, ~~2016,~~2017, compared to ~~$406.9~~$402.8 million for the corresponding period of the prior fiscal year, ~~a decrease~~an increase of ~~$4.2~~$108.2 million, or ~~1%%~~27%. ~~For both periods, we~~We reported revenue growth in both the Brooks Semiconductor Solutions Group segment and the Brooks Life Science Systems ~~segment and lower revenue in the Brooks Semiconductor Solutions Group~~ segment. The impact of changes in foreign currency exchange rates adversely affected revenue by ~~$0.6~~$1.1 million and ~~$4.5~~$3.1 million, respectively during the three and nine months ended June 30, ~~2016, respectively,~~2017 when compared to the corresponding periods of the prior fiscal year.

Our Brooks Semiconductor Solutions Group segment reported revenue of ~~$118.4~~$145.0 million for the three months ended June 30, ~~2016~~2017 compared to $128.1 million for the corresponding period of the prior fiscal year. The decrease of $9.7 million during the three months ended June 30, 2016 compared to the corresponding period of the prior fiscal year reflects a decline of $5.9 million in revenue from our robotic automation products, $7.1 million from Cryogenic pump products and $1.4 million in service and repair offerings, partially offset by an increase of $4.8 million in contamination controls systems. For the nine months ended June 30, 2016, the Brooks Semiconductor Solutions Group segment reported revenue of $326.3 million, a decline of $29.6 million from the corresponding period of the prior fiscal year. This decrease reflects lower sales of robotic automation of $15.5 million, cryogenic pumps of $14.0 million , and service and repair of $2.9 million, partially offset by an increase in revenue of $2.8 million in contamination controls systems. These declines include the favorable impact of changes in foreign currency exchange rates of $0.4 million during the three months ended June 30, 2016, and the unfavorable impact of changes in foreign currency exchange rates of $2.5 million during the nine months ended June 30, 2016.

~~Our Brooks Life Science Systems segment reported revenue of $29.1 million for the three months ended June 30, 2016 compared to $16.8~~$118.4 million for the corresponding period of the prior fiscal year. The increase of ~~$12.3~~$26.5 million, ~~was primarily attributable to the $12.4 million of revenue generated from BioStorage, which was acquired on November 30, 2015.~~or 22%, reflects increases in cryogenic pump products, robotic automation products, contamination controls systems and services and related spare parts. Our Brooks ~~Life Science Systems~~Semiconductor Solutions Group segment reported revenue of ~~$76.4~~$406.2 million for the nine months ended June 30, ~~2016, an increase of $25.4~~2017 compared to $326.3 million ~~from~~for the corresponding period of the prior fiscal year. ~~Revenue growth for~~The increase of $79.9 million, or 24%, reflects increases in contamination control systems, cryogenic pump products, and robotic automation products, partially offset by a decline in services and related spare parts. These increases include the ~~nine-month period was driven by the acquisition~~favorable impact of ~~BioStorage, which contributed $30.3 million. Changes~~changes in foreign currency exchange rates ~~had a negative~~of $0.8 million during the nine months ended June 30, 2017. There was no such impact ~~of $1.0 million and $1.9 million on~~during the three months ended June 30, 2017. The revenue ~~of the segment~~in our robotic automation products for the three and nine months ended June 30, 2017 includes increases in ongoing sales of robotic automation products, partially offset by declines of $2.6 million and $7.5 million, respectively, attributable to the expiration of certain patents that we licensed to third parties in exchange for agreed upon royalties and approximately $3.3 million and $12.5 million, respectively, from the exiting of an atmospheric robot distribution arrangement during the fourth quarter of fiscal year 2016 ~~respectively.~~

~~We continue seeking opportunities~~that we determined did not support our strategic objectives. The expiration of patents and the exiting of the robot distribution agreement are expected to ~~expand~~have an impact of approximately $8.7 million and $13.0 million, respectively, on our ~~market share in the semiconductor and adjacent technology markets served by our Brooks~~fiscal year 2017 revenue as compared to fiscal year 2016. The Semiconductor ~~Solutions Group segment. These~~ markets are cyclical, and often fluctuate significantly from quarter to quarter. Demand for our Brooks Semiconductor Solution Group products is affected by these cycles. ~~We anticipate continued growth in revenue from our~~

Our Brooks Life Science Systems segment ~~through our internally-developed products and~~reported revenue of $36.8 million for the three months ended June 30, 2017 compared to $29.1 million for the corresponding period of the prior fiscal year. The increase of $7.7 million, or 26%, was primarily from increases in sample storage services, ~~including our Twin-bank and Biostore III~~growth of automated ~~sample management~~storage systems, and ~~through~~the acquisition of Cool Lab, which contributed revenue of $1.1 million. Our Brooks Life Science Systems segment reported revenue of $104.8 million for the nine months ended June 30, 2017 compared to $76.4 million for the corresponding period of the prior fiscal year. The increase of $28.3 million, or 37%, was primarily from increases in sample storage services, automated storage systems and acquisition of Cool Lab, which contributed revenue of $2.5 million. The growth of our ~~acquired businesses.~~

sample storage services revenue for the nine months ended June 30, 2017 was $15.7 million and reflects two incremental months of revenue amounting to $8.2 million from the acquisition of BioStorage on November 30, 2015. Brooks’ Life Science Systems revenue was adversely affected by foreign currency exchange rates which reduced revenue by $1.1 million and $3.9 million, respectively, during the three and nine months ended June 30, 2017 as compared to the corresponding period of the prior fiscal year.

Revenue generated outside the United States amounted to ~~$96.4~~$111.7 million, or ~~65%~~62% of total revenue, for the three months ended June 30, ~~2016~~2017 compared to ~~$99.6~~$96.4 million, or ~~68%~~65% of total revenue, for the corresponding period of the prior fiscal year. Revenue generated outside the United States amounted to ~~$251.7~~$338.1 million, or ~~63%~~66% of total revenue, for the nine months ended June 30, ~~2016~~2017 compared to ~~$254.7~~$251.7 million, or 63% of total revenue, for the corresponding period of the prior fiscal year.

Table of Contents

Gross Margin

We reported gross margins of ~~36.7%~~39.4% for the three months ended June 30, ~~2016, an improvement~~2017 compared to ~~35.3%~~36.7% for the corresponding period of the prior fiscal year. ~~The increase was attributable to~~Gross margin increased ~~gross margins of~~in the Brooks Semiconductor Solutions Group segment by 3.8 percentage points and declined in the Brooks Life Science Systems segment by ~~10.9~~2.0 percentage points. We reported gross margins of ~~35.1%~~37.8% for the nine months ended June 30, ~~2016,~~2017 compared to ~~33.5%~~35.1% for the corresponding period of the prior fiscal year. ~~The increase was attributable to improvements~~Gross margin increased in ~~gross margins of~~both the Brooks Semiconductor Solutions Group segment and Brooks Life Science Systems segment by 3.0 points and ~~Brooks Semiconductor Solutions Group segments.~~1.1 percentage points, respectively. Cost of revenue for the three and nine months ended June 30, ~~2016~~2017 included $1.1 million and $3.1 million, respectively, of charges ~~respectively,~~ for amortization related to completed technology as compared to ~~$1.3~~$1.1 million and ~~$3.9~~$3.1 million, respectively, incurred during the ~~three and nine months ended June 30, 2015.~~corresponding periods of the prior fiscal year. Cost of revenue for the three and nine months ended June 30, ~~2016~~2017 also included $0.1 million and $0.5 million, respectively, of charges related to the sale of inventory obtained in acquisitions to which a step-up in value was applied in purchase ~~accounting, compared~~accounting. Such charges amounted to ~~$0.0~~$0.1 million and ~~$1.5~~$0.5 million, respectively, for the three and nine months ended June 30, ~~2015, respectively.~~

2016.

Our Brooks Semiconductor Solutions Group segment reported gross margins of ~~36.2%~~40.1% for the three months ended June 30, ~~2016~~2017 as compared to ~~36.3%~~36.2% for the corresponding period of the prior fiscal year. Product margins increased ~~0.7~~2.2 percentage points driven by ~~favorable~~improved operating leverage from higher revenue ~~mix~~ and ~~lower manufacturing and warranty costs,~~the outcome of product cost optimization efforts, partially offset by ~~lower absorption of fixed costs due to the decline in revenue volume.~~adverse mix. Service margins ~~declined 3.3~~increased 11.6 percentage points driven primarily by ~~reduced revenue volumes over~~ lower material costs for pump and robot repair and a ~~fixed~~lower cost ~~base, an adverse mix of services and the impact of changes in foreign currency exchange rates. The change in mix of revenue between products and services was immaterial~~structure due to ~~segment margins.~~

improved field service productivity. Our Brooks Semiconductor Solutions Group segment reported gross margins of ~~35.1%~~38.1% for the nine months ended June 30, ~~2016~~2017 as compared to ~~34.5%~~35.1% for the corresponding period of the prior fiscal year. Product margins increased ~~1.4~~2.1 percentage points ~~during~~driven by improved operating leverage from higher revenue and the ~~nine months ended June 30, 2016 as compared to the corresponding period~~outcome of the prior fiscal year, while service margins declined 2.7 percentage points during the same periods. Product margins benefited from favorable revenue mix and reduced warranty and manufacturing costs. This margin benefit wasproduct cost optimization efforts, partially offset by ~~lower absorption of fixed costs due to a decline in revenue volume and the~~ adverse ~~effect of changes in foreign currency exchange rates.~~mix. Service margins ~~declined due to an adverse mix of services, reduced revenue volumes over a fixed cost base,~~increased 1.7 percentage points driven by lower material costs for pump and ~~the impact of changes in foreign currency exchange rates.~~robot repair as well as higher field service productivity, partially offset by higher excess and obsolescence costs. The change in mix of revenue between products and services was ~~immaterial~~favorable to ~~segment margins.~~this segment’s margins by 1.0 percentage points. Cost of revenue during the three and nine months ended June 30, ~~2016~~2017 included ~~$0.7~~$0.6 million and ~~$2.0~~$1.9 million, respectively, of amortization related to completed technology compared to ~~$0.9~~$0.7 million and ~~$2.7~~$2.0 million, respectively, for the ~~comparable~~corresponding periods of the prior fiscal year. Cost of revenue for the nine months ended June 30, ~~2016~~2017 also included ~~$0.4~~$0.1 million of charges related to the sale of inventories obtained in acquisitions to which a step-up in value was applied in purchase ~~accounting, compared~~accounting. Such charges amounted to ~~$0.6~~$0.1 million ~~of such charges incurred during the corresponding period of the prior fiscal year. Certain patents that we license to third parties in exchange~~and $0.4 million, respectively, for ~~agreed upon royalties will expire within the next three months. Royalty income was $2.6 million and $7.5 million in~~ the three and nine months ended June 30, 2016 ~~respectively, as compared~~. Restructuring actions initiated prior to ~~$3.4~~fiscal year 2017 are expected to result in aggregate cost of revenue reductions of approximately $6.1 million on an annual pretax basis when the savings fully take effect. We began realizing a portion of the cost savings in fiscal year 2016, and such savings amounted to a cumulative aggregate amount of approximately $5.6 million from inception through June 30, 2017, of which $1.4 million and ~~$8.0~~$3.9 million, inrespectively, were realized during the three and nine months ended June 30, ~~2015, respectively. We expect royalty income~~2017. Based on revenue levels from fiscal year 2016, these savings are expected to ~~decline~~improve gross margins by approximately 1.3 percentage points for the Brooks Semiconductor Solutions Group segment once the full savings are realized. Restructuring actions initiated during fiscal year 2017 are expected to result in ~~future periods as a result~~aggregate cost of ~~these patent expirations.~~

revenue reductions of approximately $1.9 million on an annual pretax basis when the savings fully take effect. Please refer to the "Restructuring Charges" section below for further information on the restructuring actions initiated prior to fiscal year 2017.

Our Brooks Life Science Systems segment reported gross margins of ~~38.7%~~36.7% for the three months ended June 30, ~~2016~~2017 as compared to ~~27.8%~~38.7% for the corresponding period of the prior fiscal year. The decrease was a result of increased expenses supporting the transition to in-sourcing of manufacturing from a contract provider to our Manchester location, expenses related to the consolidation of our Cool Labs operations, and revenue mix. Our Brooks Life Science Systems segment reported gross margins of 36.4% for the nine months ended June 30, 2017 as compared to 35.3% for the corresponding period of the prior fiscal year. The increase was driven by ~~$1.1 million of~~improved cost ~~savings as a result of recent restructuring actions, the acquisition of BioStorage, which improved segment gross margins by approximately 3.0 percentage points for the period,~~management on large stores projects and volume leverage driven by organic ~~growth. Our restructuring actions were~~revenue growth, partially offset by increased expenses supporting the transition to in-sourcing of manufacturing from a contract provider to our Manchester location and expenses related to the ~~closure~~consolidation of ~~all manufacturing at~~ our ~~Poway, California~~Cool Labs operations. Cost of revenue during the three and Spokane, Washington sites. These closures allowed us to consolidate our systems operations into our Manchester, UK location. These benefits to gross margins were partially offset by the adverse impact of changes in foreign currency exchange rates by approximately 0.6 percentage points.

~~Our Brooks Life Science Systems segment reported gross margins of 35.3% for the~~ nine months ended June 30, 2016 as compared to 26.2% or the corresponding period of the prior fiscal year. The increase in gross margins is primarily attributable to favorable mix improvement towards higher margin instruments and services, cost savings as a result of recent restructuring actions, and the acquisition of BioStorage, which improved segment gross margins by approximately 1.7 percentage points for the period. These savings were partially offset by reduced absorption due to lower manufacturing volumes and the unfavorable impact of changes in foreign currency exchange rates during the period. Cost of revenue2017 included $0.4 million of amortization related to completed technology in the three months ended June 30, 2016 as compared to $0.4 million of amortization related to completed technology in the three months ended June 30, 2015. Cost of revenue for the nine months ended June 30, 2016 and 2015 included $1.1 million and $1.2 million, respectively, of amortization related to completed ~~technology. Additionally, cost~~technology as compared to $0.4 million and $1.1 million, respectively, for the corresponding periods of the prior fiscal year. Cost of revenue ~~for~~ during

Table of Contents

the three and nine months ended June 30, ~~2015~~2017 also included ~~$1.0~~$0.1 million and $0.4 million, respectively, of charges related to the sale of ~~inventory~~inventories obtained in acquisitions to which a step-up in value was applied in purchase accounting.

~~During the second quarter of~~ Restructuring actions initiated prior to fiscal year 2016, we initiated a restructuring action to streamline our operating structure and reduce our footprint as part of a company-wide initiative to improve profitability and competitiveness, as described in the "Restructuring and Other Charges" section below. When the savings fully take effect, this action is2017 are expected to ~~reduce~~result in aggregate cost of

~~Table~~ revenue reductions of ~~Contents~~

~~revenue by~~ approximately ~~$4.5~~$1.0 million on an annual pretax ~~basis.~~basis when the savings fully take effect. We began realizing a portion of the cost savings ~~beginning~~ in ~~the third quarter of~~ fiscal year 2016, ~~which~~and such savings amounted to a cumulative aggregate amount of approximately $1.1 million from inception through June 30, 2017, of which $0.3 million and $0.8 ~~million.~~million, respectively, were realized during the three and nine months ended June 30, 2017. Based on ~~annualized~~ revenue levels from ~~the three months ended June 30,~~fiscal year 2016, these savings are expected to improve gross margins by approximately ~~0.8~~0.9 percentage points for the Brooks Life Science Systems segment once the full savings are realized.

Please refer to the "Restructuring Charges" section below for further information on the restructuring actions initiated prior to fiscal year 2017.

Research and Development

Research and development ~~expense was~~expenses were $12.0 million and $34.1 million, respectively, during the three and nine months ended June 30, 2017 as compared to $12.8 million ~~for~~and $39.2 million, respectively, during the ~~each~~corresponding periods of the prior fiscal year. The decrease of $0.9 million during the three months ended June 30, 2017 as compared to the three months ended June 30, 2016 ~~and 2015.~~

~~Research and development~~is primarily attributable expense ~~was $39.2~~reductions within Brooks Life Sciences System segment. The decrease of $5.1 million ~~for~~during the nine months ended June 30, 2017 as compared to the nine months ended June 30, 2016 reflects expense reductions of $3.1 million within Brooks Semiconductor Solutions Group segment and $2.0 million within the Brooks Life Sciences System segment. Lower research and development expenses during the three and nine months ended June 30, 2017 as compared to ~~$39.0~~the three and nine months ended June 30, 2016 were primarily attributable to the restructured central operations of research and development, and the progression of certain projects from the development stage to market, which has resulted in lower project spending.

Restructuring actions initiated prior to fiscal year 2017 are expected to reduce research and development expenses by approximately $3.9 million on an annual pretax cost basis once the full savings are realized. We began realizing a portion of the cost savings in fiscal year 2016, and such savings amounted to a cumulative aggregate amount of approximately $4.1 million from inception through June 30, 2017, of which $1.3 million was realized prior to fiscal year 2017, and $1.0 million and $2.8 million, respectively, was realized during the three and nine months ended June 30, 2017. Please refer to the "Restructuring Charges" section below for further information on the restructuring actions initiated prior to fiscal year 2017.

Selling, General and Administrative

Selling, general and administrative expenses were $40.0 million for the three months ended June 30, 2017 as compared to $31.9 million for the corresponding period of the prior fiscal year. The increase of ~~$0.2~~$8.2 million ~~reflects~~was attributable to: (i) higher merger costs of $3.6 million, which amounted to $3.7 million and $0.1 million, respectively, during the three months ended June 30, 2017 and 2016, (ii) higher employee-related costs of $2.4 million, (iii) higher stock-based compensation expense of $2.2 million, and (iv) higher amortization expense of $0.5 million, which related primarily to customer relationship intangibles and amounted to $3.3 million during the three months ended June 30, 2017 as compared to $2.8 million during the three months ended June 30, 2016. These increases were partially offset by lower depreciation expense of $0.9 million for information technology systems.

Selling, general and administrative expenses were $109.5 million for the nine months ended June 30, 2017 as compared to $98.7 million for the corresponding period of the prior fiscal year. The increase of $10.8 million was attributable to: (i) higher stock-based compensation expense of $3.1 million, (ii) higher employee-related costs of $2.9 million, (iii) higher merger costs of $2.7 million, ~~incurred within Brooks Semiconductor Solutions Group segment, partially offset by a reduction~~which amounted to $6.0 million and $3.3 million, respectively, during the nine months ended June 30, 2017 and 2016, (iv) higher amortization expense of ~~$2.5~~$1.6 million, inwhich related primarily to customer relationship intangibles and amounted to $9.6 million during the ~~Brooks Life Sciences System segment. The increase in Brooks Semiconductor Solutions Group segment~~nine months ended June 30, 2017 as compared to $8.1 million during the nine months ended June 30, 2016, and (v) higher selling, general and administrative expenses ~~included $0.8~~of $1.3 million as a result of acquisitions made since the ~~acquisition~~beginning of ~~Contact.~~the prior fiscal year. These increases were partially offset by lower depreciation expense of $3.4 million for information technology systems.

~~During the second quarter~~

Table of Contents

Restructuring actions initiated prior to fiscal year 2016, we initiated a restructuring action to streamline our operating structure and reduce our footprint as part of a company-wide initiative to improve profitability and competitiveness, as described in the "Restructuring and Other Charges" section below. This action is2017 are expected to reduce ~~research~~selling, general and ~~development~~administrative expenses by approximately ~~$2.7~~$10.1 million on an annual pretax cost basis once the full savings are realized. We began realizing a portion of the cost savings beginning in ~~the third quarter of~~ fiscal year 2016, ~~which~~and such savings amounted to ~~$0.6~~a cumulative aggregate amount of approximately $12.0 million from inception through June 30, 2017, of which $4.7 million was realized prior to fiscal year 2017, and $2.5 million and $7.3 million, respectively, was realized during the ~~period then ended.~~

~~Selling, General~~three and ~~Administrative~~

~~Selling, general~~nine months ended June 30, 2017.

Restructuring Charges

Comparison of the Three Months Ended June 30, 2017 and ~~administrative expense was $31.9 million for~~2016

During the three months ended June 30, ~~2016~~2017, we recorded restructuring charges of $0.8 million as compared to $27.8 million for the corresponding period of the prior fiscal year. Acquisitions made since the beginning of the prior fiscal year drove an increase of $3.1 million in selling, general and administrative expense and $0.8 million in amortization expense as compared to the corresponding period of the prior fiscal year. Merger costs were $0.1 million during the three months ended June 30, 2016 and less than $0.1$1.0 million during the corresponding period of the prior fiscal year. ~~Additional increases~~The decrease of $0.2 million was attributable to the impact of restructuring actions initiated during fiscal years ended June 30, 2017 and 2016, as described below.

Restructuring Charges Incurred During the Three Months Ended June 30, 2017

During the three months ended June 30, 2017, we recognized restructuring charges of $0.8 million which related to severance attributable primarily to the Brooks Semiconductor Solutions Group segment. Such costs included $0.6 million of charges related to the actions initiated during fiscal year 2017 and $0.2 million of charges related to the actions initiated prior to fiscal year 2017.

During fiscal year 2017, we initiated a restructuring action to streamline service operations in order to optimize the cost structure and improve productivity. Total severance costs expected to be incurred in connection with this action are $1.5 million, of which $0.9 million were recognized prior to the third quarter of fiscal year 2017 and $0.6 million recognized during the three months ended June 30, 2017. This restructuring action has been substantially completed as of June 30, 2017 and is expected to result in approximately $1.9 million in cost of revenue reductions. Accrued restructuring costs related to this action were $0.8 million at June 30, 2017 and are expected to be paid within the next twelve months from cash flows generated from operating activities.Prior to fiscal year 2017, we initiated a restructuring action within the Brooks Semiconductor Solutions Group segment to consolidate our Jena, Germany repair facility into the Chelmsford, Massachusetts repair operation as a part of our strategy to reduce global footprint and streamline the cost structure. Total severance costs expected to be incurred in connection with this action are $2.5 million, of which: (i) $1.8 million were recognized prior to fiscal year 2017, (ii) $0.5 million were recognized during fiscal year 2017, including $0.2 million during the three months ended June 30, 2017, and (iii) $0.2 million are expected to be recognized in future periods. This restructuring action has been substantially completed as of June 30, 2017 and is expected to result in approximately $1.7 million in annual pre-tax cost savings, including $1.4 million of cost of revenue reductions and $0.2 million of selling, general and administrative expense ~~included higher professional service fees~~reductions. We began realizing cost savings for this action starting with the second quarter of ~~$0.8 million as compared to the corresponding period of the prior~~ fiscal year ~~partially offset~~2017 when certain employees impacted by ~~a reduction in stock-based compensation expense of $0.7 million which was primarily attributable~~this action ceased providing their services. Such cost savings amounted to ~~the award forfeitures related to employees that were terminated as a result of the restructuring actions initiated during the fiscal year 2016.~~

Selling, general and administrative expense was $98.7 million for the nine months ended June 30, 2016 as compared to $86.8 million for the corresponding period of the prior fiscal year. Acquisitions made since the beginning of the prior fiscal year drove an increase of $7.4 million in selling, general and administrative expense and $2.3 million in amortization expense as compared to the corresponding period of the prior fiscal year. Merger costs increased to $3.3 million during the nine months ended June 30, 2016, as compared to $0.4 million in the prior period, primarily as a result of the acquisition of BioStorage. Additional increases in selling, general and administrative expense included higher employee-related costs of $1.3$0.3 million and ~~professional service fees~~$0.5 million, respectively, in cost of $1.3 million as compared to the corresponding period of the prior fiscal year. These increases were partially offset by a reduction in stock-based compensation expense of $1.6 million which was primarily attributable to the award forfeitures related to employees that were terminated as a result of the restructuring actions initiatedrevenue reductions during ~~fiscal year 2016.~~

~~Amortization expense for~~ the three and nine months ended June 30, ~~2016 was~~2017. Accrued restructuring costs related ~~primarily~~ to ~~customer relationship intangibles~~this action were $0.9 million at June 30, 2017 and ~~amounted to $2.8 million and $8.1 million, respectively, compared to $1.9 million and $5.7 million, respectively, during the corresponding periods of the prior fiscal year.~~

During the second quarter of fiscal year 2016, we initiated a restructuring action to streamline our operating structure and reduce our footprint as part of a company-wide initiative to improve profitability and competitiveness, as described in the "Restructuring and Other Charges" section below. This action isare expected to ~~reduce selling, general and administrative expenses by approximately $6.3 million on an annual pretax cost basis once~~be paid within the ~~full savings are realized. We began realizing a portion of the cost savings beginning in the third quarter of fiscal year 2016 which amounted to $1.3 during the period then ended.~~

next twelve months from cash flows generated from operating activities.

Restructuring ~~and Other~~ Charges

~~Comparison of~~ Incurred During the Three Months Ended June 30, 2016 ~~and 2015~~

~~We recorded restructuring charges of $1.0 million during~~

During the three months ended June 30, 2016, ~~as compared~~we recorded restructuring charges of $1.0 million related to ~~$0.4 million for the corresponding period of the prior fiscal year. The increase of $0.6 million was primarily~~severance which were attributable to ~~restructuring~~ actions initiated ~~during~~prior to the third quarter of fiscal year 2016.

~~Our restructuring actions initiated during fiscal year 2016 resulted in $1.0 million of costs during the three months ended June 30, 2016 which~~ Such charges were comprised ~~primarily~~ of $0.3 million of costs attributable to the Brooks Life Science Systems

~~Table of Contents~~

segment and $0.6 million of costs related to the ~~company-wide~~Company-wide restructuring ~~action initiated during the second quarter of fiscal year 2016.~~

~~During the second quarter of fiscal year 2016, we initiated a restructuring action to streamline business operations~~actions, as ~~part of a company-wide initiative to improve profitability and competitiveness.~~described above. The action primarily includes the elimination of positions across the Company, including certain senior management positions, and is expected to benefit all segments. Total severance costs incurred in connection with this action were $5.9 million, of which $0.6 million was recognized during the three months ended June 30, 2016 and $5.2 million was recognized prior to the third quarter of fiscal year 2016. The action is expected to result in approximately $13.5 million in annual pre-tax cost savings, including $4.5 million of cost of revenue reductions, $2.7 million of research and development cost reductions, as well as $6.3 million of selling, general and administrative expense reductions. This action is expected to be substantially completed by September 30, 2016 and result in additional restructuring charges of $0.1 million in future periods. We began realizing a portion of the cost savings beginning in the third quarter of fiscal year 2016 which amounted to approximately $2.7 million. Accrued restructuring costs of $4.4 million at June 30, 2016 from this action are expected to be paid within the next twelve months with cash flows generated from operating activities.

~~Actions related to the~~ Brooks Life Science Systems ~~segment~~restructuring initiatives included several actions that were primarily related to streamlining ~~its~~the segment’s management structure, integrating BioStorage, and the closure of the segment’s Spokane, Washington facility in March 2016. ~~These restructuring actions were substantially completed as of June 30, 2016 and are not expected to result in any additional restructuring charges in future periods.~~ Total severance costs incurred in connection with these ~~actions are~~initiatives were $2.8 million, of which $2.4 million was recognized prior to the third quarter of fiscal year 2016, and $0.3 million ~~was~~were recognized during the three months ended June 30, 2016. ~~These~~There were no accrued restructuring costs from these initiatives at June 30, 2017.

Table of Contents

Comparison of the Nine Months Ended June 30, 2017 and 2016

During the nine months ended June 30, 2017, we recorded restructuring charges of $2.7 million as compared to $9.8 million during the corresponding period of the prior fiscal year. The decrease of $7.1 million was attributable to the impact of restructuring actions initiated during fiscal years ended June 30, 2017 and 2016, as described below.

Restructuring Charges Incurred During the Nine Months Ended June 30, 2017

During the nine months ended June 30, 2017, we recorded restructuring charges of $2.7 million related to severance, of which $2.2 million were attributable to the Brooks Semiconductor Solutions Group segment, $0.2 million were attributable to the Brooks Life Science Systems segment and $0.3 million were attributable to the Company-wide restructuring action initiated prior to fiscal year 2017.

The restructuring charges of $2.2 million attributable to the Brooks Semiconductor Solutions Group segment consisted of $1.5 million of charges related to the actions initiated during fiscal year 2017 to streamline service operations, as described above, and $0.7 million of charges related to the actions initiated prior to fiscal year 2017. Restructuring charges of $0.7 million consisted of $0.5 million attributable to the consolidation of the Jena, Germany repair facility into the Chelmsford, Massachusetts repair operation, as described above, and $0.2 million related to the integration of Contact after its acquisition, including the closure and transfer of its Mistelgau, Germany manufacturing operations to a contract manufacturer, and other cost reductions to improve profitability and competitiveness. Total restructuring costs incurred in connection with this action are approximately $3.2 million, of which approximately $3.0 million were recognized prior to fiscal year 2017 and $0.2 million were recognized during the nine months ended June 30, 2017. This restructuring action was substantially completed as of June 30, 2017 and is not expected to result in any significant additional restructuring charges in future periods. The action is expected to result in approximately ~~$2.6~~$2.5 million in annual pre-tax cost savings, including ~~$0.6~~$0.3 million of cost of revenue reductions, ~~less than $0.1~~$1.4 million of research and development cost reductions, as well as ~~$2.0~~$0.8 million of selling, general and administrative expense reductions. ~~Accrued~~Total cost savings realized as a result of this restructuring ~~costs from these actions~~action amounted to $2.6 million, of ~~$0.9~~which $1.0 million ~~at June 30, 2016 are expected~~were realized prior to ~~be paid within~~fiscal year 2017 and $0.6 million and $1.7 million, respectively, were realized during the ~~next twelve months with cash flows generated from operating activities.~~

~~During the~~ three and nine months ended June 30, ~~2016,~~2017. There were no accrued restructuring costs from this action at June 30, 2017.

Prior to fiscal year 2017, we ~~committed to~~initiated a restructuring ~~plan related~~action to ~~centralizing~~streamline our ~~North American and European repair services for cryogenic and automation products in our Chelmsford, Massachusetts facility and relocating such services from our facility in Jena, Germany~~business operations as a part of ~~our strategy~~a Company-wide initiative to ~~reduce global footprint~~improve profitability and ~~streamline our cost structure. We expect~~competitiveness which is expected to begin the transformation initiative during the fourth quarter of fiscal year 2016 and fully complete the transition by the end of the first quarter of fiscal year 2017. The restructuring plan includes elimination of certain positions within the service and administrative functions as a part of this initiative. Certainemployees of the Jena facility are covered by a collective bargaining agreement with a German labor union which imposes a legal restriction on our ability to complete the restructuring plan. During the three months ended June 30, 2016, we entered into the negotiations with the Workers Council concerning the amount of involuntary termination benefits payable to employees impacted by this restructuring action, timing of these payments and the related terms of this arrangement. As of June 30, 2016, we did not communicate the termination benefit amounts to the employees that will be impacted by this restructuring action since such amounts may be materially impacted by the outcome of the ongoing negotiations with the Workers Council. As a result, we did not recognize the liability for restructuring charges related to this plan as of June 30, 2016. During the three months ended June 30, 2016, we communicated to the landlord our intention to vacate the Jena facility upon expiration of the lease term on February 28, 2017.

During the three months ended June 30, 2015, we recorded restructuring charges of $0.4 million related to severance costs which were attributable to Brooks Semiconductor Solutions Group segment for the integration of Dynamic Micro Systems Semiconductor Equipment GmbH, or DMS, with our operations and the transition of manufacturing of certain products from the our facility in Mistelgau, Germany to a third party contract manufacturer.both segments. Total ~~cumulative~~ severance costs incurred in connection with ~~these restructuring plans~~this action were ~~$1.9~~$6.1 million, of which $5.8 million were recognized prior to fiscal year 2017 and $0.3 million were ~~substantially completed on December 31, 2015. Liabilities related to restructuring costs from these actions were fully paid as of June 30, 2016.~~

~~Comparison of the Nine Months Ended June 30, 2016 and 2015~~

~~We recorded restructuring charges of $9.8 million~~recognized during the nine months ended June, 30, ~~2016 as compared to $3.7 million for the corresponding period of the prior fiscal year. The increase of $6.1 million was primarily~~2017. Severance costs incurred in connection with this action were attributable to ~~higher costs incurred~~the elimination of positions across the Company, including certain senior management positions. The action is expected to result in approximately $13.1 million in annual pre-tax cost savings, including $4.3 million of cost of revenue reductions, $2.6 million of research and development cost reductions, as well as $6.2 million of selling, general and administrative expense reductions. This action was substantially completed as of June 30, 2017 and is not expected to result in any additional restructuring charges in future periods. Total cost savings realized as a result of ~~the~~this restructuring ~~actions initiated during~~action amounted to $15.6 million, of which $5.8 million were realized prior to fiscal year ~~2016, as described above, partially offset by lower facility-related~~2017 and $3.3 million and $9.8 million, respectively, were realized during the three and nine months ended June 30, 2017. There were no accrued restructuring costs ~~of $1.2 million.~~

related to this action at June 30, 2017.

Restructuring Charges Incurred During the Nine Months Ended June 30, 2016

During the nine months ended June 30, 2016, we recorded restructuring charges of $9.8 million related to severance, ~~costs~~ which consisted of $8.5 million of charges related to restructuring actions initiated during ~~the nine months ended June 30,~~fiscal year 2016 and $1.2 million of charges related to restructuring actions initiated in prior ~~periods. Restructuring~~to fiscal year 2016. The charges of $8.5 million ~~included $5.8 million~~were comprised primarily of ~~charges related to the restructuring action that benefited all segments, as well as~~ $2.8 million of costs attributable to the restructuring initiatives within the Brooks Life Science Systems segment and $5.8 million of costs related to the Company-wide restructuring action, as described above. ~~Our restructuring actions initiated in prior periods resulted in~~The charges of $1.2 million ~~of costs~~were attributable to the Brooks Semiconductor Solutions ~~segment. These restructuring actions were primarily~~

~~Table of Contents~~

Group segment and related to the integration of Contact, ~~the~~as well as closure and transfer of the Mistelgau, Germany manufacturing operations to a contract manufacturer, as ~~well as reductions in workforce in order to improve our cost structure and profitability. These actions were substantially completed as~~described above.

Table of ~~June 30, 2016. Total severance costs incurred in connection with these actions were $4.8 million,~~Contents

Non-Operating Income (Losses)

Gain on Settlement of which $3.6 million was recognized prior to fiscal year 2016 and $1.2 million was recognized during the nine months ended June 30, 2016. Accrued restructuring costs from these actions of $0.4 million at June 30, 2016 are expected to be paid within the next twelve months with cash flows generated from operating activities.

Equity Method Investment- During the nine months ended June 30, ~~2015,~~2017, we ~~incurred restructuring charges~~recognized a gain of ~~$3.7~~$1.8 million which included severance costs of $2.5 million and facility-related costs of $1.2 million. Severance costs of $2.5 million were attributable to Brooks Semiconductor Solutions Group segment in connection withon the restructuring actions described above. Total cumulative severance costs incurred in connection with these restructuring actions were $4.8 million. Facility exit costs of $1.2 million attributable to Brooks Semiconductor Solutions Group segment were related to outsourcing manufacturing of certain lines of Polycold cryochillers and compressors within the United States to a third party contract manufacturer. The facility exit costs represented future lease payments and expected operating costs to be paid until the terminationsettlement of the ~~facility lease. We terminated~~equity method investment in BioCision which was included as a part of the ~~lease~~non-cash consideration for an acquisition of Cool Lab. For additional information on ~~October 27, 2015~~this transaction, please refer to Note 4, "Acquisitions", and ~~fully paid~~Note 6, "Equity Method Investments", in the ~~related restructuring liability during~~Notes to the ~~first quarter~~unaudited Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" of ~~fiscal year 2016.~~

this Form 10‑Q.

Other ~~(Loss) Income, Net~~

~~Other (loss) income,~~loss, net ~~was $(0.1) million for~~. During the three months ended June 30, 2017 and 2016, ~~as compared to $0.5~~other loss, net was $0.3 million ~~for the corresponding period~~and $0.1 million respectively. The increase of ~~the prior fiscal year. The decrease of $0.6~~$0.2 million was primarily attributable to ~~$0.5 million of interest penalty income collected from a past due royalty payment during the third quarter of fiscal year 2015, as well as~~ an increase ~~of $0.1 million~~ in foreign currency exchange losses during the three months ended June 30, ~~2016~~2017 as compared to the corresponding period of the prior fiscal year.

~~Other (loss) income, net was $(0.3) million for~~ During the nine months ended June 30, 2017 and 2016, ~~as compared to $2.6~~other loss, net was $0.8 million ~~for the corresponding period~~and $0.3 million, respectively. The increase of ~~the prior fiscal year. The decrease of $2.9~~$0.6 million was primarily attributable to higher foreign currency exchange losses of ~~$1.5~~$0.2 million recognized during the nine months ended June 30, ~~2016~~2017 as compared to ~~foreign currency exchange gains of $1.0 million during~~ the corresponding period of the prior fiscal year. Additionally, we ~~collected interest penalty~~recognized higher losses of $0.3 million during the first nine months of fiscal year 2017 as compared to the corresponding period of the prior fiscal year related to fair value measurement of convertible debt securities in BioCision. For additional information on this transaction, please refer to Note 4, "Acquisitions", and Note 6, "Equity Method Investments", in the Notes to the unaudited Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" of this Form 10‑Q.

Income Tax Provision

During the three and nine months ended June 30, 2017, we recorded an income tax provision of ~~$0.5~~$3.7 million ~~from a past due royalty payment~~and $9.9 million, respectively, which was driven primarily by foreign income. Tax provision recorded during the nine months ended June 30, ~~2015.~~

~~Income Tax~~

We2017 was partially offset by $0.9 million of tax benefits related to the reduction of reserves for unrecognized tax benefits resulting from the expiration of statutes of limitations.

During the three and nine months ended June 30, 2016, we recorded an income tax provision of $0.2 million and $75.1 million, ~~for the three and nine months ended June 30, 2016,~~ respectively. The income tax provision of $0.2 million recorded during the third quarter of fiscal ~~year~~ 2016 was primarily driven by global income generated during the quarter, partially offset by $0.3 million of tax benefits related to the reduction of reserves for unrecognized tax benefits resulting from the expiration of ~~statutes~~statues of limitations. The ~~income~~ tax provision of $75.1 million during the nine months ended June 30, 2016 was driven primarily ~~driven~~ by the change in a valuation allowance against U.S. net deferred tax assets recognized during the second quarter of fiscal year 2016. Partially offsetting the valuation allowance provision were benefits related to pre-tax losses in the U.S., the reinstatement of the U.S. research and development tax credit retroactive to January 1, 2015, and reductions of reserves for unrecognized tax benefits resulting from the expiration of the ~~statutes~~statute of limitations.

~~We recorded an~~ For additional discussion of the calculation of our income tax ~~provision~~liabilities and further information on the valuation allowance, please refer to Note 8, "Income Taxes", in the Notes to the unaudited Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" of ~~$3.3 million and $1.8 million for~~this Form 10‑Q.

Equity in Earnings of Equity Method Investments

During the three and nine months ended June 30, ~~2015, respectively.~~2017, we recorded income of $2.5 million and $7.2 million, respectively, from our equity method investments as compared to $0.4 million and $1.2 million, respectively, during the corresponding periods of the prior fiscal year. The ~~tax provision~~increases in income of ~~$3.3~~$2.2 million ~~for the third quarter~~and $6.0 million, respectively, were primarily attributable to increases of ~~fiscal year 2015 was primarily driven by global~~$1.9 million and $5.8 million, respectively, in income from ULVAC Cryogenics, Inc., or UCI, generated during the ~~quarter~~three and ~~interest related~~nine months ended June 30, 2017 as compared to ~~unrecognized tax benefits. The tax provision~~the corresponding periods of ~~$1.8~~the prior fiscal year.

Additionally, we incurred losses of $0.5 million from our investment in BioCision during the nine months ended June 30, ~~2015 was primarily driven by global income generated~~2017 compared to $0.7 million during the corresponding period ~~and partially offset by $0.9 million~~ of tax benefits related to the reduction of reserves for unrecognized tax benefits resulting from the expiration of statutes of limitations and by $0.9 million of tax benefits resulting from the reinstatement of the U.S. federal research and development tax credit, retroactive to January 1, 2014.

~~ASC Topic 740,~~ ~~Income Taxes, requires that all available evidence, both positive and negative, be considered~~prior fiscal year. Our investment in determining, based on the weight of that evidence, whether a valuation allowance is needed. The weight given to the potential effect of negative and positive evidence should be commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, (a) the more positive evidence is necessary and (b) the more difficult it is to support a conclusion that a valuation allowance is not needed for some portion or all of the deferred tax asset. A cumulative loss in recent years is considered a significant piece of negative evidence that is difficult to overcome in assessing the need for a valuation allowance.

We evaluate the realizability of our deferred tax assets by tax-paying component and assess the need for a valuation allowance on an annual and quarterly basis. We evaluate the profitability of each tax-paying component on a historic cumulative basis and on a forward looking basis in the course of performing this analysis. We evaluated all positive and

~~Table of Contents~~

~~negative evidence in concluding it~~BioCision was ~~appropriate to establish a full valuation allowance against U.S. net deferred tax assets~~settled during the ~~second~~first quarter of fiscal year ~~2016.~~

~~We evaluated negative evidence to assess if it is more likely than not that we could make use~~2017 as a part of the U.S. deferred tax assets before they expire. In reviewing performance over the recent years, we currently show cumulative income. This history considers earnings in recent years from the discontinued operations of Granville-Phillips, which was divested during the fiscal year 2014 and freed up capital for investments in strategic growth businesses. In evaluating the historical results of the continuing businesses, we have not yet demonstrated profitability with losses in recent periods. We reported U.S. pre-tax losses during fiscal year 2015 and the first two quarters of fiscal year 2016. The loss in the second quarter of fiscal year 2016 included a significant charge for restructuring actions which are ultimately expected to improve future profitability. However, because of the restructuring charges and loss in the second quarter of fiscal year 2016, we now project a net lossnon-cash consideration for the ~~full fiscal year~~acquisition of Cool Lab on November 28, 2016. ~~These factors presented significant negative evidence in~~We have traditionally recorded the ~~evaluation.~~

We also considered positive evidence, such as expected improvements that are the results of investments in growth businesses. We prepare comprehensive forecasts based on the cyclical trends of the semiconductor industry, expected capital spending in the industryincome and ~~demand for new product offerings. Our forecast of future improved profits includes a portion~~losses related to ~~foreign operations, specifically in~~ the Contamination Control Solutions business, which are excluded from the evaluation of U.S. deferred tax assets. The forecast of future improved profits also includes a portion related to U.S. operations. The Brooks Life Science Systems segment has driven cumulative losses in the U.S. in the past years, but is expected to provide growth in revenue and improved profitability resulting in increased profits in the U.S. After extensive review, despite significant projected improvements, the forecasted income is not considered to be objectively verifiable evidence because the revenue growth expected for the future periods is based on projections and not significantly supported by specific bookings and backlog of orders for product in place as of the end of the quarter. The evidence is therefore considered more subjective than objective under the accounting rules. Accordingly, this positive evidence is given less weight than the negative evidence discussed above.

A cumulative loss is difficult negative evidence to overcome on a more likely than not basis. Future income projections can only overcome this negative evidence if the projections are considered objectively verifiable. Since the income projections are not considered objectively verifiable, we determined that realization of the U.S. net deferred tax assets should not be viewed as more likely than not until the projected profits are supported with objectively verifiable evidence of the improvements. As a result of this change in assessment, we recorded a tax provision of $79.3 million to establish the valuation allowance against U.S. net deferred tax assets during the second quarter of fiscal year 2016. We will continue to maintain a full valuation allowance on our U.S. deferred tax assets until there is sufficient positive evidence to support the reversal of all or some portion of these allowances.

We are subject to U.S. federal income tax and various state, local and international income taxes in various jurisdictions. The amount of income taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we file tax returns. In the normal course of business, we are subject to examination by taxing authorities throughout the world. We have income tax audits in progress in various jurisdictions in which we operate. The years subject to examination vary for the U.S. and international jurisdictions, with the earliest tax year being 2009. It is reasonably possible that the related unrecognized tax benefits could change from those recorded in our unaudited Consolidated Balance Sheets based on the outcome of these examinations or the expiration of statutes of limitations for specific jurisdictions. We currently anticipate that it is reasonably possible that the unrecognized tax benefits will be reduced by approximately $1.2 million within the next twelve months as a result of the lapse of statutes of limitations in multiple jurisdictions.

~~Equity in Earnings (Losses) of Equity Method Investments~~

~~During the three months ended June 30, 2016 and 2015, we recorded income of $0.4 million and $0.3 million from our~~ equity method ~~investments, respectively.~~

investment in BioCision one quarter in arrears. During the nine months ended June 30, ~~2016 and 2015,~~2017, we recorded ~~$1.2 million~~

Table of ~~income from equity method investments compared to $0.3 million~~Contents

two additional months of losses for the corresponding period of the prior fiscal year. The increases were primarily attributable to $1.0 million of higher income from ULVAC Cryogenics, Inc., or UCI. The prior fiscal year also included $0.5 million of losses from our investmentactivity in ~~Yaskawa Brooks Automation, Inc., or YBA, which liquidated during the fourth quarter of fiscal year 2015.~~

During the first quarter of fiscal year 2015, we agreed in principle with Yaskawa to dissolve the YBA joint venture. In connection with the dissolution, YBA assessed the recoverability of assets held by the joint venture and notified its equity partners of the asset impairment. As a result, we recorded an impairment charge of $0.7 million during the nine months ended June 30, 2015 to write down the carrying value of ~~our equity~~the investment ~~in YBA to its fair value. The impairment charge was included in our proportionate share of losses generated from the joint venture with YBA.~~

~~Net Income (Loss)~~

~~Table of Contents~~

We reported net income of $8.6 million and $7.7 million for the three months ended June 30, 2016 and 2015, respectively. As discussed in detail above, the increase in profitability during the third quarter of fiscal year 2016 as compared to the corresponding period of the prior fiscal year was primarily attributable to a decrease of $3.1 million in our income tax provision, partially offset by lower operating income of $1.7 million driven primarily by an increase in operating expenses as a result of ~~recent acquisitions.~~

its settlement. We ~~reported net loss~~deemed the amount of ~~$80.0~~$0.2 million ~~for the nine months ended June 30, 2016 as compared~~related to ~~net income of $7.7 million for the corresponding period of the prior fiscal year. As discussed in detail above, the decrease in profitability during the first nine~~two additional months of ~~fiscal year 2016 as compared~~activity to be insignificant. For additional information on this transaction, please refer to Note 4, "Acquisitions", and Note 6, "Equity Method Investments", in the Notes to the ~~corresponding prior period was primarily attributable to an increase~~unaudited Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" of $73.3 in our income tax provision during the first half of fiscal year 2016 driven by the change in a valuation allowance against U.S. net deferred tax assets. Additionally, we incurred an operating loss of $6.2 million during the nine months ended June 30, 2016 compared to an operating income of $6.7 million during the corresponding period of the prior fiscal year driven primarily by an increase in restructuring charges and operating expenses as a result of recent acquisitions.

~~Liquidity and Capital Resources~~

this Form 10‑Q.

LIQUIDITY AND CAPITAL RESOURCES

A considerable portion of our revenue is dependent on the demand for semiconductor capital equipment, which historically has experienced periodic downturns. We believe that we have adequate resources to fund our currently planned working capital and capital expenditure requirements for the next twelve months. The cyclical nature of our served markets and uncertainty in the current global economic environment make it difficult for us to predict longer-term liquidity requirements with sufficient certainty. We may be unable to obtain any additional financing on terms favorable to us, if at all. If adequate funds are not available to us on acceptable terms or otherwise, we may be unable to successfully develop or enhance products and services, respond to competitive pressure or take advantage of acquisition opportunities, any of which could have a material adverse effect on our business, financial condition and operating results.

Our cash, cash equivalents and marketable securities were $119.7 million as of June 30, ~~2016 and September 30, 2015 consist~~2017. Our cash balances are held in numerous locations throughout the world, with a substantial majority of those amounts located outside of the ~~following (in thousands):~~

June 30, 2016 September 30, 2015
Cash and cash equivalents $ 66,116
$ 80,722
Short-term marketable securities 18
70,021
Long-term marketable securities 6,068
63,287
$ 72,202
$ 214,030

~~Cash~~United States. As of June 30, 2017, we had cash and cash equivalents of $117.1 million, of which $71.0 million was held outside of the United States. If these funds are needed for our U.S. operations, we would be required to accrue tax liabilities to repatriate these funds. However, given the amount of our net operating loss carryovers in the United States, such repatriation will most likely not result in U.S. cash tax payments within the next twelve months. Our intent is to permanently reinvest these funds outside of the U.S. and our current operating plans do not demonstrate a need to repatriate these funds for our U.S. operations. We believe that our current cash balance, access to the revolving line of credit, as well as to debt and capital markets along with cash flows from operations will satisfy working capital, financing activities, and capital expenditure requirements for the next twelve months. We had marketable securities ~~were $66.1~~of $2.6 million and $6.1 million, respectively, atas of June 30, ~~2016 as compared to $80.7 million~~2017 and ~~$133.3 million, respectively, at~~ September 30, ~~2015.~~2016. The decrease ~~in cash and cash equivalents~~ of ~~$14.6 million and marketable securities of $127.2~~$3.6 million was primarily attributable to the acquisition of BioStorage for $125.5 million. Additional uses of cash included $20.6 million of cash dividends paid to our shareholders and $9.4 million paid for the capital expenditures, partially offset by inflows of $126.5 million related to net proceeds from sales and maturitiessale of marketable ~~securities.~~

~~Cash provided by operating activities was $16.1 million~~securities during the nine months ended June 30, 2016, and was composed of a net loss of $80.0 million adjusted for the impact of non-cash related charges of $100.5 million, partially offset by net working capital increases of $4.4 million. Non-cash related charges consisted primarily of a deferred tax provision of $71.9 million primarily resulting from the change in a valuation allowance against U.S. net deferred tax assets during the first nine months of fiscal year 2016, depreciation and amortization of $21.3 million, as well as stock-based compensation expense of $8.2 million.

The increase in working capital was primarily attributable to a decrease in accrued compensation and benefits of $6.6 million primarily as a result of bonus payouts for the fiscal year 2015, a decrease in accrued expenses and other current liabilities of $5.0 million due to the timing of payments, a decrease in accounts payable of $4.7 million, as well as an increase in prepaid expenses and other current assets of $3.9 million. These increases were partially offset by an increase in deferred revenue of $7.2 million mostly related to milestone billings on percentage of completion type contracts along with a higher volume of product shipments requiring subsequent customer acceptance. Accounts receivable were $101.1 million as of June 30, 2016 compared to $86.4 million as of September 30, 2015.

Cash used in investing activities was $10.4 million during the nine months ended June 30, 2016, and included primarily $125.5 million for the acquisition of BioStorage, $9.4 million of capital expenditures and disbursement of $1.5 million for a loan provided to BioCision. These uses of cash were partially offset by $126.5 million related to net proceeds from sales and maturities of marketable securities.

~~Table of Contents~~

Cash used in financing activities was $20.2 million during the nine months ended June 30, 2016 and was composed primarily of quarterly cash dividends of $20.6 million we paid to our shareholders during the first nine months of fiscal year 2016, payment of $0.5 million for deferred financing costs, partially offset by proceeds of $0.9 million from the issuance of common stock under the employee stock purchase plan.

~~During the second~~third quarter of fiscal year ~~2016, we initiated a restructuring action~~2017 to ~~streamline business operations as part of a company-wide initiative~~finance the upcoming acquisition subsequent to improve profitability and competitiveness. The action primarily includes the elimination of positions across the Company, including certain senior management positions, and is expected to result in approximately $12.0 million of reduced annual cash spending. Accrued restructuring liabilities of $5.8 million at June 30, ~~2016 are expected to be paid within the next twelve months with cash flows generated from operating activities. Please~~2017. For additional information on this transaction, please refer to Note ~~14, “Restructuring and Other Charges”~~19, "Subsequent Events" in the Notes to the unaudited ~~consolidated financial statements, as well as "Restructuring and Other Charges" section above for further information on~~Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" of this ~~action.~~

On May 26, 2016, we and certain of our subsidiaries entered into a credit agreement with Wells Fargo Bank, N.A., or Wells Fargo. The credit agreement provides for a five-year senior secured revolving line of credit, or line of credit, of $75.0 million. Availability under the line of credit is subject to a borrowing base which is redetermined from time to time based on specific advance rates on eligible assets. Such availability is limited to the lesser of (a) the amount committed by the lenders under the credit agreement, or (b) the amount determined based on the borrowing base limited to a certain percentage of certain eligible U.S. assets, including accounts receivable, inventory, real property, as well as machinery and equipment. If at any time the aggregate amounts outstanding under the credit agreement exceed the borrowing base then in effect, we are required to make a prepayment of an amount sufficient to eliminate such excess. The agreement includes sublimits of up to $25.0 million for letters of credit and $7.5 million of swing loans at the time there is more than one lender under the credit agreement. Availability under the borrowing base may be affected by events beyond our control, such as collection cycles, advance rates and general economic conditions. These and other events could require us to seek waivers or amendments of covenants or alternative sources of financing or to reduce expenditures. We can provide no assurance that such waivers, amendments or alternative financing sources could be obtained or, if obtained, would be on terms acceptable to us. The proceeds from the credit agreement are available for permitted acquisitions and general corporate purposes. The line of credit expires on May 26, 2021 with all outstanding principal and interest due and payable on such date or an earlier date if declared due and payable on such earlier date pursuant to the terms of the credit agreement (by acceleration or otherwise). Subject to certain conditions of the credit agreement, net cash proceeds from sales of certain collateral during the term of the arrangement are required to be used to prepay borrowings under the line of credit. We may also voluntarily prepay certain amounts under the line of credit without penalty or premium.

Form 10‑Q.

As of June 30, ~~2016,~~2017, we had approximately ~~$49.0~~$56.5 million available for borrowing under ~~the~~our line of ~~credit.~~credit with Wells Fargo Bank, N.A. discussed below. There were no amounts outstanding pursuant to the line of credit as of June 30, 2017 and September 30, 2016. The amount of funds available for borrowing under the line of credit arrangement may fluctuate each period based on our borrowing base availability.

Overview of Cash Flows and Liquidity

Our cash, cash equivalents and marketable securities as of June 30, 2017 and September 30, 2016 consist of the following (in thousands):


	June 30, 2017		September 30, 2016
Cash and cash equivalents	$	117,081	$	85,086
Short-term marketable securities		12		39
Long-term marketable securities		2,565		6,096
	$	119,658	$	91,221

Table of Contents

Nine Months Ended June 30, 2017 Compared to Nine Months Ended June 30, 2016

Overview

Cash and cash equivalents and marketable securities were $119.7 million at June 30, 2017 as compared to $91.2 million at September 30, 2016. The increase in cash and cash equivalents and marketable securities of $28.4 million was primarily attributable to cash inflows of $61.4 million generated from our operating activities, partially offset by cash outflows related to dividend payments of $20.9 million made to our shareholders during the first nine months of fiscal year 2017, a cash payment of $5.3 million which included $4.8 million for the acquisition of Cool Lab and $0.5 million for the settlement of Contact consideration, as well as capital expenditure payments of $6.8 million.

Operating Activities

Cash flows from operating activities can fluctuate significantly from period to period as earnings, working capital needs and the timing of payments for income taxes, restructuring activities and other charges impact reported cash flows.

Cash flows provided by operating activities were $61.4 million during the nine months ended June 30, 2017 as compared to $16.1 million during the corresponding period of the prior fiscal year. The increase of $45.3 million in cash flows from operating activities was primarily attributable to the following factors:

During the nine months ended June 30, 2017 and 2016, we generated net income (loss) of $45.2 million and $(80.0) million, respectively, including the impact of non-cash related charges of $23.1 million and $100.5 million, respectively, which amounted to $68.3 million and $20.5 million, respectively. The non-cash charges are listed in the Consolidated Statements of Cash Flows and consist primarily of depreciation and amortization, stock-based compensation, undistributed earnings of equity method investments, deferred tax provision, as well as a gain on settlement of equity method investments. Please refer to the "Results of Operations" section above for a detailed discussion of our operating results during the nine months ended June 30, 2017 as compared to the nine months ended June 30, 2016. The increase in net income is primarily attributable to a lower income tax provision of $65.2 million due to the change in a valuation allowance against U.S. net deferred tax assets recognized during the nine months ended June 30, 2016, higher operating income of $52.9 million, higher income generated from our equity method investments of $6.0 million, as well as a gain of $1.8 million recognized on the settlement of the equity method investment in BioCision included as a part of the non-cash consideration for an acquisition of Cool Lab. For additional information on this transaction, please refer to Note 4, "Acquisitions", and Note 6, "Equity Method Investments", in the Notes to the unaudited Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" of this Form 10‑Q.

Our trade accounts receivable, inventories and trade accounts payable used $18.0 million in operating cash flows during the nine months ended June 30, 2017 as compared to $0.3 million generated during the corresponding period of the prior fiscal year. The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories and trade accounts payable depends upon how effectively we manage our working capital and can be significantly impacted by the timing of customer billings, cash collections and vendor payments made during the period, as well as the sales volume driven by customer demand. The unfavorable impact of $18.3 million was primarily attributable to accounts receivable which resulted in a use of cash of $14.6 million for the first nine months of fiscal year 2017 compared to a source of cash of $2.9 million for the corresponding period of the prior fiscal year. The changes in accounts receivable are primarily attributable to the increased revenue, the timing of product shipments and the associated billings, as well as the timing of customer cash collections. Additionally, the increase in inventory balances resulted in a use of cash of $12.9 million during the first nine months of fiscal year 2017 as compared to a source of cash of $2.1 million for the corresponding period of the prior fiscal year. The increase in inventory is primarily to support increased customer demand for the Brooks Semiconductor Solutions Group segment and the Brooks Life Science Systems segment products during the nine months ended June 30, 2017. The unfavorable impacts associated with increased accounts receivable and inventory balances were partially offset by a favorable impact of $9.5 million related to an increase in accounts payable, which resulted in a source of cash during the first nine months of fiscal year 2017 compared to a use of cash of $4.7 million during the corresponding period of the

Table of Contents

prior fiscal year. The favorable impact of accounts payable is primarily attributable to an increase in inventory levels to support increased volumes and the timing of vendor payments.

The timing of payments for prepaid expenses and other assets collectively with accrued expenses and other liabilities used $6.7 million in operating cash flows during the nine months ended June 30, 2017 as compared to $11.8 million during the corresponding period of the prior fiscal year. The favorable impact of $5.1 million was primarily attributable to the timing of payments for income taxes for vested restricted stock units, as well as costs and other operating expenses that provided $13.5 million in cash inflows from operating activities. Such cash inflows were partially offset by cash payments of $7.9 million for restructuring liabilities. During fiscal year 2017, we initiated a restructuring action to streamline service operations in order to optimize the cost structure and improve productivity. Prior to fiscal year 2017, we initiated a restructuring action within the Brooks Semiconductor Solutions Group segment to consolidate our Jena, Germany repair facility into Chelmsford, Massachusetts repair operation as a part of our strategy to reduce global footprint and streamline the cost structure. Additionally, we initiated a restructuring action during fiscal year 2016 to streamline our business operations as part of a Company-wide initiative to improve profitability and competitiveness which benefited all segments. Accrued restructuring liabilities of $1.7 million at June 30, 2017 from these actions are expected to be paid within the next twelve months from cash flows generated from operating activities. These restructuring plans are expected to result in approximately $14.8 million of reduced annual cash spending. Please refer to Note 13, “Restructuring Charges” in the Notes to the unaudited Consolidated Financial Statements included in Item 1 "Consolidated Financial Statements" of this Form 10‑Q, as well as "Results of Operations- Restructuring Charges" section above for further information on these actions.

Deferred revenue provided $17.9 million and $7.2 million, respectively, during the nine months ended June 30, 2017 and 2016. The favorable impact on our cash flows from operating activities in both periods was primarily attributable to billings and collections in advance of revenue recognition within our Brooks Life Science Systems segment.

Investing Activities

Cash flows from investing activities consist primarily of cash used for acquisitions, capital expenditures and purchases of marketable securities, as well as cash proceeds generated from sales and maturities of marketable securities.

Cash used in investing activities was $9.0 million during the nine months ended June 30, 2017 as compared to $10.4 million during the corresponding period of the prior fiscal year. Cash used in investing activities of $9.0 million during the first nine months of fiscal year 2017 included cash payments of $4.8 million for the acquisition of Cool Lab and $0.5 million for the settlement of contingent consideration related to the acquisition of Contact, as well as $6.8 million of capital expenditures. These uses of cash were partially offset by $3.6 million related to net proceeds from sales and maturities of marketable securities during the first nine months of fiscal year 2017.

Cash used in investing activities of $10.4 million during the nine months ended June 30, 2016 included primarily a cash payment of $125.5 million for the acquisition of BioStorage, $9.4 million of capital expenditures and $1.5 million of cash disbursements for a loan receivable. These uses of cash were partially offset by $126.5 million related to net proceeds from sales and maturities of marketable securities.

Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development and improving information technology infrastructure. Capital expenditures were $6.8 million during the first nine months of fiscal year 2017 as compared to $9.4 million during the corresponding period of the prior fiscal year. The decrease of $2.6 million was primarily attributable to investments made in our information technology assets and construction of a new clean room during the first nine months of fiscal year 2016.

Financing Activities

Cash used in financing activities was $20.0 million during the nine months ended June 30, 2017 as compared to $20.2 million during the corresponding period of the prior fiscal year. Cash used in financing activities included

Table of Contents

primarily cash dividend payments of $20.9 million and $20.6 million, respectively, made during the nine months ended June 30, 2017 and 2016.

Capital Resources

Line of Credit Facility

We maintain a five-year senior secured revolving line of credit, or line of credit, with Wells Fargo Bank, N.A., or Wells Fargo, that provides for up to $75.0 million of borrowing capacity, subject to borrowing base availability, as ~~described above.~~

~~Borrowings~~defined in the agreement governing the line of credit. As of June 30, 2017, we had approximately $56.5 million available for borrowing under the line of credit. There were no amounts outstanding under the line of credit ~~bear an annual interest rate equal, at our option, the base rate or the LIBOR rate plus, in each case, an applicable margin determined based on our liquidity~~ as of the first day of each fiscal quarter. LIBOR rate is reset at the beginning of each selected interest period based on the rate then in effect. The base rate is a fluctuating interest rate equal to the highest of (i) the federal funds rate plus 0.50%, (ii) the one month LIBOR rate plus 1.00%June 30, 2017 and ~~(iii) the prime lending rate announced by Wells Fargo.~~September 30, 2016. During the three and nine months ended June 30, ~~2016,~~2017, we incurred ~~$0.7~~less than $0.1 million and $0.1 million, respectively, in ~~deferred financing costs which included commitments~~ fees and other costs directly associated with obtaining line of credit financing. Please refer to Note 2, "Summary of Significant Accounting Policies" in Notes to unaudited consolidated financial statements for further information on the deferred financing fees. In addition to interest on any outstanding borrowings under the credit agreement, we are required to pay monthly fees of 0.25% per year related to the unused portion of the ~~revolver~~line of credit commitment ~~amounts.~~amount. We incurred ~~approximately $16,000~~less than $0.1 million in such fees during each of the three and nine months ended June 30, 2016. All outstanding borrowings under the credit agreement are guaranteed by us along with certain U.S. subsidiaries and secured by a first priority perfected security interest in substantially all of our and guarantor's assets in the U.S., subject to certain exceptions. Additionally, we granted Wells Fargo a mortgage lien on certain company-owned real properties.

The line of credit contains certain customary representations and warranties, a financial covenant, affirmative and negative covenants, as well as events of default. In the event our liquidity is less than the greater of (i) 12.5% of the commitments under the line of credit, and (ii) $9.375 million, and continuing until the time such liquidity during a 60-consecutive day period has been equal to or greater than the greater of (a) 12.5% of the commitments under the line of credit, and (b) $9.375 million, we are required to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 measured as of the last day of each fiscal month ending during such period. Liquidity is defined as a sum of (a) excess availability under the credit agreement; and (b) unrestricted cash and cash equivalents located in bank accounts in the United States that are subject to a control agreement in favor of Wells Fargo, limited to a maximum amount of 50% of liquidity. Negative covenants limit our ability to incur additional indebtedness, liens, sell assets, consolidate or merge with or into other entities, pay non-cash dividends, (and cash dividends if we fail to meet certain payment conditions), make certain investments, prepay, redeem or retire subordinated debt, and enter into certain types of transactions with our affiliates. If any of the events of default occur and are not waived or cured within

~~Table of Contents~~

applicable grace periods, any unpaid amounts under the credit agreement, including principal and interest, may be declared immediately due and payable and the credit agreement may be terminated. We wereThe Company was in compliance with the line of credit covenants as of June 30, 2017 and September 30, 2016. We ~~are confident in our ability~~believe we will be able to generate sufficient cash in the United States and foreign jurisdictions to fund our future operating costs. We secured the revolving line of credit as an additional assurance for maintaining liquidity in the United States during potentially severe downturns of the cyclical semiconductor market, as well as for strategic investments and acquisitions. Please refer to Note ~~8, “Line~~11, "Line of ~~Credit”~~Credit" in the Notes to ~~unaudited consolidated financial statements~~our audited Consolidated Financial Statements included in Part II, Item 8 “Financial Statements and Supplementary Data” in our Annual Report on Form 10‑K for further information on ~~this arrangement.~~

On September 29, 2015, our Board of Directors approved a share repurchase program for up to $50 million worth of our common stock. The timing and amount of any shares repurchased are based on market and business conditions, legal requirements and other factors and may be commenced or suspended at any time at our discretion. There were no shares repurchased under this program during the ~~nine months ended June 30, 2016.~~

Except as disclosed, there have been no material changes to our contractual obligations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in the 2015 Annual Report on Form 10-K.

At June 30, 2016 we had approximately $1.5 million of letters of credit outstanding related primarily to customer advances and other performance obligations. These arrangements guarantee the refund of advance payments received from our customers in the event that the product is not delivered or warranty obligations are not fulfilled in accordance with the contract terms. These obligations could be called by the beneficiaries at any time before the expiration date of the particular letter of credit if the Company fails to meet certain contractual requirements. None of these obligations were called during the nine months ended June 30, 2016, and we currently do not anticipate any of these obligations to be called in the near future.

As of June 30, 2016, we had cash and cash equivalents of $66.1 million and marketable securities of $6.1 million. These balances include $53.3 million held outside of the United States. If these funds are needed for the U.S. operations, we would be required to accrue for U.S. tax liabilities to repatriate these funds. However, given the amount of our net operating loss carryovers in the United States, such repatriation will most likely not result in U.S. cash tax payments within the current fiscal year. Our intent is to permanently reinvest these funds outside of the United States and our current plans do not demonstrate a need to repatriate these funds for our U.S. operations. We believe that our current cash balance, marketable securities, access to the revolving line of credit ~~as well as to debt and capital markets along with cash flows from operations will satisfy working capital, financing activities, and capital expenditure requirements for the next twelve months.~~

arrangement.

Shelf Registration Statement

On July 27, 2016, we filed a registration statement on Form ~~S-3~~S‑3 with the SEC to sell securities, including common stock, preferred stock, warrants, debt securities, depository shares, purchase contracts and purchase units in amounts to be determined at the time of an offering. Any such offering, if it does occur, may happen in one or more transactions. The specific terms of any securities to be sold will be described in supplemental filings with the SEC. This registration statement will expire on July 27, 2019.

Employee Stock Purchase Plan

Approximately 877,427 shares of common stock issued under our 1995 Employee Stock Purchase Plan, or ESPP, for the purchases made between January 2013 and July 2016, at purchase prices ranging from $7.79 to $9.01 per share, were inadvertently not registered under federal securities laws. Based on our current stock price, we do not expect any ESPP participants who still hold shares purchased within the last year to seek rescission. However if we determine that ESPP participants are likely to seek rescission in the future, we may make a registered rescission offer to repurchase the shares issued under the ESPP during fiscal 2016 to the extent they continue to be held by the original purchasers. If holders of all of these shares seek to rescind their purchases, we could be required to make aggregate payments of up to approximately $0.3 million, which includes estimated statutory interest. As of June 30, 2017, there were approximately 36,531 shares of common stock issued under the ESPP and held by the original purchasers of such shares that may be subject to these rescission rights which expire by statute of limitations on July 31, 2017.

Dividends

On ~~July 27, 2016,~~August 1, 2017, our Board of Directors approved a cash dividend of $0.10 per share of our common stock. The total dividend of approximately ~~$6.9~~$7.0 million will be paid on September ~~23, 2016~~29, 2017 to shareholders of record at the close of business on September ~~2, 2016.~~8, 2017. Dividends are declared at the discretion of our Board of Directors and depend on actual cash flow from operations, our financial condition, capital requirements and any other factors our Board of Directors may consider relevant. We intend to pay quarterly cash dividends in the future; however, the amount and timing of these dividends may be impacted by the cyclical nature of certain markets we serve. We may reduce, delay or cancel a quarterly cash dividend based on the severity of a cyclical downturn.

~~Recently Issued Accounting Pronouncements~~

In June 2016, the Financial Accounting Standards Board, or FASB, issued a new accounting guidance for reporting credit losses. The new guidance introduces a new "expected loss" impairment model which applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities and other financial assets. Entities are required to estimate expected credit losses over the life of financial assets and record an allowance against the assets' amortized cost basis to present them at the amount expected to be collected. Additionally, the guidance amends the impairment model for available for sale debt securities and requires entities to determine whether all or a portion of the unrealized loss on such debt security is a credit loss. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption of the newly issued guidance is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard should be applied as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We expect to adopt the guidance during the first quarter of fiscal year 2021 and are currently evaluating the impact of this guidance on its financial position and results of operations.

Table of Contents

~~In May 2016, the FASB issued an amendment~~

Share Repurchase Program

On September 29, 2015, our Board of Directors approved a share repurchase program for up to ~~the revenue recognition guidance released in May 2014.~~$50 million worth of our common stock. The ~~amendment is intended to reduce the cost~~timing and ~~complexity~~amount of ~~applying the FASB's revenue recognition guidance~~any shares repurchased will be based on market and ~~result in a more consistent application of the revenue recognition rules. The amendment clarifies the implementation guidance on collectibility, non-cash consideration and the presentation of sales~~business conditions, legal requirements and other ~~similar taxes, as well as transitional guidance related to completed contracts. The guidance is effective for fiscal years,~~factors and ~~interim periods within those years, beginning after December 15, 2017 and should~~may be ~~applied~~commenced or suspended at ~~the~~any time of the adoption of the revenue recognition guidance issued in May 2014. Early adoption of the newly issued guidance is not permitted. We expect to adopt the guidance during the first quarter of fiscal year 2019 and are currently evaluating the impact ofat our discretion. There were no shares repurchased under this ~~guidance on our financial position and results of operations.~~

In April 2016, the FASB issued an amendment to the revenue recognition guidance released in May 2014. The amendment clarifies the implementation guidance on identifying performance obligations and licensing. Specifically, the amendment reduces the cost and complexity of identifying promised goods or services and improves the guidance for determining whether promises are separately identifiable. The amendment also provides implementation guidance on determining whether an entity's promise to grant a license provides a customer with either a right to use the entity's intellectual property (which is satisfied at a point in time) or a right to access the entity's intellectual property (which is satisfied over time). The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and should be applied at the time of the adoption of the revenue recognition guidance issued in May 2014. Early adoption of the newly issued guidance is not permitted. We expect to adopt the guidance during the first quarter of fiscal year 2019 and are currently evaluating the impact of this guidance on our financial position and results of operations.

In March 2016, the FASB issued an amendment to the accounting guidance to simplify accounting for share-based payment awards issued to employees. The amendment requires recognition of excess tax benefits or deficiencies within income tax expense or benefit and changes their presentation requirements on the statement of cash flows. Additionally, the entity can make an accounting policy election to either estimate the number of awards that are expected to vest, consistent with the current accounting guidance, or account for forfeitures as they occur. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption of the newly issued guidance is permitted. We expect to adopt the guidance during the first quarter of fiscal year 2018 and are currently evaluating the impact of this guidance on our financial position and results of operations.

In March 2016, the FASB issued an amendment to the revenue recognition guidance released in May 2014. The amendment clarifies the application of the principal versus agent guidance, identification of the units of accounting, as well as application of the control principle to certain types of arrangements within the scope of the guidance. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and should be applied at the time of the adoption of the revenue recognition guidance issued in May 2014. Early adoption of the newly issued guidance is not permitted. We expect to adopt the guidance during the first quarter of fiscal year 2019 and are currently evaluating the impact of this guidance on our financial position and results of operations.

In March 2016, the FASB issued an amendment to the accounting guidance to simplify the transition to the equity method of accounting. The amendment eliminates the requirement to retrospectively apply equity method of accounting as a result of an increase in the level of ownership in an investee or gaining ability to exercise significant influence. Equity method of accounting should be applied prospectively from the date the investment accounted by another method initially qualifies for the application of the equity method of accounting. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied prospectively. Early adoption is permitted in any interim or annual period. We are currently evaluating the impact of this guidance on our financial position and results of operations.

In February 2016, the FASB issued a new accounting guidance for reporting lease transactions. In accordance with provisions of the newly issued guidance, a lessee should recognize at the inception of the arrangement a right-of-use asset and a corresponding lease liability initially measured at the present value of lease payments over the lease term. For finance leases, interest on a lease liability should be recognized separately from the amortization of the right-of-use asset, while for operating leases, total lease costs are recorded on a straight-line basis over the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying assets to forgo a recognition of right-of-use assets and corresponding lease liabilities and record a lease expense on a straight-line basis. Entities should determine at the inception of the arrangement whether a contract represents a lease or contains a lease which is defined as a right to control the use of identified property for a period of time in exchange for consideration. Additionally, entities should separate the lease components from the non-lease components and allocate the contract consideration on a relative standalone price basis in accordance with provisions of ASC Topic 606, ~~Revenue from Contracts with Customers~~. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 and should be adopted via a modified retrospective approach with certain optional practical expedients that entities may elect to apply. We expect to adopt the guidance during the first quarter of fiscal year 2020 and are currently evaluating the impact of this guidance on our financial position and results of operations.

~~In January 2016, the FASB issued a new accounting guidance related to the measurement of certain equity investments and~~

~~Table of Contents~~

presentation of fair value changes for financial liabilities measured in accordance with the fair value option. Entities will be required to measure certain equity investments at fair value and recognize fair value changes in earnings unless investments qualify for the practicability exception. For financial liabilities measured using the fair value option, entities will be required to present separately in other comprehensive income fair value changes related to instrument-specific credit risk. The guidance for classification and measurement of investments in debt securities and loans remained unchanged. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods therein. Early adoption is permitted for the presentation in other comprehensive income of fair value changes related to instrument-specific credit risk for financial liabilities measured using the fair value option. The amendments related to equity securities without readily determinable fair values should be applied prospectively to equity investments included in the statement of financial position during the period of adoption. The guidance should be adopted via recording a cumulative adjustment to the beginning balances in the statement of financial position during the period of adoption. We expect to adopt the guidance during the first quarter of fiscal year 2019. We are currently evaluating the impact of the guidance on our financial position and results of operations.

In November 2015, the FASB issued an amendment to the accounting guidance to simplify the presentation of deferred income tax assets and liabilities in a statement of financial position. Deferred income tax assets, net of a corresponding valuation allowance, and liabilities related to a particular tax-paying component of an entity within a particular tax jurisdiction shall be offset and presented as a single noncurrent amount in a statement of financial position. Deferred income tax assets and liabilities attributable to different tax-paying components of an entity or different tax jurisdictions shall not be offset for the purposes of this presentation. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted. The guidance can be adopted via either a prospective or a retrospective approach for all deferred income tax assets and liabilities presented in a statement of financial position. We expect to adopt this guidance during the first quarter of fiscal year 2018 and are currently evaluating the impact of this guidance on our financial position and results of operations.

In September 2015, the FASB issued a new accounting guidance to simplify the presentation of measurement-period adjustments recognized in business combinations. Measurement-period adjustments will no longer be recognized by the acquirer retrospectively and will be recorded by the acquirer during the period in which they were determined. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and should be applied prospectively to the adjustments that occur after the effective date of the guidance. Early adoption is permitted for the financial statements that have not been issued, and we adopted the guidance during the first quarter of fiscal year 2016 to simplify the presentation of the measurement period adjustments in our consolidated financial statements. During the six months ended March 31, 2016, we recorded a measurement period adjustment of $1.1 million related to the acquisition of Contact Co., Ltd and recognized its impact in the accompanying consolidated balance sheets as of the period then ended in accordance with the provisions of the newly adopted guidance. There was no impact on the results of operationsprogram during the six months ended ~~March 31, 2016~~June 30, 2017.

Contractual Obligations and Requirements

Our inventory purchase commitments were $112.8 million and $101.4 million, respectively, at June 30, 2017 and September 30, 2016. Except as ~~a result~~disclosed below regarding letters of ~~this adjustment. This adjustment would~~credit and operating leases, there have been ~~applied retrospectively~~no material changes to our contractual obligations set forth under the heading “Management’s Discussion and ~~recognized as a reclassification~~Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in the ~~accompanying consolidated balance sheets as of September 30, 2015 in accordance with provisions of~~2016 Annual Report on Form 10‑K.

During the ~~previous guidance.~~

In August 2015, the FASB issued an amendment to the accounting guidance which clarified the presentation and subsequent measurement of debt issuance costs related to line of credit arrangements based on the SEC's Staff announcement made in June 2015. In accordance with the guidance, debt issuance costs related to line of credit arrangements can be presented as an asset and subsequently amortized ratably over the term of the arrangement, regardless of whether there are any outstanding borrowings on the arrangement. The guidance became effective upon its issuance and was adopted by us during the fourthsecond quarter of fiscal year ~~2015.~~2017, we entered into a new lease agreement for the existing 85,000 square feet of space in Indianapolis, Indiana which accommodates our sample storage, sales and support functions for the Brooks Life Science Systems segment. The ~~adoption~~original lease expires in July 2017. The new lease for such space commences on August 1, 2017 and expires on September 30, 2023. Additionally, we executed another new lease agreement for an additional 13,000 square feet of space within the aforementioned facility which commences on March 1, 2019 and expires on September 30, 2023. The new leases may be extended at the Company’s option for three additional terms of five years each subject to the terms and conditions of the ~~guidance~~lease. The non-cancelable obligations under the new leases total $2.4 million. Capital expenditure commitments related to these leases amount to $2.4 million as of June 30, 2017.

At June 30, 2017, we had approximately $3.4 million of letters of credit outstanding related primarily to customer advances and other performance obligations. These arrangements guarantee the refund of advance payments received from our customers in the event that the product is not delivered or warranty obligations are not fulfilled in accordance with the contract terms. These obligations could be called by the beneficiaries at any time before the expiration date of the particular letter of credit if we fail to meet certain contractual requirements. None of these obligations were called during the nine months ended June 30, 2017, and we currently do not anticipate any of these obligations to be called in the near future.

Off-Balance Sheet Arrangements

As of June 30, 2017, we did not have ~~an impact on our financial position and results~~any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of ~~operations.~~SEC Regulation S-K.

In July 2015, the FASB issued a new accounting guidance amending the inventory measurement. Inventory will be measured at the lower of cost or net realizable value defined as the estimated selling price in the ordinary course of business, net of costs of completion, disposal and transportation. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied prospectively. Early adoption is permitted as of the beginning of an interim or annual reporting period. We expect to adopt the guidance during the first quarter of fiscal year 2018. We are currently evaluating the impact of the guidance on our financial position and results of operations.

In February 2015, the FASB issued an amendment to the accounting guidance for consolidations of financial statements by changing the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. The guidance can be adopted either via a full retrospective approach or a modified retrospective approach by recording a cumulative-effect adjustment to beginning equity in the period of adoption. We expect to adopt the guidance during the first quarter of fiscal year 2017. We are currently evaluating the impact of the guidance on our financial position and results of operations.

Table of Contents

In January 2015, the FASB issued new accounting guidance to simplify income statement classification by removing the concept of extraordinary items from Generally Accepted Accounting Principles, or GAAP. As a result, items that are both unusual in nature and infrequent in occurrence will no longer be separately reported net of tax after the results of continuing operations. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and can be adopted retrospectively or prospectively based on an entity's election. Early adoption is permitted. We expect to adopt the guidance during the first quarter of fiscal year 2017. The adoption of the guidance is not expected to have a material impact on our financial position and results of operations.

In May 2014, the FASB issued new accounting guidance for reporting revenue recognition. The guidance provides for the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. A five-step process set forth in the guidance may require more judgment and estimation within the revenue recognition process than the current GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The guidance was initially effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. In August 2015, the FASB issued an amendment deferring the effective date of the guidance by one year. The guidance should be adopted retrospectively either for each reporting period presented or via recognizing the cumulative effect at the date of the initial application. Early adoption is permitted only as of annual reporting periods, including the interim periods, beginning after December 15, 2016. We expect to adopt the guidance during the first quarter of fiscal year 2019. We are currently evaluating the impact of this guidance on our financial position and results of operations.

In April 2014, the FASB issued an amendment to the accounting guidance for reporting discontinued operations. The amended guidance raises the threshold for disposals to qualify as a discontinued operation by requiring a component of an entity that is held for sale, or has been disposed of by sale, to represent a strategic shift that has or will have a major effect on operations and financial results. A strategic shift could include the disposal of a major line of business, a major geographical area, a major equity method investment or other major parts of an entity. In addition, the guidance allows companies to have significant continuing involvement and continuing cash flows with the discontinued operation. The guidance became effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2014 and is applied prospectively. We adopted the guidance during the first quarter of fiscal year 2016. The adoption of the guidance did not have an impact on our financial position and the results of operations.

~~Table of Contents~~

Item 3.Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a variety of market risks, including changes in interest rates affecting the return on our cash and cash equivalents, short-term and long-term investments and fluctuations in foreign currency exchange rates.

Interest Rate Exposure

Our cash and cash equivalents consist principally of money market securities ~~which~~that are short-term in nature. Our short-term and long-term investments consist mostly of highly rated corporate debt securities, U.S. Treasury securities, and obligations of U.S. Government Agencies and other municipalities. At June 30, ~~2016,~~2017, there were no marketable securities in net unrealized loss position which were included in "Accumulated Other Comprehensive Income" in the unaudited Consolidated Balance Sheets included elsewhere in this Quarterly Report on Form ~~10-Q.~~10‑Q. A hypothetical 100 basis point change in interest rates would result in a change of ~~approximately~~ less than $0.1 million in interest income earned during each of the nine months ended June 30, 2017 and 2016.

Currency Rate Exposure

We have transactions and balances denominated in currencies other than the U.S. dollar. Most of these transactions or balances are denominated in Euros, British Pounds and a variety of Asian currencies. Sales in currencies other than the U.S. dollar were approximately 35% and 34% of our total sales, respectively, during the nine months ended June 30, 2017 and 2016. These sales were made primarily by our foreign subsidiaries, which have cost structures that substantially align with the currency of sale.

In the normal course of our business, we have liquid assets denominated in non-functional currencies which include cash, short-term advances between our legal entities and accounts receivable which are subject to foreign currency exposure. Such balances were approximately ~~$38.1~~$53.4 million and $34.9 million, respectively, at June 30, 2017 and September 30, 2016, and related to the Euro, British Pound and a variety of Asian currencies. We mitigate the impact of potential currency translation losses on these short-term intercompany advances by the timely settlement of each transaction, generally within 30 days. We also utilize forward contracts to mitigate our exposures to currency movement. We incurred a foreign currency ~~loss~~losses of $1.6 million and $1.5 million, ~~for~~respectively, during the nine months ended June 30, 2017 and 2016, which related to the currency fluctuation on these balances between the time the transaction occurred and the ultimate settlement of the transaction. A hypothetical 10% change in foreign exchange rates at June 30, 2017 and 2016 would result in aan approximate change of $0.7 million ~~change~~ in our net ~~loss.~~

income (loss) during each of the nine months ended June 30, 2017 and 2016.

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, and pursuant to Rules ~~13a-15(e)~~13a‑15(e) and ~~15d-15(e)~~15d‑15(e) under the Securities Exchange Act of 1934, the Company’s management, including our chief executive officer and chief financial officer, has concluded that our disclosure controls and procedures are effective.

Change in Internal Controls. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

We are subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. We cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this Quarterly Report on the Form ~~10-Q,~~10‑Q, we believe that none of these claims will have a material adverse effect on our consolidated financial condition or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that our assessment of any claim will reflect the ultimate outcome and an adverse outcome in certain matters could, from time-to-time, have a material adverse effect on our consolidated financial condition or results of operations in particular quarterly or annual periods.

Item 1A.Risk Factors

You should carefully review and consider the information regarding certain factors that could materially affect our business, consolidated financial condition or results of operations set forth under Item 1A. Risk Factors in the ~~2015~~2016 Annual Report on Form ~~10-K.~~10‑K. There have been no material changes from the risk factors disclosed in our ~~2015~~2016 Annual Report on Form ~~10-K, with the exception of the additional risk factor described below.~~10‑K. We may disclose changes to risk factors or additional factors from time to time in our future filings with the SEC.

~~Risk Related to the Referendum of the United Kingdom’s Membership in the European Union~~

~~Table of Contents~~

The announcement of the Referendum of the United Kingdom’s, or the U.K., Membership in the European Union, or E.U., (referred to as Brexit), advising for the exit of the United Kingdom from the European Union triggered volatility in global stock markets and currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar against foreign currencies in which we conduct our business. As described in Item 3, "Quantitative and Qualitative Disclosures About Market Risk", of this 10-Q, most of our foreign currency denominated transactions are conducted in Euros, British Pounds and a variety of Asian currencies. Sales in currencies other than the U.S. dollar were approximately 34% of our total sales during the nine months ended June 30, 2016. As a result of a strengthening dollar, our revenue denominated in foreign currencies may be reduced as a result of translating into fewer U.S. dollars. While the full impact of Brexit is uncertain, we have assessed that the relative impact on our results of operations due to fluctuations in currency exchange rates was immaterial during the third quarter of fiscal year 2016 as a result of low overall revenue exposure in the United Kingdom mitigated further by offsetting costs that are recorded in the local currency and the appreciation in other currency exchange rates.

The announcement of Brexit may also create global economic uncertainty, which may cause our customers to closely monitor their costs and reduce their spending on our products and services. If the Referendum is passed into law, negotiations would commence to determine the future terms of the U.K.’s relationship with the E.U., including the terms of trade between the U.K. and the E.U. The effects of Brexit will depend on any agreements the U.K. makes to retain access to E.U. markets either during a transitional period or more permanently. The measures could potentially disrupt the markets we serve and may cause us to lose customers and employees. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which E.U. laws to replace or replicate. Any of these effects of Brexit, among others, could adversely affect our business, results of operations and financial condition.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

As part of our equity compensation program, we offer recipients of restricted stock units the opportunity to elect to sell their shares to the Company at the time of vesting to satisfy tax obligations due in connection with such vesting. The following table provides information concerning shares of our Common Stock, $0.01 par value, purchased to satisfy the employees’ obligations with respect to withholding taxes in connection with the vesting of shares of restricted stock during the three months ended June 30, 2016. Upon purchase, these shares are immediately retired.

Period
Total
Number
of Shares
Purchased

Average Price Paid
per Share

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
April 1 — 30, 2016 —
$ —
—
May 1 — 31, 2016 1,264
9.33
1,264
June 1 — 30, 2016 4,185
11.57
4,185
Total 5,449
$ 11.01
5,449

Share Repurchase Program

Item 5. Other Information

On August 1, 2017, our Board of Directors amended Article II, Section 2.8 of our Amended and Restated Bylaws to allow directors to be removed with or without cause by the holders of a majority of our shares then entitled to vote at an election of directors and to remove the ability of directors to remove other directors. The amendment is consistent with the Delaware General Corporation Law, or the DGCL, and recent rulings by the Delaware Court of Chancery, in proceedings not involving us, which provide that under Section 141(k) of the DGCL, subject to certain exceptions, a corporation without a classified board or cumulative voting for directors cannot restrict the right of a majority of its stockholders to remove directors with or without cause. Before the amendment, Section 2.8 provided that directors could only be removed for cause by either the vote of the holders of eighty percent (80%) of our voting stock outstanding or by a majority of the directors then in office, and only after reasonable notice and opportunity to be heard before the body proposing to remove the director. The summary of the amendment is qualified in its entirety by reference to the complete copy of our Amended and Restated Bylaws and the Amendment to Amended and Restated Bylaws, dated August 1, 2017, which are filed as Exhibit 3.01 and Exhibit 3.02, respectively, to this Quarterly Report on Form 10-Q and are incorporated by reference into this Item 5.

Table of Contents

Item 6.Exhibits

The following exhibits are included herein:


Exhibit No.		Description

~~Exhibit~~ ~~No.~~ 2.1		~~Description~~ Asset Purchase Agreement, dated as of July 5, 2017, by and among Brooks Automation, Inc., Pacific Bio-Material Management, Inc. and Novare, LLC (incorporated herein by reference to Exhibit 2.1 to the Company’s current report on Form 8-K, filed on July 7, 2017).

~~10.1~~ 3.01		~~Separation~~ Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.01 of the Company’s current report on Form 8-K, filed on February 11, 2008).

3.02		Amendment to Amended and Restated Bylaws of the Company, dated August 1, 2017.

10.01*		Letter Agreement dated ~~April 12,~~November 1, 2016 between the Company and ~~Mark D. Morelli.~~David E. Jarzynka.

~~10.2~~ 31.01		~~Credit Agreement, dated May 26, 2016, by and among the Registrant, certain of its subsidiaries, each of its lenders from time to time a party thereto and Wells Fargo Bank, National Association.~~

~~10.3~~		~~Guaranty and Security Agreement, dated May 26, 2016, by and among the Registrant, certain of its subsidiaries and Wells Fargo Bank, National Association.~~

~~31.01~~		Certification of the ~~Registrant's~~Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02		Certification of the ~~Registrant's~~Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification of the ~~Registrant's~~Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following material from the ~~Company's~~Company’s Quarterly Report on Form ~~10-Q,~~10‑Q, for the quarter ended June 30, ~~2016,~~2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the unaudited Consolidated Balance Sheets; (ii) the unaudited Consolidated Statements of Operations; (iii) the unaudited Consolidated Statements of Comprehensive Income (Loss); (iv) the unaudited Consolidated Statements of Cash Flows; and (v) the Notes to the unaudited Consolidated Financial Statements.

*The Company previously filed this exhibit as Exhibit 10.2 to its Quarterly Report of Form 10-Q for the quarter ended March 31, 2017, filed on May 5, 2017, but the exhibit was inadvertantly filed as Exhibit 102 on the Securities and Exchange Commssion’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. The Company is refiling the exhibit with this Quarterly Report on Form 10-Q so that is properly filed on the EDGAR system.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	BROOKS AUTOMATION, INC.

Date: ~~July 28, 2016~~August 4, 2017	/S/s/ Lindon G. Robertson
	Lindon G. Robertson
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

Date: ~~July 28, 2016~~August 4, 2017	/S/s/ David Pietrantoni
	David Pietrantoni
	Vice President-Finance and Corporate Controller
	(Principal Accounting Officer)

Table of Contents

EXHIBIT INDEX


Exhibit No.		Description

~~Exhibit~~ ~~No.~~ 2.1		~~Description~~ Asset Purchase Agreement, dated as of July 5, 2017, by and among Brooks Automation, Inc., Pacific Bio-Material Management, Inc. and Novare, LLC (incorporated herein by reference to Exhibit 2.1 to the Company’s current report on Form 8-K, filed on July 7, 2017)

~~10.1~~ 3.01		~~Separation~~ Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.01 of the Company’s current report on Form 8-K, filed on February 11, 2008).

3.02		Amendment to Amended and Restated Bylaws of the Company, dated August 1, 2017.

10.01*		Letter Agreement dated ~~April 12,~~November 1, 2016 between the Company and ~~Mark D. Morelli.~~David E. Jarzynka.

~~10.2~~ 31.01		~~Credit Agreement, dated May 26, 2016, by and among the Registrant, certain of its subsidiaries, each of its lenders from time to time a party thereto and Wells Fargo Bank, National Association.~~

~~10.3~~		~~Guaranty and Security Agreement, dated May 26, 2016, by and among the Registrant, certain of its subsidiaries and Wells Fargo Bank, National Association.~~

~~31.01~~		Certification of the ~~Registrant's~~Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02		Certification of the ~~Registrant's~~Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification of the ~~Registrant's~~Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following material from the ~~Company's~~Company’s Quarterly Report on Form ~~10-Q,~~10‑Q, for the quarter ended June 30, ~~2016,~~2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the unaudited Consolidated Balance Sheets; (ii) the unaudited Consolidated Statements of Operations; (iii) the unaudited Consolidated Statements of Comprehensive Income (Loss); (iv) the unaudited Consolidated Statements of Cash Flows; and (v) the Notes to the unaudited Consolidated Financial Statements.

* The Company previously filed this exhibit as Exhibit 10.2 to its Quarterly Report of Form 10-Q for the quarter ended March 31, 2017, filed on May 5, 2017, but the exhibit was inadvertantly filed as Exhibit 102 on the Securities and Exchange Commssion’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. The Company is refiling the exhibit with this Quarterly Report on Form 10-Q so that is properly filed on the EDGAR system.



	June 30, 2016			September 30, 2015
Assets
Current assets
Cash and cash equivalents	$	66,116		$	80,722
Marketable securities	18			70,021
Accounts receivable, net	101,091			86,448
Inventories	98,157			100,619
Deferred tax assets	3,958			17,609
Assets held for sale	2,806			2,900
Prepaid expenses and other current assets	21,078			15,158
Total current assets	293,224			373,477
Property, plant and equipment, net	54,763			41,855
Long-term marketable securities	6,068			63,287
Long-term deferred tax assets	1,125			70,476
Goodwill	202,386			121,408
Intangible assets, net	85,646			55,446
Equity method investments	26,530			24,308
Other assets	12,579			9,397
Total assets	$	682,321		$	759,654
Liabilities and Stockholders' equity
Current liabilities
Accounts payable	$	41,502		$	44,890
Deferred revenue	25,522			17,886
Accrued warranty and retrofit costs	5,955			6,089
Accrued compensation and benefits	18,031			20,401
Accrued restructuring costs	5,789			2,073
Accrued income taxes payable	7,168			6,111
Deferred tax liabilities	331			1,251
Accrued expenses and other current liabilities	17,751			15,550
Total current liabilities	122,049			114,251
Long-term tax reserves	2,714			3,644
Long-term deferred tax liabilities	6,962			3,196
Long-term pension liabilities	3,212			3,118
Other long-term liabilities	4,329			3,400
Total liabilities	139,266			127,609
Commitments and contingencies (Note 19)
Stockholders' equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding	—			—
Common stock, $0.01 par value, 125,000,000 shares authorized, 82,097,858 shares issued and 68,635,989 shares outstanding at June 30, 2016; 81,093,052 shares issued and 67,631,183 shares outstanding at September 30, 2015	821			811
Additional paid-in capital	1,851,292			1,846,357
Accumulated other comprehensive income	12,598			5,898
Treasury stock at cost- 13,461,869 shares	(200,956		)	(200,956		)
Accumulated deficit	(1,120,700		)	(1,020,065		)
Total stockholders' equity	543,055			632,045
Total liabilities and stockholders' equity	$	682,321		$	759,654



	Three Months Ended June 30,						Nine Months Ended June 30,
	2016			2015			2016			2015
Revenue
Product	$	111,596		$	120,816		$	302,238		$	336,941
Services	35,938			24,078			100,532			70,002
Total revenue	147,534			144,894			402,770			406,943
Cost of revenue
Product	69,557			77,128			192,816			221,877
Services	23,814			16,579			68,437			48,766
Total cost of revenue	93,371			93,707			261,253			270,643
Gross profit	54,163			51,187			141,517			136,300
Operating expenses
Research and development	12,819			12,834			39,208			39,001
Selling, general and administrative	31,854			27,825			98,667			86,845
Restructuring and other charges	996			358			9,807			3,711
Total operating expenses	45,669			41,017			147,682			129,557
Operating income (loss)	8,494			10,170			(6,165		)	6,743
Interest income	55			199			310			678
Interest expense	(37		)	(100		)	(56		)	(300		)
Other (loss) income, net	(107		)	460			(289		)	2,640
Income (loss) before income taxes and equity in earnings (losses) of equity method investments	8,405			10,729			(6,200		)	9,761
Income tax provision	220			3,340			75,070			1,790
Income (loss) income before equity in earnings (losses) of equity method investments	8,185			7,389			(81,270		)	7,971
Equity in earnings (losses) of equity method investments	379			292			1,248			(313		)
Net income (loss)	8,564			7,681			(80,022		)	7,658
Basic net income (loss) per share	$	0.12		$	0.11		$	(1.17	)	$	0.11
Diluted net income (loss) per share	$	0.12		$	0.11		$	(1.17	)	$	0.11
Dividend declared per share	$	0.10		$	0.10		$	0.30		$	0.30

Weighted average shares outstanding used in computing net (loss) income per share:
Basic	68,628			67,454			68,437			67,321
Diluted	69,166			68,571			68,437			68,520



	Three Months Ended,
	March 31, 2016							March 31, 2015
	As Previously Reported		Adjustment			As Revised		As Previously Reported		Adjustment			As Revised
Cost of product revenue	$	65,346	$	(120	)	$	65,226	$	79,048	$	(2,356	)	$	76,692
Cost of service revenue	23,135		120			23,255		14,240		2,356			16,596
Total cost of revenue	$	88,481	$	—		$	88,481	$	93,288	$	—		$	93,288

	Six Months Ended,
	March 31, 2016							March 31, 2015
	As Previously Reported		Adjustment			As Revised		As Previously Reported		Adjustment			As Revised
Cost of product revenue	$	123,496	$	(238	)	$	123,258	$	149,268	$	(4,519	)	$	144,749
Cost of service revenue	44,386		238			44,624		27,668		4,519			32,187
Total cost of revenue	$	167,882	$	—		$	167,882	$	176,936	$	—		$	176,936



	Three Months Ended,
	December 31, 2015							December 31, 2014
	As Previously Reported		Adjustment			As Revised		As Previously Reported		Adjustment			As Revised
Cost of product revenue	$	58,150	$	(118	)	$	58,032	$	70,220	$	(2,163	)	$	68,057
Cost of service revenue	21,251		118			21,369		13,428		2,163			15,591
Total cost of revenue	$	79,401	$	—		$	79,401	$	83,648	$	—		$	83,648



	Three Months Ended June 30, 2015
	As Previously Reported		Adjustment			As Revised
Cost of product revenue	$	79,721	$	(2,593	)	$	77,128
Cost of service revenue	13,986		2,593			16,579
	$	93,707	$	—		$	93,707



	Nine Months Ended June 30, 2015
	As Previously Reported		Adjustment			As Revised
Cost of product revenue	$	228,989	$	(7,112	)	$	221,877
Cost of service revenue	41,654		7,112			48,766
	$	270,643	$	—		$	270,643



	Fiscal Year Ended September 30, 2015
	As Previously Reported		Adjustment			As Revised
Cost of product revenue	$	307,865	$	(9,517	)	$	298,348
Cost of service revenue	55,738		9,517			65,255
Total cost of revenue	$	363,603	$	—		$	363,603

	Fiscal Year Ended September 30, 2014
	As Previously Reported		Adjustment			As Revised
Cost of product revenue	$	252,688	$	(2,420	)	$	250,268
Cost of service revenue	62,823		2,420			65,243
Total cost of revenue	$	315,511	$	—		$	315,511



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2016:
Corporate securities	$	2,315	$	—	$	—		$	2,315
Other debt securities	18		—		—			18
Municipal securities	3,741		12		—			3,753
Total marketable securities	$	6,074	$	12	$	—		$	6,086
September 30, 2015:
U.S. Treasury securities and obligations of U.S. government agencies	$	30,343	$	39	$	—		$	30,382
Corporate securities	54,725		13		(48		)	54,690
Mortgage-backed securities	857		27		—			884
Other debt securities	5,056		3		—			5,059
Municipal securities	30,258		18		(9		)	30,267
Bank certificate of deposits	12,024		2		—			12,026
	$	133,263	$	102	$	(57	)	$	133,308



	Fair Value
Due in one year or less	$	18
Due after one year through five years	3,753
Due after ten years	2,315
Total marketable securities	$	6,086



	Fair Value of Assets and Liabilities
Accounts receivable	$	16,942
Prepaid expenses and other current assets	321
Property, plant and equipment	14,345
Intangible assets	41,460
Goodwill	79,889
Other assets	53
Debt assumed	(385		)
Accounts payable	(1,708		)
Accrued liabilities	(9,423		)
Deferred revenue	(1,766		)
Long-term deferred tax liabilities	(14,169		)
Other liabilities	(61		)
Total purchase price, net of cash acquired	$	125,498



	Three Months Ended, June 30,				Nine Months Ended, June 30,
	2016		2015		2016			2015
Revenue	$	147,534	$	155,237	$	413,816		$	436,509
Net income (loss)	9,163		6,966		(74,024		)	251

Basic (loss) income per share	$	0.13	$	0.10	$	(1.08	)	$	—
Diluted (loss) income per share	$	0.13	$	0.10	$	(1.08	)	$	—

Weighted average shares outstanding used in computing net loss per share:
Basic	68,628		67,454		68,437			67,321
Diluted	69,166		68,571		68,437			68,520



	Fair Values of Assets and Liabilities
Accounts receivable	$	1,980
Inventory	2,857
Prepaid and other current assets	213
Property, plant and equipment	101
Completed technology	1,230
Trademarks and trade names	750
Customer relationships	4,810
Goodwill	8,247
Accounts payable	(2,079		)
Deferred revenue	(72		)
Accrued liabilities	(992		)
Long-term deferred tax liabilities	(1,540		)
Total purchase price, net of cash acquired	$	15,505



	Brooks Semiconductor Solutions Group			Brooks Life Science Systems		Other			Total
Gross goodwill, at September 30, 2014	$	651,067		$	47,378	$	26,014		$	724,459
Accumulated goodwill impairments	(588,944		)	—		(26,014		)	(614,958		)
Goodwill, net of accumulated impairments, at September 30, 2014	62,123			47,378		—			109,501
Acquisitions and adjustments	3,660			8,247		—			11,907
Gross goodwill, at September 30, 2015	654,727			55,625		26,014			736,366
Accumulated goodwill impairments	(588,944		)	—		(26,014		)	(614,958		)
Goodwill, net of accumulated impairments, at September 30, 2015	65,783			55,625		—			121,408
Acquisitions and adjustments	1,050			79,928		—			80,978
Gross goodwill, at June 30, 2016	655,777			135,553		26,014			817,344
Accumulated goodwill impairments	(588,944		)	—		(26,014		)	(614,958		)
Goodwill, net of accumulated impairments, at June 30, 2016	$	66,833		$	135,553	$	—		$	202,386



	June 30, 2016						September 30, 2015
	Cost		Accumulated Amortization		Net Book Value		Cost		Accumulated Amortization		Net Book Value
Patents	$	7,808	$	7,463	$	345	$	7,808	$	7,394	$	414
Completed technology	60,441		49,982		10,459		60,748		46,718		14,030
Trademarks and trade names	9,143		4,028		5,115		4,241		3,604		637
Customer relationships	114,201		44,474		69,727		77,716		37,351		40,365
Total intangible assets	$	191,593	$	105,947	$	85,646	$	150,513	$	95,067	$	55,446



Fiscal year ended September 30,
2016	$	3,810
2017	15,566
2018	14,052
2019	13,713
2020	12,909
Thereafter	25,596
	$	85,646



	June 30, 2016		September 30, 2015
Inventories:
Raw materials and purchased parts	$	60,883	$	62,441
Work-in-process	16,488		21,563
Finished goods	20,786		16,615
Total inventories	$	98,157	$	100,619



Activity - Three Months Ended June 30, 2016
Balance at March 31, 2016		Accruals		Costs Incurred			Balance at June 30, 2016
$	5,735	$	2,279	$	(2,059	)	$	5,955



Activity - Three Months Ended June 30, 2015
Balance at March 31, 2015		Accruals		Costs Incurred			Balance at June 30, 2015
$	6,203	$	2,725	$	(2,744	)	$	6,184



Activity - Nine Months Ended June 30, 2016
Balance at September 30, 2015		Accruals		Costs Incurred			Balance at June 30, 2016
$	6,089	$	6,989	$	(7,123	)	$	5,955



Activity - Nine Months Ended June 30, 2015
Balance at September 30, 2014		Adjustments for Acquisitions and Divestitures		Accruals		Costs Incurred			Balance at June 30, 2015
$	6,499	$	81	$	7,870	$	(8,266	)	$	6,184



Buy Currency	Notional Amount of Buy Currency	Sell Currency	Maturity	Notional Amount of Sell Currency	Fair Value of Assets	Fair Value of Liabilities
British Pound	210	Norwegian Krone	July 2016	1,800	—	(1	)
Japanese Yen	959	U.S. Dollar	July 2016	98,000	3	—
British Pound	212	Swedish Krona	July 2016	1,800	1	—
Korean Won	2,298	U.S. Dollar	July 2016	2,705,000	—	(19	)
British Pound	1,560	Euro	July 2016	1,400	17	—
U.S. Dollar	427	Taiwan Dollar	July 2016	13,900	—	(1	)
U.S. Dollar	5,801	Chinese Yuan	July 2016	39,000	—	(67	)
Euro	6,638	U.S. Dollar	July 2016	6,000	—	(26	)
U.S. Dollar	11,729	British Pound	July 2016	8,880	—	(89	)
Singapore Dollar	1,043	U.S. Dollar	July 2016	1,420	1	—
U.S. Dollar	460	Israeli Shekel	July 2016	1,797	—	(1	)
					22	(204	)



	Total Units	Time-Based Units	Stock Grants	Performance-Based Units
Nine months ended June 30, 2016	1,679,591	734,250	85,091	860,250
Nine months ended June 30, 2015	1,484,781	568,750	69,281	846,750



	Shares		Weighted Average Grant-Date Fair Value
Outstanding at September 30, 2015	3,257,413		$	9.95
Granted	1,679,591		10.84
Vested	(1,267,862	)	9.52
Forfeited	(1,153,892	)	11.26
Outstanding at June 30, 2016	2,515,250		$	10.75



	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



	Convertible Debt Securities		Stock Warrants			Contingent Consideration			Total
Balance at September 30, 2015	$	5,337	$	59		$	811		$	6,207
Change in fair value	513		(12		)	(311		)	190
Balance at June 30, 2016	$	5,850	$	47		$	500		$	6,397



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
April 1 — 30, 2016	—	$	—	—
May 1 — 31, 2016	1,264	9.33		1,264
June 1 — 30, 2016	4,185	11.57		4,185
Total	5,449	$	11.01	5,449