Exhibit 99.1
AZENTA, INC.
Revised Financial Information
As previously disclosed on November 12, 2024, Azenta, Inc. (the “Company”) announced that it is pursuing a sale of its B Medical Systems segment, a manufacturer and global distributor of medical refrigeration devices based in Luxembourg. This strategic action is intended to simplify the Company’s portfolio and allow management to focus on driving revenue growth and profitability in its core Sample Management Solutions and Multiomics businesses. The decision followed work by the Company’s Board of Directors to evaluate strategic, operational and financial opportunities to maximize shareholder value.
The Company has concluded that, as of the date of the announcement on November 12, 2024, the B Medical Systems segment met the held-for-sale criteria and qualifies as a discontinued operation under U.S. generally accepted accounting principles (“GAAP”).
In order to assist investors in understanding the impact of the separation of the B Medical Systems segment on the Company’s financial results, the Company is furnishing the following revised unaudited financial information to reflect the separation of the B Medical Systems segment and its classification as a discontinued operation.
The following revised financial information has not been audited and does not include all disclosures required by GAAP. Certain information and disclosures normally included in the Company’s annual and interim consolidated financial statements have been condensed or omitted and, accordingly, the following revised financial information should be read in conjunction with, and not as a substitute for, the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 filed with the U.S. Securities and Exchange Commission (“SEC”) on November 27, 2024, the unaudited financial statements and notes thereto contained in the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2023 filed with the SEC on February 8, 2024, the unaudited financial statements and notes thereto contained in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 filed with the SEC on May 9, 2024 and the unaudited financial statements and notes thereto contained in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the SEC on August 6, 2024.
AZENTA, INC.
CONSOLIDATED BALANCE SHEET
Revised to reflect B Medical Systems as Discontinued Operations
(unaudited)
(In thousands, except share and per share amounts)
| | | September 30, 2024 | |
Assets | | | | |
Current assets | | | | |
Cash and cash equivalents | | $ | 280,030 | |
Short-term marketable securities | | | 151,162 | |
Accounts receivable, net of allowance for expected credit losses | | | 156,273 | |
Inventories | | | 78,923 | |
Short-term restricted cash | | | 2,069 | |
Prepaid expenses and other current assets | | | 75,456 | |
Current assets held for sale | | | 88,894 | |
Total current assets | | | 832,807 | |
Property, plant and equipment, net | | | 155,622 | |
Long-term marketable securities | | | 49,454 | |
Long-term deferred tax assets | | | 837 | |
Operating lease right-of-use assets | | | 60,406 | |
Goodwill | | | 691,409 | |
Intangible assets, net | | | 125,042 | |
Other assets | | | 10,670 | |
Noncurrent assets held for sale | | | 173,794 | |
Total assets | | $ | 2,100,041 | |
Liabilities and stockholders' equity | | | | |
Current liabilities | | | | |
Accounts payable | | $ | 33,344 | |
Deferred revenue | | | 30,493 | |
Accrued warranty and retrofit costs | | | 5,213 | |
Accrued compensation and benefits | | | 27,785 | |
Accrued customer deposits | | | 22,324 | |
Accrued VAT payable | | | 106 | |
Accrued income taxes payable | | | 9,266 | |
Accrued expenses and other current liabilities | | | 46,258 | |
Current liabilities held for sale | | | 30,050 | |
Total current liabilities | | | 204,839 | |
Long-term tax reserves | | | 398 | |
Long-term deferred tax liabilities | | | 18,084 | |
Long-term operating lease liabilities | | | 56,683 | |
Other long-term liabilities | | | 8,874 | |
Noncurrent liabilities held for sale | | | 42,196 | |
Total liabilities | | | 331,074 | |
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, 59,031,953 shares issued and 45,570,084 shares outstanding at September 30, 2024 | | | 590 | |
Additional paid-in capital | | | 505,958 | |
Accumulated other comprehensive loss | | | (13,464 | ) |
Treasury stock, at cost - 13,461,869 shares at September 30, 2024 | | | (200,956 | ) |
Retained earnings | | | 1,476,839 | |
Total stockholder's equity | | | 1,768,967 | |
Total liabilities and stockholders’ equity | | $ | 2,100,041 | |
AZENTA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Revised to reflect B Medical Systems as Discontinued Operations
(unaudited)
(In thousands)
| | | Twelve months ended | | | Three months ended | | | Three months ended | | | Six months ended | | | Three months ended | | | Nine months ended | | | Three months ended | | | Twelve months ended | |
| | | September 30, 2023 | | | December 31, 2023 | | | March 31, 2024 | | | March 31, 2024 | | | June 30, 2024 | | | June 30, 2024 | | | September 30, 2024 | | | September 30, 2024 | |
Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Products | | $ | 176,100 | | | $ | 43,707 | | | $ | 38,772 | | | $ | 82,479 | | | $ | 44,028 | | | $ | 126,507 | | | $ | 47,210 | | | $ | 173,717 | |
Services | | | 375,850 | | | | 98,018 | | | | 97,583 | | | | 195,601 | | | | 100,264 | | | | 295,865 | | | | 103,616 | | | | 399,481 | |
Total revenue | | | 551,950 | | | | 141,725 | | | | 136,355 | | | | 278,080 | | | | 144,292 | | | | 422,372 | | | | 150,826 | | | | 573,198 | |
Cost of revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Products | | | 100,775 | | | | 26,783 | | | | 24,015 | | | | 50,798 | | | | 26,306 | | | | 77,104 | | | | 28,120 | | | | 105,224 | |
Services | | | 208,548 | | | | 53,199 | | | | 51,676 | | | | 104,875 | | | | 52,508 | | | | 157,383 | | | | 53,119 | | | | 210,502 | |
Total cost of revenue | | | 309,323 | | | | 79,982 | | | | 75,691 | | | | 155,673 | | | | 78,814 | | | | 234,487 | | | | 81,239 | | | | 315,726 | |
Gross profit | | | 242,627 | | | | 61,743 | | | | 60,664 | | | | 122,407 | | | | 65,478 | | | | 187,885 | | | | 69,587 | | | | 257,472 | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development | | | 29,910 | | | | 7,313 | | | | 7,733 | | | | 15,046 | | | | 6,911 | | | | 21,957 | | | | 6,864 | | | | 28,821 | |
Selling, general and administrative | | | 268,921 | | | | 69,889 | | | | 69,058 | | | | 138,947 | | | | 63,972 | | | | 202,919 | | | | 64,869 | | | | 267,788 | |
Impairment of intangible assets | | | - | | | | - | | | | 4,658 | | | | 4,658 | | | | - | | | | 4,658 | | | | - | | | | 4,658 | |
Restructuring charges | | | 4,577 | | | | 786 | | | | 3,428 | | | | 4,214 | | | | 1,701 | | | | 5,915 | | | | 851 | | | | 6,766 | |
Total operating expenses | | | 303,408 | | | | 77,988 | | | | 84,877 | | | | 162,865 | | | | 72,584 | | | | 235,449 | | | | 72,584 | | | | 308,033 | |
Operating loss | | | (60,781 | ) | | | (16,245 | ) | | | (24,213 | ) | | | (40,458 | ) | | | (7,106 | ) | | | (47,564 | ) | | | (2,997 | ) | | | (50,561 | ) |
Other income (expense) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income, net | | | 43,541 | | | | 9,955 | | | | 9,479 | | | | 19,434 | | | | 7,925 | | | | 27,359 | | | | 5,532 | | | | 32,891 | |
Other (expense) income, net | | | (2,300 | ) | | | 518 | | | | (268 | ) | | | 250 | | | | (376 | ) | | | (126 | ) | | | (606 | ) | | | (732 | ) |
(Loss) income from continuing operations before income taxes | | | (19,540 | ) | | | (5,772 | ) | | | (15,002 | ) | | | (20,774 | ) | | | 443 | | | | (20,331 | ) | | | 1,929 | | | | (18,402 | ) |
Income tax (benefit) expense | | | (11,880 | ) | | | 1,420 | | | | 1,200 | | | | 2,620 | | | | 600 | | | | 3,220 | | | | 2,017 | | | | 5,237 | |
Loss from continuing operations | | | (7,660 | ) | | | (7,192 | ) | | | (16,202 | ) | | | (23,394 | ) | | | (157 | ) | | | (23,551 | ) | | | (88 | ) | | | (23,639 | ) |
Loss from discontinued operations, net of tax | | | (6,596 | ) | | | (8,532 | ) | | | (120,678 | ) | | | (129,210 | ) | | | (6,424 | ) | | | (135,634 | ) | | | (4,897 | ) | | | (140,531 | ) |
Net loss | | $ | (14,256 | ) | | $ | (15,724 | ) | | $ | (136,880 | ) | | $ | (152,604 | ) | | $ | (6,581 | ) | | $ | (159,185 | ) | | $ | (4,985 | ) | | $ | (164,170 | ) |
Non-GAAP Financial Measures
The following tables provide certain non-GAAP financial information that reflects the separation of the B Medical Systems segment and its classification as a discontinued operation. Non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management adjusts the GAAP results for the impact of amortization of intangible assets, purchase accounting impact on inventory, transformation costs, restructuring charges, goodwill and intangible asset impairments, fair value adjustments to contingent consideration, merger and acquisition costs and costs related to share repurchase, and other unallocated corporate expenses to provide investors better perspective on the results of operations which the Company believes is more comparable to the similar analysis provided by its peers. Management also excludes special charges and gains, such as gains and losses from the sale of assets, certain tax benefits and charges, as well as other gains and charges that are not representative of the normal operations of the business. The tables begin with the most nearly comparable GAAP measure and show the adjustments to such measure to derive the non-GAAP measure. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure.
Revised to reflect B Medical Systems as Discontinued Operations
(unaudited)
| | | Twelve months ended September 30, 2023 | | | Three months ended December 31, 2023 | | | Three months ended March 31, 2024 | | | Six months ended March 31, 2024 | | | Three months ended June 30, 2024 | | | Nine months ended June 30, 2024 | | | Three months ended September 30, 2024 | | | Twelve months ended September 30, 2024 | |
In thousands | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating loss: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating loss from continuing operations | | $ | (60,781 | ) | | $ | (16,245 | ) | | $ | (24,213 | ) | | $ | (40,458 | ) | | $ | (7,106 | ) | | $ | (47,564 | ) | | $ | (2,997 | ) | | $ | (50,561 | ) |
Amortization of completed technology | | | 7,847 | | | | 1,856 | | | | 2,067 | | | | 3,923 | | | | 2,047 | | | | 5,970 | | | | 2,096 | | | | 8,066 | |
Amortization of intangible assets other than completed technology | | | 24,221 | | | | 5,371 | | | | 5,152 | | | | 10,523 | | | | 5,132 | | | | 15,655 | | | | 4,841 | | | | 20,496 | |
Transformation(1) costs | | | (49 | ) | | | 41 | | | | 4,095 | | | | 4,136 | | | | 1,174 | | | | 5,310 | | | | 4,572 | | | | 9,882 | |
Restructuring charges | | | 4,577 | | | | 786 | | | | 3,428 | | | | 4,214 | | | | 1,701 | | | | 5,915 | | | | 851 | | | | 6,766 | |
Impairment of intangible assets | | | - | | | | - | | | | 4,658 | | | | 4,658 | | | | - | | | | 4,658 | | | | - | | | | 4,658 | |
Merger and acquisition costs and costs related to share repurchase(2) | | | 8,962 | | | | 4,321 | | | | 426 | | | | 4,747 | | | | 74 | | | | 4,821 | | | | 53 | | | | 4,874 | |
Rounding adjustments | | | (1 | ) | | | (1 | ) | | | - | | | | (1 | ) | | | (1 | ) | | | (2) | | | | 2 | | | | - | |
Total adjusted operating income (loss) from continuing operations | | $ | (15,224 | ) | | $ | (3,871 | ) | | $ | (4,387 | ) | | $ | (8,258 | ) | | $ | 3,021 | | | $ | (5,237 | ) | | $ | 9,418 | | | $ | 4,181 | |
Adjusted operating income (loss) from discontinued operations | | $ | (40 | ) | | $ | (4,835 | ) | | $ | (1,350 | ) | | $ | (6,185 | ) | | $ | 1,553 | | | $ | (4,632 | ) | | $ | (2,444 | ) | | $ | (7,076 | ) |
(1) | Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company’s operations, processes and systems to permanently alter the Company’s operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company’s 2024 cost reduction plan, and primarily relate to one time asset write-downs associated with changes in technology, one time inventory write-downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design. |
(2) | Includes expenses related to governance-related matters. |
| | | Twelve months ended September 30, 2023 | | | Three months ended December 31, 2023 | | | Three months ended March 31, 2024 | | | Six months ended March 31, 2024 | | | Three months ended June 30, 2024 | | | Nine months ended June 30, 2024 | | | Three months ended September 30, 2024 | | | Twelve months ended September 30, 2024 | |
| In thousands | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
GAAP net loss | | $ | (14,256 | ) | | $ | (15,724 | ) | | $ | (136,880 | ) | | $ | (152,604 | ) | | $ | (6,581 | ) | | $ | (159,185 | ) | | $ | (4,985 | ) | | $ | (164,170 | ) |
Less: Loss from discontinued operations | | | (6,596 | ) | | | (8,532 | ) | | | (120,678 | ) | | | (129,210 | ) | | | (6,424 | ) | | | (135,634 | ) | | | (4,897 | ) | | | (140,531 | ) |
GAAP net loss from continuing operations | | | (7,660 | ) | | | (7,192 | ) | | | (16,202 | ) | | | (23,394 | ) | | | (157 | ) | | | (23,551 | ) | | | (88 | ) | | | (23,639 | ) |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income, net | | | (43,541 | ) | | | (9,955 | ) | | | (9,479 | ) | | | (19,434 | ) | | | (7,925 | ) | | | (27,359 | ) | | | (5,532 | ) | | | (32,891 | ) |
Income tax (benefit) expense | | | (11,880 | ) | | | 1,420 | | | | 1,200 | | | | 2,620 | | | | 600 | | | | 3,220 | | | | 2,017 | | | | 5,237 | |
Depreciation | | | 30,947 | | | | 7,420 | | | | 7,395 | | | | 14,815 | | | | 7,600 | | | | 22,415 | | | | 7,275 | | | | 29,690 | |
Amortization of completed technology | | | 7,847 | | | | 1,856 | | | | 2,067 | | | | 3,923 | | | | 2,047 | | | | 5,970 | | | | 2,096 | | | | 8,066 | |
Amortization of intangible assets other than completed technology | | | 24,221 | | | | 5,371 | | | | 5,152 | | | | 10,523 | | | | 5,132 | | | | 15,655 | | | | 4,841 | | | | 20,496 | |
Earnings before interest, taxes, depreciation, and amortization - continuing operations | | $ | (66 | ) | | $ | (1,080 | ) | | $ | (9,867 | ) | | $ | (10,947 | ) | | $ | 7,297 | | | $ | (3,650 | ) | | $ | 10,609 | | | $ | 6,959 | |
| | | Twelve months ended September 30, 2023 | | | Three months ended December 31, 2023 | | | Three months ended March 31, 2024 | | | Six months ended March 31, 2024 | | | Three months ended June 30, 2024 | | | Nine months ended June 30, 2024 | | | Three months ended September 30, 2024 | | | Twelve months ended September 30, 2024 | |
In thousands | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings before interest, taxes, depreciation, and amortization - continuing operations | | $ | (66 | ) | | $ | (1,080 | ) | | $ | (9,867 | ) | | $ | (10,947 | ) | | $ | 7,297 | | | $ | (3,650 | ) | | $ | 10,609 | | | $ | 6,959 | |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stock-based compensation | | | 8,830 | | | | 3,001 | | | | 5,409 | | | | 8,410 | | | | 3,691 | | | | 12,101 | | | | 1,649 | | | | 13,750 | |
Restructuring charges | | | 4,577 | | | | 786 | | | | 3,428 | | | | 4,214 | | | | 1,701 | | | | 5,915 | | | | 851 | | | | 6,766 | |
Impairment of intangible assets | | | - | | | | - | | | | 4,658 | | | | 4,658 | | | | - | | | | 4,658 | | | | - | | | | 4,658 | |
Merger and acquisition costs and costs related to share repurchase(2) | | | 8,962 | | | | 4,321 | | | | 426 | | | | 4,747 | | | | 74 | | | | 4,821 | | | | 53 | | | | 4,874 | |
| Transformation(1) costs | | | (49 | ) | | | 41 | | | | 4,095 | | | | 4,136 | | | | 1,174 | | | | 5,310 | | | | 4,572 | | | | 9,882 | |
Indemnification asset release | | | (19 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
Adjusted earnings before interest, taxes, depreciation and amortization - continuing operations | | $ | 22,235 | | | $ | 7,069 | | | $ | 8,149 | | | $ | 15,218 | | | $ | 13,937 | | | $ | 29,155 | | | $ | 17,734 | | | $ | 46,889 | |
(1) | Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company’s operations, processes and systems to permanently alter the Company’s operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company’s 2024 cost reduction plan, and primarily relate to one time asset write-downs associated with changes in technology, one time inventory write-downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design. |
(2) | Includes expenses related to governance-related matters. |
| | | Twelve months ended | | | Three months ended | | | Three months ended | | | Six months ended | | | Three months ended | | | Nine months ended | | | Three months ended | | | Twelve months ended | |
| In thousands | | September 30, 2023 | | | December 31, 2023 | | | March 31, 2024 | | | March 31, 2024 | | | June 30, 2024 | | | June 30, 2024 | | | September 30, 2024 | | | September 30, 2024 | |
Revenue from continuing operations | | $ | 551,950 | | | $ | 141,725 | | | $ | 136,355 | | | $ | 278,080 | | | $ | 144,292 | | | $ | 422,372 | | | $ | 150,826 | | | $ | 573,198 | |
Adjusted EBITDA - continuing operations | | | 22,235 | | | | 7,069 | | | | 8,149 | | | | 15,218 | | | | 13,937 | | | | 29,155 | | | | 17,734 | | | | 46,889 | |
Adjusted EBITDA Margin – continuing operations | | | 4 | % | | | 5 | % | | | 6 | % | | | 5 | % | | | 10 | % | | | 7 | % | | | 12 | % | | | 8 | % |
