AZTA - Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Azenta Q3 2022 Financial Results.

During the presentation, all participants will be in listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, August 09, 2022. I will now turn the conference over to Sara Silverman, Head of Investor Relations. ahead. go Please

Sara Silverman

year and today. operator, our to on of everyone conference Thank would good like line fiscal quarter third We for to to the call you, the afternoon XXXX. welcome earnings you

an results identified you to I Our prepared Investor close meaning titled the and the the statements. like XXXX. and the many the issued in forward-looking financial that filings may within future Safe refer and would in data of supplementary various GAAP themselves. We located website of or There be earnings on in remarks these which at but statements results or the our and third no presented more should during viewing I of an complete are on addition to make addition measures Statement, slide financial exclusion with of number with market financial will measures, SEC, when would making GAAP. our occur Azenta PowerPoint are our on We statements annual on call, the financial GAAP Form everyone to of press provide with conjunction, that the PowerPoint We today. to should Form other a on operations from a used differ earnings the understanding our quarter even such remind the and Act available events measures was events the believe Private accordance upon our that release after provide presentation of forward-looking of our differ Harbor reports forward-looking the Harbor release to website the aforementioned of the those performance, Litigation Non-GAAP with Securities non-GAAP including course is XX-K today. aspects we of they XX-Q. reports factors may results Relations today be the our update investors.azenta.com the additional the business. be used non-GAAP considered from of quarterly actual will not to of in of obligation GAAP to, number section statements measures, slides refer that Safe during the and cause relied reconciliation way to in measures presented

estimated constraints or In call insights our we are product to certain of ability These demand addition, today to applications estimates types is refer on deliver based regional COVID-based to On our or demand may such impacts. customer me and/or the on figures indicating with market the Executive our press Officer, announcing Schwartz; President Chief closed, Lindon and Chief Operating McManus; Officer, agreement a Systems. of to acquire signing the our definitive a Robertson. and B Medical Financial release, we Matt Chief Yesterday, issued Steve Officer, separate after

review the quarter third the agreement results, highlights business. we'll the provide the of B Following Medical of and

I'd the the We will to our to Schwartz. Steve call at questions your CEO, over end like prepared then the remarks. that, With turn of take

Steve Schwartz

thank will results and Medical the to half the on today. to this detailed you than portion that for reiterate pending be of a everyone I'd Thank afternoon, B third review call dedicate focus the first acquisition joining quarterly you, usual Sarah. Good we as our quarter Systems. will second us call, longer like and of

more and us third was environment. what continued a challenging for execution reflected Our results quarter

storage we Despite X% the about remain our momentum extremely than storage While perturbation, year-over-year, services growth positive experienced, and for a continued QX our softer driven a which near term results believe in delivered to delivering systems. bit came been we robust still is we've markets, return position solid of us solid the we by profile this growth to will we years. headwinds in and in strong short-term cold many allow organic expected,

We see the needs us we team will engaged and build and ready is to of tackle in fully base. turn provide why say lasting more to suffice infrastructure their out our our customers to the to remarks continue customer it to details later

mission As of the accelerate At QX. environment to roughly Even delivery complex in note and been now the level, with want cold acquisition, both quarter pursuing COVID-XX the the closed well experienced XX% forward of innovative welcome development, impact October, are available is COVID-related team expansion for front terms we XX, cold at to changes in to investment. $XXX the in X% meaningful headwinds, our team the these our in XXXX. several this transactions, for our up still announce ongoing is we yesterday, normalized advance of life-saving to billion organic of critical will global control opportunities turn which from M&A behavior business, both contained and Both Barkey us meaningful business, to was in the critical year-over-year. lower many our when Barkey, M&A for enhance initiatives, impacted portfolio. million we along solution. delivered Medical businesses pipeline our and busy I in rate temperature of results. quarter, up on some we've deploy which periods. to we as acquisition Revenue when additional said chain. results a and therapies as customer we on portfolio July to capabilities you strategic discovery $X the will years, globe. release capabilities a after I leader look operating that provide estimated we that work additions of our I in press have the a B we for of when continue This high to were cash transport close the vaccine and a in will robust highly Azenta headline to growth we've to That but actively the than We're addition Systems, across Medical chain joining in B our point value, the expected people

China. continued benefit earnings environment, business our our negatively shutdowns impacted past revenue that facility roughly in by we've with genomics operating We've increases headwinds that what to QX, late of our this to through April, seeing the but from in customers, experienced as as our quarters, We chain estimate implement a on these the we and supply institutions, majority we Chinese to academic experienced the operations in our which $X.X for a begun respect to logistics on the quarter. inflation. headwinds million onward. period our of will as the offset all Suzhou, lines, in any functioning genomics labor we similar benefit QX the on the seen provided well That On two-week shared to that we're shutdown are and Regarding demand side, continued situation facility I'll then, of demand. COVID last modest call, With closed not comment normally. cause additional Since well extended in business pricing be COVID, in operations, certain to for global particularly in time. an were as issues continued said, China of manage

so as volatility in some remains demand China present. expect COVID We to long continued see

focused have diagnostics cover future. the encouraged have academic which as by consumables environment, we in well near addition, the drop instruments hospitals, small anticipate our acknowledge estimate again we and but and Lindon out in difficult stage and the exposure their customers. with customers. in drop, investors forecast surprise growing and we keenly In early turn the the be roughly in cover in we've as others. the we forecasted Operating order instruments pharma will quarter magnitude to our some fairly McManus to biotech. joined Officer, our pleased making taken built to squarely of small great that the Matt us million earlier present, Overall, biotech, the anticipated revenue progress the QX, another operationally fourth and in question we were a be our saw had companies, yet thirds were patterns as for remarks. addition to been at sequential as in quarter. anti it on additional although to broad market, had customers more as meaningful we Matt on our a turned Overall, a Today, in not government confident the the The to and consumables one QX, million Lindon the the received performance also approximately based trends and growth remain QX over recovering exposure with mix, at us to the We've well year from original give remainder genomics call. we're by to addresses color being market-leading customer of believe I'm we strong capability detail the stage two we the distributors, needs total Matt been and more on guidance is early we has $X quarter our and team. date more than the we on and contemplated $X with We're in in the decrease to a norm although then and Chief is in on performance and financials. Matt decrease will the limited

Matt McManus

the by call work year-over-year. Azenta Since the our our be in I've of with quarter, will to capabilities. The Steve. today. Thank continuously Products decline of we accelerate the to impressed sites around proud segment. our the are travelled I'm enable you, January, joined for our starting the I team many detail and of million doing X% and market. revenue from delivered It's on to business customer's been good breakthroughs results and with That's quarter. $XX of portfolio I've to you I all now more product the provide scientific

ex-COVID double-digit in Excluding cryogenic products-related by services. this stores, The stores was estimated business COVID growth large driven our and XX%. impacts, grew growth

while few nine to Our six outlook record quarters convert as difficult this it's revenue. large gives stores identify our had take in next these business fully the confidence a increased trend, bookings orders a to and for us quarter automated into to months typically

types large into we environments In customers, terms applications. as pharma selling of GXP the more are as with of and customers, clinical repository into well

customer new stations of including by has remains completed a qualification central a This controlled placed ecosystem, order filling pods, we of multi-unit the services. largest one quarter, strong in therapy hospitals. growing cryo production In at chamber the also picking a multiple year-over-year. leading Our mid-teens cryo a of research the our our cryogenic the also business exchange, we aspects Europe leveraged Separately, and Azenta facility. system cryo at cell ever installation country's

pods Azenta with record for great points filling saw also customer. LNX shipments in cryo the entry We of are which stations,

This is which our and business, important other instruments our more Services declined Product of maintenance Our equipment maintenance part customers. a The services, quarter. of an continued warranty year-over-year. parts ensures consumables our spare with provides record which XX% and product continuity had business, and business importantly, post

business As discussed experienced customers. we primarily largest previously, and COVID-related from C&I this $X have quarter, demand has to benefit benefit China fell the the in million the from

saw Americas on instrumentation. as process softness we we regions, work laboratory are believe that a to from well in stalking addition, approval including customers some of taking down longer we're they several took slower hearing investment positions due as factors, two, from to the for as positions, In AMEA larger is supply one; consumables and which that customers

single genomics. of Genomics Our reduced services of delayed year-over-year, million growth up or services A repository work revenue and sample and in low our X% driven business by muted more portion revenue projects. of grew customers scope reported growth digits. $XX

the a for factor citing the spending. cautious uncertainty is current Some market more

facility complexities most during as our our globally recent levels, the quarter. The and proteomics China by in to are situation April, the ordering customer's grew softer sequencing Amplicon-EZ new was Synthesis well which logistics reflected demand terrific as X% The offering, year-over-year, European efficient generation great with seeing traction for customers. sequencing impacted in well COVID our lockdown we latter new as launch our the chemistry, has our business been impacted of continued offerings bringing in added both the Next while deceleration an China. as by

gene small, capability US, but for be production growing believe we us asset synthesis the have future. which in will a a significant We in the

launch to expand to continue touchpoints. customer we offerings addition, our service In new

trials. important with and our expanded strength protein clinical to high primarily pre-clinical our X% packaging portfolio, in situation declined the momentum throughput supporting in generation, COVID year-over-year, for cores. This genomics were primarily saw in an customers, where academics biotech not Sanger quarter, services baculovirus China, many revenue especially orders. placing due of driven by services clinical we and our expression viral pharma We continued to tool

COVID repository the year-over-year, see of in increase and business China grew return this continued we in by storage driven stored. core in revenue situation The solutions Assuming and customer improves, a XX% demand QX. number expect sample samples the to

on gene XX% and The gene additional our grew well cell we expand therapy therapy and to patient end materials a way the will important quarter. is growth in large facility thawing is a add our XXX with I GLP revenue the securing addition patient. their which and out boasts to our business about engine Indianapolis our installed the going Indianapolis are AAV-ITR and to in revenue time as continue work an controlled manufactured and provide preclinical team that the in added continues they SRS of for to rate capacity visit all in The our for and business, rate we research product, Barkey raw deals genuinely cell enables Cell extend cell platform research this Barkey We services over our dedicated business customers cryopreserve additional newly customers key product what digits with point say leader cell the automated with representing storage recently provides to continues and impressed for approximately from store. offering. serve facility, gene and They our is when a control initial that the used to gene year-over-year. growth. Most Genomics, of is R&D last cell clinical us a discovery and be relationship and double products, to end beyond therapy therapy gene therapy the confidence now which I'll pipeline to they build of can see targeted our and all make stage. service The and new of therapies. customers. Plasma-Therm applications

as our to move in pleased larger our in in the laboratory These July, state-of-the-art and room report our and a to for also are our significant we that well capacity growth. for moves future strategic Boston our additional new milestones business, I'm facility China Finally, area Suzhou, in our completed in laboratory to expand Both June. customers, our investments significantly as provide employees.

our applications to the may acknowledge and portfolio term, As potential clear. and critical quarter challenges we beyond, ahead look fourth but near over continue market we the that is the immense of

continue Azenta sciences I customers a As life is deliver our early the we very to view of turn standalone company, of call and will we to unique the days to value Lindon. the what this opportunity. will now over

Lindon Robertson

refer available now I back the to from Matt. slide slide website, you, the three, to points review some Thank our you on deck to quarter. turning

to in particularly negatively provided a growth China of we at over you by and change they currency. points rate of XX the Suzhou, exchange when April year. from experienced the the us the which grew year severe combination QX and total, from COVID past, was for affected comparing we site. revenue this the internal comparison organically, points COVID another unquestionably in quarter, that quarter was In that site our to three but internally, faced due impacted estimate a for X% earlier. X% have prior challenging from of growth to in month foreign adjusts each is we factors organic And shutdown Third year External get COVID the demands quarter as X% a headwinds external the a the headwinds. and year, currency, to

additional ended X% simply sheet. segments. larger of higher point segment now services on revenue. of content actually organically. billion in and B reported agreement X% these Systems the through as impact $X.XX announced grew that the $X.X quarter of operations will balance the funded highlight X% we year-over-year detailed But with for on on European year-over-year. be year-over-year, cash per on The provide And Medical Non-GAAP X% from in from acquire -- will over the as I We $X and decline the was products the a step basis. will hand. an to impacts color is its organic cash sequentially up We this continuing results Product Barkey share organic due up acquisition and an to five based was flat reported X% The on segment of and the earnings

expected the carries a on first Slide P&L in tax such bottom on in the tax pre-tax accrued the we GAAP sensitive M&A had expectations GAAP second negative full On is positive X, an with always quarterly left the related line year Moving the highly the basis, is the this projection. a to differences year side do page, difference in half. quarter early expenses. accrual When rate significant the SG&A to of More and year the half, for tax full amortization to traditional as this income on you the in in the adjustment line.

As the our and in you cost, quarter. expected line with see down sensitivity M&A brought the projected full year top current results this is quarter,

side P&L performance. Now the X% million for third of $XXX year-over-year. let's was the revenue page quarter the non-GAAP color the into look right on the up on additional for Total

the organic guidance. XXXX. headwind was $XX million initial in effects the roughly estimate exchange. net mentioned, of revenue point quarter two on currency X%, million compared excludes head million our third we COVID We from had in As QX points three $X positive in growth in which the revenue anticipated in than to QX approximately more quarter $XX QX foreign The went was from and

This works but It that in strong are margin. are each $X.X substantially. from the million in the performance-based grow, and lower, Operating Overall, driven COVID $X.X business, gross the our revenue segments. is pressure expectations, fourth ways. lack declined the in impacts of million of with included reflecting the dollars accruals believe of year-to-date April $X headwinds was headwind and that we XX.X% future million We of quarter-over-quarter, services our vaccines. was our I impact the and with comprised would as saw are leverage both for million environment. in reflecting, an primarily margin approximately revenue from positive operational included it the Repository $X COVID in These consumables model, quarter's are which But demand and expense Sample in we was the when in some the the services less million base, confident this of business, revenue by described prior a indeed guidance. impact as in $X extra total come we the our demand. in industry, million adjustment The our the in China expansion in the for these impact in of emphasize of back our business also EBITDA of our XXX million early we growth. Gross expected to growth demand million customer by from approximately quarter had margin managing a is we takes margin lowering COVID quarter-to-quarter, $X on down was third margin accruals lower margin COVID reduced back genomic temporary, this lockdown down negative leverage customer quarter. and million well XX.X% which operating COVID expansion the revenue extended and The situation. instruments delivering our basis we driven $X than related was $X quarter; this approximately business estimated expected margin points Adjusted up in a $X in and a approximately reflecting Solutions results lower leverage compensation. comes periods, QX as lockdowns was run accelerates estimated we our a

Product describe to million results. of Life bridge. graphic to will X year-over-year. Turning product can $XX in segment a the I review our you for revenue Sciences Slide of business Slide X% If I down delivered The refer X, the

we year or a from over $X a grew currency XX% Product million year-over-year. the year. the a $X constant Within Excluding drop saw C&I, impacts segment million at X% decline of currency,

We within an million an or dismiss We C&I increase I the have decline we line. of The Not on demand growth surprises, systems continue at have $X the had currency in related but estimated to services. and constant COVID growth. non-COVID highlight, tubes has approximately performance XX% mid-single in want from to services. in do seen million systems XX% and demands approximate to strong $X digit

Matt into the to which feed saw revenue XXXX. bookings quarter, we As backlog the in highlighted, significant continues for

XXX us $X our products, only lower the systems year-over-year. lower The instruments there XX.X% C&I in dropped X.X% less and the as highly EBITDA mix which So and quarter, as high see in softness consumables we we margin two was are margin hit differentiated favorable of continued gross leverage and businesses, see QX key therapy, cell in will of of sciences QX, the continue and life demand to points as saw The and expected business higher significantly automated look forward. to supporting provide margin. of In we C&I margin messages and storage we peak the the X.X%. leads gross and for services in QX amounts than this basis demand margin but average does value cryo The reflects operating and gene a million. $X QX than growth. lower trend minimal trend million see COVID includes The perhaps

expect over fourth million to revenue. million of For million $XX of C&I we year will COVID $X C&I That would reported only to in to business see $XX XX% we X% year-over-year. bringing compared million year quarter, approximate drop ago, year. carry XX% about to of be a to decline our the demand $XX anticipate an a We

positive growth the growth Barkey approximately organic a rate of or where the However, controlled our expect half this to automation XX% automated offerings. with we of from half and momentum services, see continue from to thawing in systems we related see addition

currency carries total year-over-year. projected drag X.X an point products growth from of approximate Our

COVID of up foreign compared $X services services excluding Sciences Next, X% X% business a $XX please impact of and the stream. I year-over-year. a in our declined the line explanation, More which headwinds, of other did for $X turn page Asia services, $X the currency. than lockdowns million review million million was Page remiss exchange this it the year-over-year, was to The lab to synthesis million was reporting delivered of quarter the of repository headwind over After largest $XX repository $X partially million included if is XXXX of the revenue in million $X Genomic in this generated color graphic solutions. million $X.X services. most year-to-year million of not by The year or $X million up evident currency approximately on strong from that decline decline sequential sequencing, add $X $X our vaccine within of revenue continued The or contributor X impacted but all by to XX% not segment numbers approximately third would million $X.X at chart. negative services in was a of I the remaining sample Life $X driven generation drop top in negative estimated next Sample a in revenue storage of million. million the be genomics. management million year revenue up results, in China the services $X $X constant quarter, genomics We was delivered for rates. headwind quarter a of and a X% million million did add positive mitigated where $XX core the COVID us. growth the million in the on solutions

enterprise quarter, points was and top second EBITDA on Slide down this $X gross margin at see line but Gross was segment, business space. segment X, graphic leverage on in XXX As by one global for significantly margin constant the significantly from and biological you the sample basis year-over-year. XX% storage million head XX.X%. revenue. growth partnerships the growth margin currency, the Service the Adjusted can decline we growth lower cost, driven was driven labor basis with XXX by year-over-year have of contribute in points down Services the of genomics

Solutions quarter, X% in, put providing we the revenue business Sample headwind year-over-year into fourth expansion demand XX improved $million do we from genomics and look foreign to and exchange. $XX be the to of a estimate All three growth flat Repository we As see of to million the point sequential upon approximately inclusive is business.

the Capital we X turn $XXX review by Let's the to line, you gain on flow primarily had sale summary driven in Slide free on cash of excess the that cash, cash a taxes million At of use can to of flows. paid in totaled semiconductor the the see in the our now We are the expenditures million. in automation project fourth Suzhou, on made China business. quarter Final that on space. construction from quarter. expected $XX be completed first operating new in capital expenditures of phase and the headquarter the this are to

Slide review Let's sheet. turn X to the balance to

XX, $X.X June we As of restricted outstanding. of securities billion had cash, cash and marketable with no debt

which net the currency investment balance is for increase other had in to the translation I primarily our the of the tax the The business. semi in mentioned decrease an other sheet, you for hedge. reflects due down see liabilities move current that assets, payments As you'll current adjustment sale

to continuing of range fourth Revenue expected $XXX of a the X for our Slide for quarter of million operations the million a decline in to be guidance approximately X% year-over-year. $XXX supporting midpoint to on Turning XXXX. fiscal with

We $XX million, midpoint supporting the X% revenue in X% decline expect a range to to $XX a services of range products the rate being $XX and approximately be supporting of to the $XX in of at midpoint. at million, the growth million of approximately million

capabilities. in level revenue in ni-based and of percentage of a XXXX. management COVID-based the million reach be headwinds repository The the of fourth having expansion of our quarter this quarter a to highlight year-over-year is that continued making operating Barque $X approximately vaccine expected solutions points some acquisition projecting chain three be points $XX genomics. four will global and in to of headwind expected portfolio of million China COVID reflects is we strategic relief light exchange fourth to revenue, approximately initiatives I investments certain to of million in compared growth. to sample want approximately Foreign quarter significant Overall, with $X the in also for of the are cold lower in and expenses we

quarter, per You expense the accelerate initiatives. this $X million expect to prior another and to EBITDA addition should will $X.XX accruals $X share. consideration, and to now, expense our variable implications I to the quarter is of to the in call about operating earnings to expect, you this acquisitions, these turn this new our be approximately to be talk $X With we share higher will the $XX coming back to When Barkey minutes Non-GAAP per few million. to $X.XX million for million the Medical the we spend compensation, Steve of System. in with $X million over a fourth expected address a investments operating the back adjusted change acquisition to of I'll quarter. in be structure, but be in anticipated in combined compared with is to

Steve Schwartz

turn in B this global they as the B every vaccine, temperature do years. control please Slide to most with Everyone, leader of the Lindon. some a of the to XX in I'm acquisition you you, presentation. critical of discuss Systems, medical Thank and links cold the Medical very part XX for lives and chain drives embraced been mission transport Across more purpose, which systems they've than all the that of they've solutions. pleased

our we've have perfectly our unique opportunities and believe fits asset As at and we've development therapeutics. help been a in M&A Systems, of goals saving evaluating delivery customers discovery, we multiple B we quarters, found into accelerate life Azenta that Medical in to past discussed actively

solutions. multiple dimensions Azenta extend In addition, will provide B add capability to that further cold our Medical global chain and capabilities

globe. business you'll the critical is hear people their remarks, of treatments delivery to As mission across enabling in in my

see and part we Like Medical in has focused is part deliver that climates The track innovation on meet faster, the regions. the of has only business Azenta, and most company of and that discovery R&D but customers the additional incredible challenging a some opportunity a needs vaccines its story. in remote to that's is innovation of investment reliably faster to challenging will demanding grow happening As Scientific and further. Azenta, record investments expand even B for of possible. company what's itself prides this of a

Organization, When effectively the possible. cold is You way a makes and markets treatments B solutions what still Foundation, and prevent need is of in the as I I global rather superior known with receive therapies last XXX its B mission than anywhere, cold necessity vaccine have entrusted of enabling say to as are a to chain delivery deliver Systems access. these to relationships anyone. cold solutions patient sure B be a Gates Gavi, leader Reliable chain the serve suppliers they not testament accomplish in there say to anytime others, any they everyone, I supports referring last mile to need otherwise health to the natural these time, mile of To the Celsius Bill themselves World life continuity and of to service well dependably. are market some treatments Melinda or anyone, capabilities enduring When of ensure Medical organizations to cures Medical Health establish be with a preeminent forged unavailable, exceed and to the globe which temporarily The groups, vaccines lifesaving with aid electricity lifesaving and mean areas will which The threatening they this, Medical the Fahrenheit have traceable delivered these institutions core to as anywhere, the critical in including disaster. worldwide. that medical in degrees diseases the areas most backing & that there's to where chain limited And XX roads, cell routinely as to as should said hundreds in and cold rugged for such into prestigious may that the and the a children where of as solutions and situations countries the scale. UNICEF, of I'm say electricity, the chain, mission for of phone paved be temperatures make I infrastructure, remote on is of business, might such

which of government talented lives to receives access benefits, Medical Ministry been promote a and strong Ministry in very Affairs. with we've ecosystem headquartered grand to and Humanitarian growth. one to B Medical's We see the of Economy support support a that of globally. it's significant favorable because The mission very invest a duchy workforce from for Cooperation innovation as includes support and including Luxembourg. we'll business Luxemburg this thoroughly and and environment B This addition, saving offers highly significant the Development In of continue in impressed the

installed XX% chain, more X% account roughly The to XXX,XXX The consists rich a cold across therapeutic journey. business Turning into the today to blood leadership than let more last sub provide and employees. of They which business is revenue, cold management and market, me units medical revenue. is robust to three which to represents business These lines. transport, end vaccine XX, of Slide line on B product of XX% Medical for and monitoring. their base which vaccine divided around $XXX chain us its including all of temperature an have for brings chain of segments, than history vaccine cold including protect bit more of XX-year B detail of in solutions vaccine its a location business Medical the into refrigeration, end revenue and systems, reliable the until real-time lines are mile lines. about

is B served Part transport technology years, for has only temperature durable, control industry Medical Their in developing times. reliable reliability. B but out times certain the enabling guarantees molded manufacturing long life-saving cases, in what ensure corrosion-free are at materials, state-of-the-art their market delivery to average. dedicated to facilities three Their the the materials and and they're many freezers also Luxembourg India. makes of innovative Medical product roto of are transport leading unique using to that not world For of

medical the is with Medical approvals device in and EU. addition, already in their In products regulatory B leading and its US certified approvals are

many and see slide, generates in As Africa. partners you customers can Medical and this B mainly the on recognizable has but globe, Asia and across revenue

XX, we that cold market Turning technologies this about is market chain development serve medicines today has participates more talk advanced tremendous and a in utilize require in the opportunity such think novel solutions. significant they for The Medical want that to why and B to Azenta. cold I Slide chain needs. More

importance and transport. $XX the list it's industry issues. to world billion of organizations And cold of of essential temperature-related give of that sense pharmaceutical the a of from require Just upwards here, losses storage are of reported than magnitude XX% annual health you more medicines the

the to cold we course, a there. and COVID-XX chain Of spotlight vaccine on the expect mRNA continued opened see Therapeutics put the and door for investment

On vibrant incremental we B did, services. market of new potential launch COVID-XX, in became to vaccines XXXX, the this value same transport more business that their to we helped for to requiring of Bio and products with readily sample from business and cold see genomic to but is temperature We chain, topic strong acquired drive interrogation we'll Storage ourselves available for just much profile that Medical demand outsource company Technologies into the I'll into with the that. make B growth for the the in of drive Medical but when leverage vision awareness in countries. that opportunities tremendous the space as the capabilities type we need portfolio value high great in in and Medical, solutions a with as see its acquired for an repository On so products developing bio Azenta combined a more market samples our we to when own COVID than of sensitive reliable new a did gene B is increase the their mention think investments a

Slide to let many outline opportunities XX level. opportunities three examples of those high a that of roadmap. I are of just give currently at on me our some Turning

cold but systems development about that built air join reporting, into factor configured mile, using engineering for form current up Medical of transport proven The large handle first products up from last and are sample Using solutions the for be location to already technologies highly market capabilities. cold configurable expansion in geared Think with cargo purpose this can and transportation. the vaccine in as size miles to chain just journey. solutions both a transport beyond single very for opportunities more durable, delivery. all teams chain the is our B cold to not current ground other chain highly the cold and potentially We're temperature

B services in Second, but the the are B sample that health touch country; human local in in of laboratory our can in biological ultimately chain countries health Azenta only where and studied of incremental the Most our opportunity last this refrigeration an in are in local is particular a as of of B utilized and they can footprint in from human be the for development it's cold billion and systems the benefit collections of of for part our outbound our into population looking for be return already these to research XX% as mild link repository build population also emerging first the health as service. a developing three vaccine cold cold global of a to our future an fast for critical trip other banked any which a treatments. finally, a the to as and markets, the markets. B deserving in and as not out people learn Medical the Medical eager Medical chain And sphere distribution, finally brings are advanced We're for investment the used bio products growing truly population last located company infrastructure in genomics devices link we vaccine Medical the approximately world's portfolio. colleagues serve people, new world best to and human have access the forward offerings accelerate

exceptional to deliver exceptional an with team on B company, combined join is global faster. the for reliable products Finally, an base, met business the purpose-driven we're particularly to and has proud that's and our have which and breakthroughs team This purpose now a to dedicated of challenges chance the built employee demands innovative we're enthusiastic leadership human for health. the and bring Medical this about and

presentation Now, financials let the detail. turn the transaction in Lindon more back who to me will cover

Lindon Robertson

Steve. you, Thank

which of expect earnout, of which Slide XXXX of to based from The year Moving in and up will approximately Systems. for our we Europe some be more first hold on Medical price a want a will cash B the deposits, a paid fiscal profile highlight consideration to at close year. I to our €XXX fiscal to details the XXXX, The transaction funded to little October, performance which an tied million, additional million is month we in to XXXX. closing comes span €XX cash our and euros at be XX, acquisition transaction

will revenue In adjusted XX% terms sales company growth, support million it. We of a business public growth continue well bring investments immediately. profitable development, to generated $XXX appropriate Their to over Medical B as EBITDA support to statements the planned the them and reflected as months into we structure. company XX. last portfolio G&A profile of past financial into which full the XX begin June certainly do have has as support year These the measure will

XXXX. transaction a the year expect year basis be coming by and to We with non-GAAP in basis fiscal a fiscal investment on accretive on GAAP this

due skewed toward As nature you the segment gross updating will I and revenue product margins the the comparable in government that and timing December about This think part are of add is more is models, spending. our to your quite the quarter.

B earnings We will call provide later fiscal some this year. further Medical expectations for yearend on our guidance

our running of pace extending the over broad annual an This revenue of significant and leadership expansion growth with markets with further a at with the portfolio. opportunities. $XXX With revenue challenge, more Medical, reach margin B enhanced covers cold be we with and position comes million addition across chain will of

XXXX the XXXX. now to and Regarding fiscal model later on plan updates target model, off revisit our we'll in hold for

We a give the with course, added for will of you horizon. discussions. our have of will and complete outline today's more three messages wrap from what up we I acquisitions picture

base business not this at level estimated the change model, and some sway but potential. does we timeline from potentially our sets margin the for point revenue It in of us a the the than expansion capability of EBITDA our us does growth a XXXX, the exit back business. First, conviction while running of on and for not lower is

list. we taking our position, but customer and extend excited that our objectives importantly, expanding valuable customer Second, needs. make capabilities leadership existing more both their with be more add us They to are current They strategic Barkey and B Medical. our and to in fit

some Finally, we for accelerating are investments strategic growth.

We portfolio. within will strategic and of further businesses this the these possibilities within our initiatives, initiate unlock to some to do

and continue the All that as you well reshape of model on our will as clarity give and investments. points performance of organic we these acquisitions our to will

for in the have and still the cash team billion another capital and we sheet support to deployment $X and on have capabilities platform right the opportunities balance additional we course, Of more operator I us the that, call I thank call back the across turn for joining and globe. would for like everyone customers to With the the over on to will today, questions.

Operator

instructions] from Please [Operator is Jacob Our first ahead. go question Stephens. with Johnson

Jacob Johnson

any I how think they for helpful were years? Steve, us benefit COVID much how Thanks it's you there guess afternoon. we first, as questions. crystal of around alternatively, growing have just the taking if doing be maybe framework to some at quantify last you think way B helpful Is Medical. about kind good I Hey, to any quantify that talked some in for from tough that think could? but vaccines revenue the been a ball couple of COVID COVID-related has it'd business ahead, to I or

Steve Schwartz

I because about worthwhile it's question important it's But COVID. think an

knew and of market includes, a for chain able it's Let close been to. exceptional with known start company we've them they've just cold did lot and an satisfying before to and we've vaccine progress this handled been -- years themselves, a is We've a me company watch and the how COVID. job tremendous we

kinds deliver, and handle They up the from to responded that product ought a So that and shipments were of COVID large came to demand reaction things we company them and to watched world did in and to exactly every the able they volumes of to a stepped the market. do.

But approximately forecast revenue earnings for and call, less it'll crisp other current So million XXXX, ought XXXX, as let for little very in than the $X me right current in attribute again, as the They it the talk XXXX because of the revenue. $XX than we're forecast, be incorporate when words, much we'll ought information the we'll give in company we more owners, in to in you we the this next to here yet did now, put XXXX perspective COVID and in perspective, to In at not COVID. up but they million COVID. COVID.

anticipate idea, that So everyone in part the both COVID deliver we're their in on to XXXX coming performance, that's COVID really terms of XXXX. and entities contribution just really so give change the was the result company COVID We able in quality revenue is almost things. to reason who a One toward generally. is as higher the really was were part now put just the and significant couple alert from of an of a you funding comes shook COVID what strong readiness and growth number by and and readiness of about alert current the strong of indeed that no volume of and the markets the pandemic help pandemic a vaccines seeing forecast, to

opportunities quantified that coming of do investments but to satisfy So we we're, specifically, we, the a exist cold bullish out vaccine across serve. COVID and, do the the markets company the little and the that because we generally we're need pandemic for we see bit vaccines preparedness

hope I that's helpful. So

Jacob Johnson

that I they customer That's how about customer organizations base follow today? kind helpful, then have. with the end you, you sounds talk end B and overlaps and Yeah. of It about customer one government on, involved. up guess, existing Steve, non-profits talk just on Steve, Medical, just again like maybe your some can Can just, the there's super and

Steve Schwartz

Sure.

countries, various funding the for qualifies investment. between for. The Often today funds, and count the So of vaccinated for need and to people countries drive is who help to the in of will as specific the funds the what who receipt the these are manage are purchasing distribution we product. agencies about an mechanism ultimately to that you provide and governments, if XXX agent various UNICEF various the customers the obviously, in often will, patients or forums is the the And countries. cared on aid depending of

populations, its So the working aid a taking for of care particularly majority with a of going construct for intermediary. their contact years. operates many, of that in The agencies, an but through point the well, our there's business. and mechanism generally place, existed That's that many countries that's in individual company configuration

Jacob Johnson

got there. Okay, I'll it. leave Steve. it Thanks,

Operator

[Operator Paul KeyBanc. go instructions] Next with Please question Knight ahead. is from

Paul Knight

last million €XXX ending that months The XX Steve. is June?

Steve Schwartz

ending trailing correct XX million €XXX the €XXX price. revenue. purchase the months is the, is is June, million

Paul Knight

have thoughts you on And any growth rate what is normalized do there? a

Lindon Robertson

Paul giving a been to around a we and lot and Yeah. lot forward there's assessing for there's COVID a our with look a be highlighted, really expectations more Steve us us model markets we're color in double-digit as to downs, demanding and strong those recent the that times grower ups growth more. but

Paul Knight

think Does the like X% of business it, way I impact is says from away on kind to XX% June your relative the ex-COVID walk that to slideshow guess about of COVID, negative kind and I currency. continuing is right, quarter XX% from the growth, plus impact ex mean type think FX?

Lindon Robertson

that's right. Yeah,

remove had, we this estimation currency reported you just a take X% on I is approximately constant out ago, think the right. the our if COVID you impact XX%. currency captured and X% grew you then organic remove it underlying if the the year, impact a year COVID business in basis from

Operator

your Next line's is with open. Vijay question ISI from Evercore and Kumar

Vijay Kumar

my question. Hey guys. Thanks for taking

we flattish so how Just in Lin FX on perhaps midpoint kind X% seeing of acquisitions your revenues, offset each and the guidance are to, here, like guidance other of QX Like I organic for I'm revenue and guiding in that I seem $XX QX. revenue implies to organic. ex QX, your I understand, LRP growth. code X% perhaps high think a right teens in there's headwind think QX? was million you're like, Does assuming that

is lockdowns, up, that is China demand opened my understanding normalizing. Your has market

we So looking are almost QX? zero why organic at here

Lindon Robertson

Yeah.

still comparison a the that. also do we is the ago, And There from FX have right. you're baked into So year COVID. implications on

systems out there, we away take you doesn't the expectations in products on continue gives compares detriment but our services, and revenue biggest is in going it is a What highlight half. are on than first back would you So organic back number. the CNI. FX, I that when what lower into the COVID be but that our don't the second organic, COVID we to to the the trend see The that have systems out implications but the coming on growth strong been

products and to X% you that's there the the biggest So, get midpoint down range that's of where detriment.

what solid It some services the sequentially it we're side growth while have seeing SRS table we're satisfied sequentially lower we some expansion we're will and still expect. still -- with expansion to continues side the the potential, we're growth, the On on here. not it's numbers but than show putting on on there genomic

the of has expansion also most buyers the to recognition we'd and concluding expanding this, at the unique encouraging ramped X brand that account us a the the that rebranding, not the representation then Azenta softened to as genomic accounts to customer of customer In was we words, make unique by we're indicates growth our the withdrawal Let what not where we're that that in QX, presence. a because We're we imagine PIs dull to second that. carry is think really a ourselves PIs have all And really that, our stability behavior. really we purchase that. color Whether We us the them space, they reflect me going QX gene to see Azenta we other strong bit has to see authorized Azenta bit, the dollars a we're from customer that add our because spend effect haven't a marketing, and latitude we team efforts through providing well, look solid set marketing little investment order. transitioning data we the continued underneath especially then very with reflect counts, customer something customer buyers curve, seeing be relook accounts ourselves? what of unique level, seen we see in underneath say, we're sure and the what pretty but can buyers teammates, started we've are or with but looking places, -- and on slower That's at the have on customer you we what genomics expand. the fact a from one. the to in crawled fluid noted, there. In of we guessing or unique and for underneath that many impacted buying QX bit our and In and

in a range currency Europe in well, as I'll to obviously the US basis Now, in constant terms of geographics, the single a We X% rate in X% think give more genomics at in you digits I'mI'm here. genomics an high at and little and space sticking color. had to organic

seen X% total. strong that X% the reflective wasn't, it on the you're not double-digit in the that it's at to So the the space past, we've wasn't line bottom in there X% of right but seeing that the

June think was in strengthening were some What we we China down continue seen the that expect impacts see a relief there. China. space. in QX. And do a do show pulled to actually of we in where We through momentum in back. reason see weekly bit So don't We've -- QX? order on we recovery in the seen load particularly think that's some pull and a NGS -- to July the seen basis have month going We've we've that to we

a at clear as of expansion at we of a end, the we So midpoint range more provided with the recognize to us. here expansion here, bit little line upper but also isn't sight

So we get -- a that we put level. range around

base.. base little putting our We're this expanding keep Vijay, table and in customer can. seeding far the as across participation disappointed as will transparent as we thus and exactly, be what what the we in clear can strength a pullback spending pre-announcement in, we you and with bit we'll on here, of forward. seeing market but the called you've as were always we're what So out the

Vijay Kumar

for right? clarify million incremental that parts just million QX have probably QX headwinds. to have three $XXX here M&A $X million headwind $XXX sorry a in four COVID in is going just, then there And you Lindon, Are numbers, to moving other of in the to million. And be to of $XX $X I FX, points to any revenues million.

Lindon Robertson

expanding other parts a which you've on the sequential and will your is products [ph] captured products then differentiated gives moving be highlight you excluding Barkey We, think and to slightly Not services will that softer, would basis. upwards. be I is touch what, than in dynamics net Archy just the

Vijay Kumar

the may the it's $X.XX. about I Then one, midpoint, EPS at if QX on that For here, guidance

and imply revenues we and a How year-on-year I up margin high would EPS think So that year. doubles. your on analyst singles, low had guess year to $X.XX. annual -- degradation the of maybe your we a even it's implies had here there, going That's I margin guidance decline perhaps do the and in a be LRPA an targets, we reported basis,

through last walk, change just you firm? months three can So Lindon, the the on what in us margin six to

Lindon Robertson

when Yeah, sequentially, has but volume, down brings we it leverage -- you so just definitely also did. line slip with pulls like you top

in it'll the takes continue less And the approximately which I leverage to you that these of us the similar levels. level we've the revenue drop similar the think $XXX year, It'll these this and revenue at the We'll way over the be at saw are see puts million inflation, basis. margin. with in but the I'm so situation. on but in margin on level range, that, gross at months, but be year, There a to down. on bites labor sequential described in sequential We recent the

top efforts in obviously line. two Our fronts, growth are

we to I this have stranger we then areas, and continue some terms in us And do manufacturing that to space. is you that why continues because we exercise we Secondly, cost for our that's pricing in here. the side. the will for cost delivered in customers. the talent of battle the services to no In that tell pay

I'll growth operations coming big we've avoid price a forward we're geared as not as we there pull gross the the the update investments, at Obviously And bit efficiencies expense So revenue is that move we performance that'll what well, the going through in quarter. XXXX. gross under think. margin here. and year. for we'll the your we conviction of strongest control. looks for investments here the to but in time we'll on it, this the highlighted is little operating the have we, in second you but take say second question, down year and have come our to fiscal this looking we end help right margin the what half then but the Operating at we're into ever for expense is space in see on same is we're say of stable see At the investment tight I'll

Operator

instructions] with David Needham Next from open. is Saxon [Operator question is your and line

David Saxon

on Steven, for maybe questions, on Lindon. Good the afternoon, Yeah. the base deals. one the one business, Thanks taking

samples SRS you So first out called increasing under management. just on one,

out. there why can customer sequentially on in an the it of pipeline any kind then you'd were So, just update third, just And the down strength of factors call curious there? was give also, you the

Steve Schwartz

any So as of These business saw because services we first in in the a expansion collecting are subscribed kid a XX% year. to representative but a basis, services, we add we've -- little sequential the take the samples. softness there. today enterprise parcel and are obviously, see are logistics the in not storage informatics. show the the gathered We we SRS and growth people storage of storage. The year data managing are provide these the yet to partnerships of On [ph] business over in we slightly that value services pure don't did that this

the has expand. get to We've had seen you this continues past year. million just that from that business over $X So away can't climb the

So to flatness we expect. more we we into that the continue other business. that offerings continue the to you're calling the and that momentum in out But sequential that is fourth see quarter that around see capture there we'll

rest then and of and of come on question pause the the one of question. me me rest remind your back to Let that your

David Saxon

last I contracts. over some announced the guess the around pipeline. Yeah, so just year or you, larger

we if So in front? could on near expect future that just anything the wondering,

Steve Schwartz

do through half the have that's storage. already contributed see contracts So to pipeline second we We've significant coming expect. strong what's to one, continued and we into signed come and

it answer, by Again, absolutely. SRS on results yes, not the the all So of net deterred the is the at we're quarter-to-quarter Yes. business.

Lindon Robertson

good basis we a the us send on I daily do partnership point look to asset advance relationships or bringing underscore. the their across When what a the SRS standout database. would and by hold business, their we of business is for foundation I where them in the say, we can out it's a with to assets, this assets research pieces business of performer customers that those just a you for just is in they communication their think terms have, what at services

highlighted of I customer customer transaction, the volume expanded formal time and accounts. foundation But It's high terms relationships the I turn at to as transactional. short needs long lasting lead time and there the too order the it refer our around in so it is high it's On at pre-announcement, genomics, period. highly the, in represents and

As change said, that's based right I assessments. think spending I behavior a our now on

cryo again XX% product On the XX%, and a products have gangbuster, growth site, the very differentiated including strong that rates just systems, we ultra-cold expansion. store grew sequential year-over-year

well C&I about our had going last we thirds of our thirds of down at say to continue We year. it side, just pipeline very had be This revenue when two quarter as strong revenue. But at our being, I best grown to this that brings as products bookings. to on be two highlight. see in into to books -- XXXX We proved point

less. revenue just to we went a being of back little down Now, half our

as we're continue to We'll So it we'll to we'll market. I'm tune but continue take C&I that sorry, portfolio, Covid, take is.

steam. really differentiate differentiated it, is leadership of true this course are, that extend a capability, of customers solidify what IP, products, where where Barkey but the differentiated say we investment Systems And both all is for there. all to marketing C&I, invest we So customers B in I our behind frankly, just of our that put we When large us in our our our is small the Medical think and reliability. and is continues and on cryo count customers enterprise

I the appreciate can pause really I I'll if that anything customer there or the I So on about. see clarify see, and question. rambled

David Saxon

helpful. No, Lindon. Thanks that was super

Thanks margin kind can thinking, any us give on again, one a of is Lindon, it's the on -- any there profile. around much. and growth are deal, your for color is just in revenue Medical, any profile know combined or I cost so energies the then probably smaller revenue there but assumed you Next you entity B Barkey, and

Lindon Robertson

to good One under and thorough filter. them, were went base. described Yeah, models innovate our a synergies, the them. question the those that rely I'm there as year your use neither that is investor B we expand neither is profile with Both we our clear of Systems both in are happy on we questions. banked we've revenue both criteria And ROIC synergies. to do both highlighted to of see them under on and say What Medical as five thing obviously, review on they synergies, and options Steve the opportunity cost fit that

the capabilities combines certainly so we takes base case ours. And today, that with of have revenue it their

immediately, So call technology synergies our something advance solidify it chain. not wouldn't think the it's for but it investment I we adds to because that cold or and an customers is opportunity

Operator

line Yuan and with Next Riley your from Securities is question B. Zhi is open.

Yuan Zhi

questions. you for thanks our Hi taking

have a couple. We

thoughts. the your the just impact it's the category? hear Is of shares from this mind services, in weakness from market competitor that want is general terms of growth not in or your the taking First to in that the genomic great

Matt McManus

Sure.

great McManus. It's So this is Matt question. a

lot account has And us out, and a well. that engagement aligned the Lyndon he analytics looking think stable with for customers we're largely the so as pointed as I the and done of the customer customer what in the continued we've to it. continued at we've same remained level base new customers is NPI ordering seeing and those order that as added have

that our market actually effect from slowness this, and encouraging have to their more ordering the is of some not so it's us delayed doing orders standpoint can some a switching as our reducing And that in somewhat tell, near, also from customers either and services, actually which hear they're of market customers, from just we from but or projects. we work dynamic the points are customers less less

quarter, the with We're isn't not strong. market hoped our the interactions and certainly one for we've the the we our environment, to that really in them the remain competition. last losing relationship while So customers that our think

Yuan Zhi

Got of comment that divide area Lindon, we when revenue other like on slowdown geographic in and China? Yeah. strong China and maybe EU you areas, revenue terms overall different it. growth? US a all it the And can in has in are maintain Is only

Lindon Robertson

couple less the of third of a weeks in April. as we ourselves a lockdown a weeks, a China for the than month little had in So quarter, in two reminder

overall, demand analogous is that driven we I'm about in a driven, expanded drop lock just larger addressing saw was say our guidance, with genomics was I in Now how a and the would that insider some year-to-year China we China of downs us deliveries, talked with into on the factored areas rolling impacted that some and already product highlight but that sequential it the we throughout it's bit it's in what what in but In that but guidance. We'd contributes portion little to quarter. overall, to in -- we I the China. rolling when the impact the comprehended that blackouts,

that we that nice in the we well. earlier question China correct. the is now. saw up up, market's open saw in as June, a growth as even we of of pick implication month and more And number pick in customers saw seeing is the think I from an We're

what we continuing like drive the about at be you would we'll stability the the but So to to suggest the the have see some numbers from in an end upper my growth we're this well, overall. lower load the that we basis. said, acknowledge side marketing -- single and revenue And US, guidance, When up point, of Again, in Europe by some less would like think relief there and our again, there's realistic of order on than to as we genomics, slight to We're in performance be end looking China. range, high to think upside us expansion at at picked encouraged organic as range the is that well. we I wise. we'll from digit

genomic say less It's anything today like see based So space. to Yuan, a what is than of other would I in don't range the we on we line really admittedly and to. little that want our the sight than

NGS, less and Sanger in little bit in almost You synthesis no a carry of than backlog even right. backlog gene

reality deal with. we a that So it's just

Yuan Zhi

potential That's Got overlap of part And you which see to very helpful. with Medical say one System has just B or Yeah. curious current for it. business maybe your overlap there? question last me

Steve Schwartz

the Yuan. about have. a there's to think overlap, that offerings long Azenta, in to add as us. This tremendous to have from that'll health think link that just we going very we just enhance for the capabilities, as human we tremendous we utilize standpoint, technical really are opportunities talked think And couple value little other opportunities to offerings is cold forward, chain opportunity term we that Yeah, we

can really capability. we Certainly solar from pleased refrigeration interesting, things They they utilize. power devices and So history drive collection. source, Medical, use we we're are B tracking data technologies by but with long the of that direct a have

that company. think enhance things offerings those do the in the are really we that already So will we

lot So enthusiastic Azenta. with technical adding complimentary match great capability of We very really about overlap about they with are we're as it's and capabilities. just little a think combining a that

Yuan Zhi

you it. for helpful Got color, the Thank

Operator

turn remarks. With no Lindon to back it I'll closing further for questions,

Lindon Robertson

we'll out made and to in forward with underscored our by continue the businesses no it's of we're about we're investments But in path All that Barkey. come with these lot no making business, less right. with you invest where the B a individual continue excitement, always every a build have everybody, It's to a we with Medical and fact We're of terms headed lot enthusiasm the organically Thank in you. today. enthusiasm of just our Look of lot and we in about aspect on it's business excited with less it's results. with bakes and path. and

Medical, be intention few months term it's to the end As with model. I long mentioned B earlier, at look experience our whether updating is of forward, year we'll the or our with a

-- on that another coming not we what to without to expected, Obviously we're continue balance this again, So takes And billion enthusiasm sheet we $X EBITDA won't but a now. a us. traction as at the add within to we this still refer have year model out our than business. reminder, available lower of where to for US

we're So well. about as enthusiastic that

their and ahead of to know schedules we the everybody us. us have So thank for look with some forward call backs. busy time We we

We conference are a this at week.

forward the got watch and out recently. So your the conferences up coming meeting doing We've to that of more releases next look over we couple as you weeks We out those press put street. on well.

So thank much. you very

Operator

And that does our today thank disconnect. now conclude can we participating and for call for everyone and you

Azenta (AZTA) 10 Aug 222022 Q3 Earnings call transcript