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What changed in Azenta, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Azenta, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+324 added−325 removedSource: 10-K (2023-11-21) vs 10-K (2022-11-25)

Top changes in Azenta, Inc.'s 2023 10-K

324 paragraphs added · 325 removed · 232 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

60 edited+11 added−5 removed15 unchanged
Biggest changeOur products are used for controlled rate thawing of cryopreserved samples and therapies, and are used in R&D, clinical trials, good manufacturing practices and in the hospital setting. Our Barkey plasmatherm product is the only automated cell thawing device approved by the U.S. Food and Drug Administration, or FDA, as a medical device for use in patient care.
Biggest changeControlled rate thawing devices – includes a range of products for automated thawing of plasma, blood and stem cells as well as in CGT applications. Our products are used for controlled rate thawing of cryopreserved samples and therapies, and are used in research and development, clinical trials, good manufacturing practices and in the hospital setting.
We have a network of 14 laboratories that provide genomic services, including eight in the United States, three in China, and one each in Japan, Germany, and the United Kingdom. Patents and Proprietary Rights We rely on patents, trade secret laws, confidentiality procedures, copyrights, trademarks and licensing agreements to protect our technology.
We have a network of 14 laboratories that provide genomic services, including eight in the United States, three in China, and one each in Japan, Germany, and the United Kingdom. Patents and Proprietary Rights We rely on patents, trade secret laws, confidentiality agreements and procedures, copyrights, trademarks and licensing agreements to protect our technology.
We implement quality assurance procedures that include standard design practices, reliability testing and analysis, supplier and component selection procedures, vendor controls, manufacturing process controls, and service processes that ensure high-quality performance of our products. Our major manufacturing facilities are in Manchester and Wotton, United Kingdom and Billerica, Massachusetts.
We implement quality assurance procedures that include standard design practices, reliability testing and analysis, supplier and component selection procedures, vendor controls, manufacturing process controls, and service processes that ensure high-quality performance of our products. Our major manufacturing facilities are in Manchester and Wotton, United Kingdom, Hosingen, Luxembourg, and Billerica, Massachusetts.
Within our Life Sciences Services segment, our genomics services business advances research and development activities in gene sequencing, synthesis, editing, and related services to meet market demands. We invest in R&D services to develop protocols and efficiencies in our own laboratories and to provide proprietary offerings to our customers.
Within our Life Sciences Services segment, our genomics services business advances research and development activities in gene sequencing, synthesis, editing, and related services to meet market demands. We invest in research and development to develop protocols and efficiencies in our own laboratories and to provide proprietary offerings to our customers.
On July 1, 2022, we acquired Barkey Holding GmbH and its subsidiaries, or Barkey, a leading provider of controlled rate thawing devices for customers in the medical, biotech and pharmaceutical industries, headquartered in Leopoldshöhe, Germany.
On July 1, 2022, we acquired Barkey Holding GmbH and its subsidiaries (“Barkey”), a leading provider of controlled rate thawing devices for customers in the medical, biotech and pharmaceutical industries, headquartered in Leopoldshöhe, Germany.
Our engineering, marketing, operations, and management personnel leverage their close collaborative relationships with their counterparts in customer organizations to proactively identify market demands that help us refocus our research and development investment to match our customers’ demands.
Our engineering, marketing, operations, and management personnel leverage their close collaborative relationships with their counterparts in customer organizations to proactively identify market demands that help us refocus our research and development investments to match our customers’ demands.
We also had approximately 33 pending U.S. patent applications, with foreign counterparts of some of these applications having been filed or which may be filed at the appropriate time.
We also had approximately 37 pending U.S. patent applications, with foreign counterparts of some of these applications having been filed or which may be filed at the appropriate time.
Federal environmental legislation in the United States that affects us includes the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, and the Comprehensive Environmental Response Compensation and Liability Act. We are also subject to regulation by the Occupational Safety and Health Administration, or OSHA, concerning employee safety and health matters.
Federal environmental legislation in the United States that affects us includes the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, and the Comprehensive Environmental Response Compensation and Liability Act. We are also subject to regulation by the Occupational Safety and Health Administration (“OSHA”), concerning employee safety and health matters.
Within our Life Sciences Products segment, we have developed and continue to develop automated biological sample storage solutions for operating in ultra-low temperature environments. We have a complete line up of automated 6 Table of Contents stores from ambient temperatures to -190°C.
Within our Life Sciences Products segment, we have developed and continue to develop automated biological sample storage solutions for operating in ultra-low temperature environments. We have a complete line up of automated stores from ambient temperatures to -190°C.
Our Informatics solutions provides sample intelligence software 5 Table of Contents solutions, and support laboratory workflow scheduling for life science tools and instrument work cells, sample inventory and logistics, environmental and temperature monitoring, clinical trial and consent management, and planning, data management, virtualization, and visualization of sample collections.
Our informatics solutions provides sample intelligence software solutions, and support laboratory workflow scheduling for life science tools and instrument work cells, sample inventory and logistics, environmental and temperature monitoring, clinical trial and consent management, and planning, data management, virtualization, and visualization of sample collections.
We adhere to the governance requirements established by federal and state law, the Securities and Exchange Commission, or SEC, and the Nasdaq Global Select Market, and we strive to establish appropriate risk management methods and control procedures to adequately manage, monitor, and control the major risks we may face day to day. ​ Available Information We file annual, quarterly, and current reports, proxy statements and other information with the SEC.
We adhere to the governance requirements established by federal and state law, the SEC and the Nasdaq Global Select Market, and we strive to establish appropriate risk management methods and control procedures to adequately manage, monitor, and control the major risks we may face day to day. ​ Available Information We file annual, quarterly, and current reports, proxy statements and other information with the SEC.
Our policy is to require all employees to enter into proprietary information and nondisclosure agreements to protect trade secrets and know-how. We cannot guarantee that these efforts will meaningfully protect our trade secrets. As of September 30, 2022, we owned approximately 77 issued U.S. patents, with various corresponding patents issued in foreign jurisdictions.
Our policy is to require all employees to enter into proprietary information and nondisclosure agreements to protect trade secrets and know-how. We cannot guarantee that these efforts will meaningfully protect our trade secrets. As of September 30, 2023, we owned approximately 94 issued U.S. patents, with various corresponding patents issued in foreign jurisdictions.
We offer enhanced on-site and off-site management of biological sample inventories and integration solutions to our customers for their increasingly distributed workflow.
We offer enhanced on-site and off-site management of biological sample inventories and integration solutions to our customers for their increasingly distributed workflows.
While most of our products are not regulated, our recent acquisitions of Barkey and B Medical include certain products that are regulated by the FDA under the Federal Food, Drug, and Cosmetic Act. Our businesses also include export and import activities, we are subject to pertinent laws enforced by the U.S. Departments of Commerce, State and Treasury.
While most of our products are not regulated, our acquisitions of Barkey and B Medical include certain products that are regulated by the FDA under the Federal Food, Drug, and Cosmetic Act. 8 Table of Contents Our businesses also include export and import activities, we are subject to pertinent laws enforced by the U.S. Departments of Commerce, State and Treasury.
Our patents will expire at various dates through 2039. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Environmental Matters and Government Regulations ​ Environmental Regulations ​ We are subject to various laws and governmental regulations concerning environmental matters and employee safety and health in the United States and other countries.
Our patents will expire at various dates beginning in 2024 and running through 2039. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Environmental Matters and Government Regulations ​ Environmental Regulations ​ We are subject to various laws and governmental regulations concerning environmental matters and employee safety and health in the United States and other countries.
As an example, in our genomic services business, we enriched our portfolio by adding regulated services targeting analysis of adeno-associated virus, a common vector used in cell and gene therapy. Furthermore, we continue to add value to drug discovery and development research by expanding our portfolio to include proteomics solutions.
As an example, in our genomic services business, we enriched our portfolio by adding regulated services targeting analysis of adeno-associated virus, a common vector used in CGT. Furthermore, we continue to add value to drug discovery and development research by expanding our portfolio to include proteomics solutions.
This portfolio provides customers with the highest level of sample quality, security, availability, intelligence, and integrity throughout the lifecycle of samples providing customers with complete end-to-end “cold-chain of custody” capabilities.
This portfolio provides customers with a high level of sample quality, security, availability, intelligence, and integrity throughout the lifecycle of samples providing customers with complete end-to-end “cold-chain of custody” capabilities.
Item 1. Business Overview We are a leading global provid er of life sciences sample exploration and management solutions for the life sciences market. We entered the life sciences market in 2011, leveraging our in-house capabilities of precision automation and cryogenics capabilities that we were then applying in the semiconductor market.
Item 1. Business Overview We are a leading global provid er of biological and chemical compound sample exploration and management solutions for the life sciences industry. We entered the life sciences market in 2011, leveraging our in-house precision automation and cryogenics capabilities that we were then applying in the semiconductor manufacturing market.
We participate in this market as a value-added laboratory services provider, offering high quality genetic testing services with fast turnaround times. We have more than 12,000 customers globally and believe we are well positioned to expand our customer base.
We participate in this market as a value-added laboratory services provider, offering high quality genetic testing services with fast turnaround times. We have approximately 13,000 customers globally and believe we are well positioned to expand our customer base.
The gene synthesis offerings provide production of a wide range of sequence lengths and structural complexity, DNA cloning, gene fragment synthesis, oligo synthesis, and plasmid purification. ​ Sample Repository Solutions - includes a complete range of services consisting of on-site and off-site sample storage, cold chain logistics, sample transport and collection relocation, bio-processing solutions (inclusive of sample preparation, and genomic and cell culture analysis), disaster recovery and business continuity, biospecimen procurement services, as well as project management and consulting.
Our gene synthesis offerings provide production of a wide range of sequence lengths and structural complexity, DNA cloning, gene fragment synthesis, oligo synthesis, and plasmid purification. ​ Sample repository solutions (SRS) - includes a complete range of services consisting of on-site and off-site sample storage, cold chain logistics, sample transport and collection relocation, bio-processing solutions (inclusive of sample preparation, and laboratory-based sample analysis), disaster recovery and business continuity, biospecimen procurement services, as well as project management and consulting.
We understand the importance of sample integrity and offer a broad portfolio of products and services supporting customers at every stage of the life cycle of samples, including procurement and sourcing, automated storage systems, genomic services and a multitude of sample consumables, informatics and data software, and sample repository solutions.
We understand the importance of sample integrity and offer a broad portfolio of products and services supporting customers at every stage of the life cycle of samples, including procurement and sourcing, automated storage systems, genomic services and a multitude of sample consumables, informatics and data software, along with sample repository solutions, referred to as SRS.
The United States Environmental Protection Agency, or EPA, OSHA, and other federal agencies have the authority to promulgate regulations that have an effect on our operations. 7 Table of Contents ​ In addition to these federal laws and regulations, various states have been delegated certain authority under the federal statutes and have authority over these matters under state laws.
The United States Environmental Protection Agency (“EPA”), OSHA, and other federal agencies have the authority to promulgate regulations that have an effect on our operations. In addition to these federal laws and regulations, various states have been delegated certain authority under the federal statutes and have authority over these matters under state laws.
Our principal product service and support locations include Chelmsford, Massachusetts, and Manchester, United Kingdom. We provide sample management storage and transportation services in Indianapolis, Indiana; Griesheim, Germany; Montreal, Canada; Singapore; Beijing, China and various locations throughout the United States.
Our principal product service and support locations include Burlington, Massachusetts, and Manchester, United Kingdom. We provide sample management storage and transportation services in Indianapolis and Plainfield, Indiana; Fresno, California; Cleveland, Ohio; Griesheim, Germany; Montreal, Canada; Singapore; Beijing, China and various locations throughout the United States.
We will continue to focus on developing processes and technologies that can streamline sample to data workflows. Manufacturing and Service Our manufacturing operations include product assembly, integration, and testing.
We will continue to focus on developing processes and technologies that can streamline sample to data workflows. 7 Table of Contents Manufacturing and Services Our manufacturing operations include product assembly, integration, and testing.
We continue to develop new products and services offerings and enhance existing and acquired offerings through the expertise of our research and development resources. We believe our acquisition, investment, and integration approach has allowed us to accelerate internal development and significantly accelerate time to market.
We continue to develop new product and service offerings and enhance existing and acquired offerings through the expertise of our research and development resources. We believe our acquisition, investment, and integration approach has allowed us to accelerate internal development and significantly accelerate time to market for our life sciences solutions.
For further information on our acquisitions, please refer to Note 4, “Acquisitions” to our Consolidated Financial Statements included under Item 8, “Financial Statements and Supplementary Data” of this Form 10-K.
For further information on our acquisitions, please refer to Note 4, Business Combinations to our Consolidated Financial Statements included under Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Life Sciences Services Offerings The principal offerings of the Life Sciences Services segment include the following: Genomic Services - offers gene sequencing and gene synthesis services, enabling the fast-expanding research of gene-based healthcare discoveries and therapies. These service offerings include Next Generation sequencing, or NGS, Sanger sequencing, gene synthesis, bioinformatics, and good laboratory practices, or GLP, regulatory services.
Life Sciences Services Offerings The principal offerings of the Life Sciences Services segment include the following: Genomic services - includes gene sequencing and gene synthesis services, enabling the expanding research and development of gene-based healthcare discoveries and therapies. These service offerings include Next-Generation sequencing (“NGS”), Sanger sequencing, gene synthesis, bioinformatics, and good laboratory practices (“GLP”) regulatory services.
Our BioStore ™ has a unique design, which allows controlled temperature storage down to -80°C with the industry’s highest throughput of sample retrieval. Our BioStore portfolio offers improved data management and sample security for vaccines and biologics stored at -80°C.
Our automated storage systems offer improved data management and sample security for vaccines and biologics and have a unique design, which allows controlled temperature storage down to -80°C with the industry’s highest throughput of sample retrieval.
We also offer expert-level consultation services to our clients throughout their experimental design and implementation. Our services also include short- and long-term sample storage and management of the “cold chain of custody” from collection, to storage, to retrieving the sample which ultimately may go back into the research workflow.
Our services also include short- and long-term sample storage and management of the “cold-chain of custody” from collection, to storage, to retrieving the sample which ultimately may go back into the research workflow.
In connection with the planned divesture of the semiconductor automation business and our continued focus on our life sciences businesses, we changed our corporate name from “Brooks Automation, Inc.” to “Azenta, Inc.” and our common stock started to trade on the Nasdaq Global Select Market under the symbol “AZTA” on December 1, 2021.
On December 1, 2021, we changed our corporate name from “Brooks Automation, Inc.” to “Azenta, Inc.” and our common stock started to trade on the Nasdaq Global Select Market under the symbol “AZTA”.
Life Sciences Market Our businesses serve a broad range of end markets within the life sciences industry in the pursuit of a growing list of scientific possibilities for advancing the development of therapies to improve people’s lives and cure diseases.
Life Sciences Market Our businesses serve a broad range of end markets within the life sciences industry to help our customers advance the development of therapies to improve people’s lives and cure diseases.
We believe the combination of our broad sample-based offerings, including genomic analysis, sample management solutions, automated storage systems, informatic solutions and sample sourcing and procurement services has enabled us to better serve our customers with an integrated and comprehensive portfolio of services.
We believe the combination of our broad sample-based offerings, including genomic analysis, sample management solutions, automated storage systems, informatic solutions and sample sourcing and procurement services has enabled us to better serve our customers with an integrated and comprehensive portfolio of products and services across our segments. 6 Table of Contents Sales, Marketing and Customer Support Most of our sales are completed through our direct sales force, particularly our store systems, storage services, and genomic services.
Our expertise, global footprint, and leadership positions enable us to be a trusted global partner to pharmaceutical, biotechnology, and life sciences research institutions. In total, we employ approximately 3,200 full-time employees, part-time employees, and contingent workers worldwide and have sales in more than 100 countries. We are headquartered in Chelmsford, Massachusetts and have operations in North America, Asia, and Europe.
Our expertise, global footprint, and leadership positions enable us to be a trusted global partner to pharmaceutical, biotechnology, and life sciences research institutions. In total, we employ approximately 3,500 full-time employees, part-time employees and contingent workers worldwide as of September 30, 2023 and have sales in approximately 150 countries.
Approximately 48% of our employees are gender diverse, and 41% of our U.S.-based employees identify as being racially diverse. Additional detail on our gender and racial diversity can be found on our website in our environmental, social, and governance, or ESG, governance reports. ​ Employee Engagement .
Approximately 46% of our employees are gender diverse, and 42% of our U.S.-based employees identify as being racially diverse. Additional detail on our gender and racial diversity can be found on our website in our environmental, social, and governance (“ESG”) governance reports. ​ Employee Engagement . We are committed to fostering a culture and environment where every employee feels valued.
We process millions of samples every year, each containing valuable information that must be preserved with the sample. Our genomic services provide a broad capability to customers for sequencing and synthesis of genes. Our sample management services include off-site storage services, transport services, laboratory services, and interactive informatics solutions.
We process millions of samples annually, each containing valuable information that must be preserved with the sample. Our genomic services provide a broad capability to customers for gene sequencing, synthesis, editing and related services.
Acquisition completed after fiscal year end On October 3, 2022, we acquired B Medical Systems S.á.r.l and its subsidiaries, or B Medical, a market leader in temperature-controlled storage and transportation solutions that enables the delivery of life-saving treatments to more than 150 countries worldwide.
On October 3, 2022, we acquired B Medical Systems S.á r.l and its subsidiaries (“B Medical”), a market leader in temperature-controlled storage and transportation solutions that enable the delivery of life-saving treatments to more than 150 countries worldwide. This acquisition complements our cold-chain capabilities, adding differentiated solutions for reliable and traceable transport of temperature-sensitive samples.
Sales of genomic services are generally generated with on-line orders from the customer laboratory and delivered via a courier service, with the simplest of sequencing requests completed in less than 24 hours and more complex synthesis tasks within weeks. We utilize a worldwide partner network of clinical sites and biobanks for the collection capability of our biospecimen procurement business.
Sales of genomic services are generally generated with on-line orders from the customer laboratory and delivered to and from our customers using a courier service, with the simplest of genomics and synthesis requests completed in less than 24 hours and more complex projects within weeks.
Lee Partners, L.P., or THL, and completed the sale on February 1, 2022 for $2.9 billion in cash. The semiconductor automation results are classified as discontinued operations, and, unless otherwise noted, the description of our business in this Form 10-K relates solely to our continuing operations.
The semiconductor automation results are classified as discontinued operations, and, unless otherwise noted, the description of our business in this Annual Report on Form 10-K relates solely to our continuing operations.
We are committed to making sure that every team member understands our core values of Customer Focus, Achievement, Accountability, Teamwork, Employee Value, and Integrity.
Our Company Purpose is to enable life sciences organizations around the world to bring impactful and breakthrough therapies to market – faster. We are committed to making sure that every team member understands our core values of Customer Focus, Achievement, Accountability, Teamwork, Employee Value, and Integrity.
Consumables and instruments - includes a complete range of consumables, including multiple formats of racks, tubes, caps, plates and foils, which are used for storage and handling of samples in ambient and ultra-cold storage environments. A comprehensive range of instruments used for labeling, bar coding, capping, de-capping, auditing, sealing, peeling, and piercing tubes and plates complement our consumables.
We also offer a portfolio of service products designed to optimize productivity of our storage system offerings. Consumables and instruments - includes a complete range of consumables, including multiple formats of racks, tubes, caps, plates and foils, which are used for storage and handling of samples in ambient and ultra-cold storage environments.
With the advent of biologics and personalized medicine, biological samples have become critical assets to the success of drug and therapy pipelines, and the proper management and protection of these samples has gained increased importance to our customers. We believe this trend has created a sizable market opportunity for Azenta to provide comprehensive sample management and genomic solutions.
With the advent of biologics and personalized 4 Table of Contents medicine, biological samples have become critical assets to the success of drug and therapy pipelines, and the proper management and protection of these samples are of increased importance to our customers.
We are committed to fostering a culture and environment where every employee feels valued. Our success depends in large part on our hiring and retaining top talent across the entire organization, with primary emphasis on our management team and our employees who interface directly with our customers.
Our success depends in large part on our hiring and retaining top talent across the entire organization, with primary emphasis on our management team and our employees who interface directly with our customers. We compete for talent with other companies both smaller and larger, and both in our market and in other industries. ​ Compensation and Benefits.
For further information on our reportable and operating segments, please refer to Note 18, “Segment and Geographic Information” to our Consolidated Financial Statements included under Item 8, “Financial Statements and Supplementary Data” of this Form 10- K. Life Sciences Products Our Life Sciences Products business is a leading provider of automated cold storage solutions for biological and chemical compound samples.
For further information on our reportable and operating segments, please refer to Note 19, Segment and Geographic Information to our Consolidated Financial Statements included under Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Each of the business lines within the two segments, however, has unique competitors in their area of offerings. In the Life Sciences Products segment, our main competitors include Hamilton Company and Liconic AG for automation systems and Thermo Fisher Scientific for consumables and services.
In the Life Sciences Products segment, our main competitors include Hamilton Company and Liconic AG for automation systems, Thermo Fisher Scientific Inc. for consumables and services, and Vestfrost Solutions and Haier Biomedical for B Medical.
We understand that our success depends on our highly talented associates, and our human capital management practices focus on attracting and retaining a diverse and engaged workforce. ​ Diversity, Equity and Inclusion .
Human Capital ​ In total, we employ approximately 3,500 full-time employees, part-time employees and contingent workers worldwide as of September 30, 2023, primarily in the United States. We understand that our success depends on our highly talented associates, and our human capital management practices focus on attracting and retaining a diverse and engaged workforce. ​ Diversity, Equity and Inclusion .
In 2022, 14 employees were enrolled in this benefit with 29% being female. ​ 8 Table of Contents Employee Health and Safety. Compliance with environmental, health and safety, or EH&S, laws and regulations underlies the basis of the EH&S programs we have in place.
Compliance with environmental, health and safety (“EH&S”) laws and regulations underlies the basis of the EH&S programs we have in place.
We maintain sales and service centers in Asia, Europe, the Middle East, and North America to enhance support of and communication with customers. Competition Given the breadth of the sample management solutions and genomic services offered by our Life Sciences Products and Life Sciences Services segments, we believe we have a unique portfolio of products and services.
We maintain sales and service centers in Asia, Europe, the Middle East, and North America to enhance support of, and communication with, customers.
We provide training and learning opportunities, rotational assignment opportunities, and continuous performance feedback to further our employee development. Our learning culture is built on: formal curriculums, communities of practice, peer-to-peer learning, experiential development, support tools and ongoing assessment.
Our learning culture is built on: formal curriculums, communities of practice, peer-to-peer learning, experiential development, support tools and ongoing assessment. We listen to our employees to better understand their training and development needs, and ensure our offerings cater to both technical learning and leadership development.
These led us to provide solutions for automated ultra-cold storage. Since then, we have expanded our life sciences offerings both organically and through a series of acquisitions. We now support our customers from research to clinical development with our sample management, automated storage, and genomic services expertise to help our customers bring impactful therapies to market faster.
We now support our customers from research and clinical development to commercialization with our sample management, automated storage, and genomic services expertise to help our customers bring impactful therapies to the market faster.
Our portfolio includes products and services offerings developed by us internally as well as many offerings we have added through multiple acquisitions designed to bring together a comprehensive capability to serve our customers’ needs in the sample-based services arena.
Our portfolio includes product and service offerings developed by us internally, as well as through acquisitions, designed to bring together comprehensive capabilities to service our customers’ needs in sample exploration and management, automated storage, and genomic solutions.
Since the successful mapping of the full human genome at the turn of this century, the market for genomic services has grown in support of research in biologic drug development, personalized medicine and cell/gene therapy. Top pharmaceutical and biotechnology companies can use their in-house laboratory resources to sequence the millions of genes needed as part of their research workflow.
We believe this trend has created a sizable market opportunity for us to provide comprehensive sample management and genomic solutions. Since the successful mapping of the full human genome at the turn of this century, the market for genomic services has grown in support of research in biologic drug development, personalized medicine and cell and gene therapy (“CGT”).
Still, many companies look to outsource their gene sequencing to independent laboratories that provide expedited results and expert consultative services. Other companies and institutions have fewer or no in-house options and make use of outsourced capabilities as their primary solution.
Top pharmaceutical and biotechnology companies and institutions can use their in-house laboratory resources to sequence millions of genes as part of their research workflow. Many companies and institutions, however, look to outsource all or a part of their gene sequencing to independent laboratories that provide expedited results and expert consultative services.
We listen to our employees to better understand their training and development needs, and ensure our offerings cater to both technical learning and leadership development. We offer a generous tuition reimbursement program that encourages employees to pursue undergraduate and graduate degrees in fields associated with their current or aspirational positions.
We offer a generous tuition reimbursement program that encourages employees to pursue undergraduate and graduate degrees in fields associated with their current or aspirational positions. In 2023, 21 employees were enrolled in this benefit with 33% being female. ​ Employee Health and Safety.
Our systems provide high throughput capability and optimized storage of multi-format tubes and plates while maintaining consistent temperature profiles across stored samples. We also offer a portfolio of service products designed to optimize productivity of our storage systems offerings.
Our automated storage systems have a unique design that allows controlled temperature storage down to -80°C with the industry’s highest throughput of sample retrieval. Our systems provide high throughput capability and optimized storage of multi-format tubes and plates while maintaining consistent temperature profiles across stored samples.
In regions with emerging life science industries such as China, India, and the Middle East, we leverage local distributors to assist with the sales process for automated stores. Our larger automated store systems sales process may take months to complete and involve a team from sales, marketing, and engineering.
The sales process for our SRS and larger automated store systems takes months to complete and may involve a team from sales, marketing, and engineering.
A majority of employees also have incentive compensation opportunities, which are primarily focused on meeting financial, sales, operational, and/or customer focused metrics. In addition, our long-term equity compensation is intended to align management interests with those of our stockholders and to encourage the creation of long-term value. ​ Training and Development .
In addition, our long-term equity compensation is intended to align management interests with those of our stockholders and to encourage the creation of long-term value. ​ Training and Development . We provide training and learning opportunities, rotational assignment opportunities, and continuous performance feedback to further our employee development.
We compete for talent with other companies both smaller and larger, and both in our market and in other industries. ​ Compensation and Benefits. In order to attract and retain top talent, we focus on having a diverse, inclusive, and safe workplace, while offering competitive compensation, benefits, and health and wellness programs.
In order to attract and retain top talent, we focus on having a diverse, inclusive, and safe workplace, while offering competitive compensation, benefits, and health and wellness programs. A majority of employees also have incentive compensation opportunities, which are primarily focused on meeting financial, sales, operational, and/or customer focused metrics.
Our storage systems provide reliable automation and sample inventory management at temperatures down to -190°C and can store anywhere from one to millions of samples. Our sample management solutions include consumable vials and tubes, polymerase chain reaction, or PCR, plates, instruments for supporting 4 Table of Contents workflows, and informatics.
Life Sciences Products Our Life Sciences Products business is a leading provider of automated cold storage solutions for biological and chemical compound samples. We have a complete line of automated storage systems from ambient temperatures to -190°C. Our sample management solutions include consumable vials and tubes, polymerase chain reaction (“PCR”), plates, instruments for supporting workflows, and informatics.
We typically provide product warranties for a period of one to two years depending on the product type. Our marketing activities include participation in trade shows, seminars, and industry forums, creation and distribution of sales literature, webinars, and white papers, and publication of press releases and articles in business and industry publications.
Participation in trade shows, seminars, and industry forums are just a few of our marketing initiatives. We also produce and distribute sales brochures, webinars, and white papers, and we publish press releases and articles in business and industry publications.
Our offerings include a range of products aimed at the genomic sample preparation and services market for PCR and sequencing, imaging, plate sealing, liquid handling, and sample processing. Controlled rate thawing devices – includes a range of products for automated thawing of plasma, blood and stem cells as well as on cell and gene therapy, or CGT, applications.
A comprehensive range of instruments used for labeling, bar coding, capping, de-capping, auditing, sealing, peeling, and piercing tubes and plates complement our consumables. Our offerings include a range of products 5 Table of Contents aimed at the genomic sample preparation and services market for PCR and sequencing, imaging, plate sealing, liquid handling, and sample processing.
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Our Company was founded in 1978 and became a leading automation provider and partner to the global semiconductor manufacturing industry. In the fourth quarter of fiscal year 2021, we entered into a definitive agreement 3 Table of Contents to sell our semiconductor automation business, to Thomas H.
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This led us to provide solutions for automated ultra-cold storage. Since then, we have expanded our life sciences offerings through internal investments and through a series of acquisitions.
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The acquisition complements our cold chain capabilities, adding differentiated solutions for reliable and traceable transport of temperature-sensitive specimens. Sales, Marketing and Customer Support Most of our sales are completed through our direct sales force, particularly our store systems, storage services, and genomic services. We supplement the sale of consumables and instruments with distributors that reach a broad range of customers.
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We are headquartered in Burlington, Massachusetts and have operations in North America, Asia and Europe. Our Company was founded in 1978 and became a leading automation provider and partner to the global semiconductor manufacturing industry. We divested the last of our semiconductor businesses in February 2022 for $2.9 billion in cash and since operate solely as a life sciences company.
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Human Capital ​ As of September 30, 2022, we employed approximately 3,100 people which includes full-time and part-time employees. In addition, we utilized the services of 100 contingent associates, primarily in the United States. None of our employees are covered by collective bargaining agreements.
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Additionally, on February 2, 2023, we acquired Ziath Ltd. and its subsidiaries (“Ziath”), a leading provider of 2D barcode readers for life sciences applications to complement our product offerings.
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As we continue to monitor the impact of the COVID-19 pandemic, we have implemented and will continue to implement measures to ensure the safety of our employees.
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Our Barkey plasmatherm product is the only automated blood and plasma thawing device approved by the U.S. Food and Drug Administration (“FDA”) as a medical device for use in patient care. Temperature-controlled storage and transportation solutions – includes temperature-controlled storage and transportation solutions that enable the delivery of life-saving treatments to more than 150 countries worldwide.
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We formed a COVID-19 leadership team, which is continuously evaluating the guidance from federal and local authorities and has created strict policies and guidelines that put our employee’s health and safety first. ​ Purpose and Core Values . Our Company Purpose is to enable life sciences organizations around the world to bring impactful and breakthrough therapies to market – faster.
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Acquired through our B Medical acquisition, these products complement our cold-chain capabilities, adding differentiated solutions for reliable and traceable transport of temperature-sensitive samples.
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We offer a comprehensive, global portfolio that we believe has both broad appeal in the life sciences industry and enables customers to select the best solution for their research and development challenges. This portfolio also offers unique solutions for key markets such as CGT, antibody development and biomarker discovery by addressing genomic complexity and throughput challenges.
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Our sample management services include off-site storage services, transport services, laboratory services, and interactive informatics solutions. We also offer expert-level consultation services to our clients throughout their experimental design and implementation processes.
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We supplement the sale of consumables and instruments with distributors that reach a broad range of customers. In regions with emerging Life Sciences industries, we leverage local distributors to assist with the sales process for automated stores, and utilize the capabilities of international procurement agencies, including UNICEF.
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We typically provide product warranties for a period of one to five years depending on the product type, with some warranties of up to ten years for our solar powered cold chain products, as they are connected to real-time monitoring services. Customer support capabilities include utilization of offsite technicians and in country support provided by local agents.
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Competition Given the breadth of the sample management solutions and genomic services offered by our Life Sciences Products and Life Sciences Services segments, we believe we have a unique portfolio of products and services. Each of the business lines within the two segments, however, has unique competitors in their area of offerings.
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As part of our EH&S programs, we: ● help build a culture of safety that emphasizes safe operations, procedures, behaviors, and attitudes ● provide compliance training on general safety principles and job-specific requirements ● equip employees to recognize and execute their responsibilities for safety through numerous training events ● provide appropriate personal protective equipment and training in the safe use of that equipment ● help ensure all employees are aware of their surroundings and that everyone works to maintain a safe workplace 9 Table of Contents ● hold recurring, monthly corporate-wide safety committee meetings for employees at all levels, including executive management ● encourage employees to conduct job hazard analysis with the purpose of recognizing workplace hazards and reducing risk ​ Purpose and Core Values .

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese impacts may be of greater magnitude in certain jurisdictions in which we and our customers operate that continue to maintain stringent COVID-19 policies, in particular China. ​ 9 Table of Contents The depth and extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations, financial condition and individual markets is dependent upon various factors, including the spread of additional variants, the availability of vaccinations, and government interventions to reduce the spread of the virus.
Biggest changeThe depth and extent to which the COVID-19 pandemic or other public health threats may directly or indirectly 10 Table of Contents impact our business, results of operations, financial condition and individual markets in the future is dependent upon various factors, including the spread of additional COVID-19 variants or other health threats, the availability of vaccinations and other medical interventions, and government interventions to reduce the spread of COVID-19 or other health threats.
This could require us to incur significant expenses and to divert the efforts and attention of our management and technical personnel from our business operations. The expiration of our patents over time could lead to an increase of competition and a decline in our revenue.
This could require us to incur significant expenses and to divert the efforts and attention of our management and technical personnel from our business operations. The expiration of our patents over time could lead to an increase in competition and a decline in our revenue.
Our restated certificate of incorporation provides that our Board of Directors is authorized to issue from time to time, without further stockholder approval, up to 1,000,000 shares of preferred stock in one or more series and to fix and designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, redemption rights and terms of redemption and liquidation preferences.
Our restated certificate of incorporation provides that our Board of Directors is authorized to designate and issue from time to time, without further stockholder approval, up to 1,000,000 shares of preferred stock in one or more series and to fix and designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, redemption rights and terms of redemption and liquidation preferences.
We rely upon patents, trade secret laws, confidentiality procedures, copyrights, trademarks and licensing agreements to protect our technology. Existing trade secret, trademark and copyright laws offer only limited protection. Our success depends in part on our ability to obtain and enforce patent protection for our products both in the United States and in other countries.
We rely upon patents, trade secret laws, confidentiality agreements and procedures, copyrights, trademarks and licensing agreements to protect our technology. Existing trade secret, trademark and copyright laws offer only limited protection. Our success depends in part on our ability to obtain and enforce patent protection for our products and services both in the United States and in other countries.
We own numerous U.S. and foreign patents, and we intend to file additional applications, as appropriate, for patents covering our products and technology. Any issued patents owned by or licensed to us may be challenged, invalidated or circumvented, and the rights under these patents may not provide us with competitive advantages.
We own numerous U.S. and foreign patents, and we intend to file additional applications, as appropriate, for patents covering our products, services, and technology. Any issued patents owned by or licensed to us may be challenged, invalidated or circumvented, and the rights under these patents may not provide us with competitive advantages.
We expect that international sales, including increased sales in Asia, will continue to account for a significant portion of our revenue for the foreseeable future, and that in particular, the proportion of our sales to customers in China will continue to increase, due in large part to our significant genomic services operation in China.
We expect that international sales, including increased sales in Asia and Africa, will continue to account for a significant portion of our revenue for the foreseeable future, and that in particular, the proportion of our sales to customers in China will increase, due in large part to our significant genomic services operation in China.
In addition, a decline in our customers’ ability to pay as a result of the economic downturn may lead to increased difficulties in the collection of our accounts receivable, higher levels of reserves for doubtful accounts and write-offs of accounts receivable, and higher operating costs as a percentage of revenues.
In addition, a decline in our customers’ ability to pay as a result of an economic downturn may lead to increased difficulties in the collection of our accounts receivable, higher levels of reserves for doubtful accounts and write-offs of accounts receivable, and higher operating costs as a percentage of revenues.
The success of our product development and introduction of products and services to market depends on our ability to: ● identify and define new market opportunities, products and services in an accurate manner; ● obtain market acceptance of our products and services; ● innovate, develop, acquire and commercialize new technologies and applications in a timely manner; ● adjust to changing market conditions; ● differentiate our offerings from our competitors’ offerings; ● obtain and maintain intellectual property rights where necessary; ● continue to develop a comprehensive, integrated product and service strategy; ● price our products and services appropriately; and ● design our products to high standards of manufacturability so that they meet customer requirements.
The success of our product development and introduction of products and services to market depends on our ability to: ● identify and define new market opportunities, products and services in an accurate manner; ● obtain market acceptance of our products and services; ● innovate, develop, acquire and commercialize new technologies and applications in a timely and cost effective manner; ● adjust to changing market conditions; ● differentiate our offerings from our competitors’ offerings; ● obtain and maintain intellectual property rights where necessary; ● continue to develop a comprehensive, integrated product and service strategy; ● price our products and services appropriately; and ● design our products to high standards of manufacturability so that they meet customer requirements.
While we have developed and implemented and continue to develop and implement health and safety protocols, business continuity plans and crisis management protocols in an effort to try to mitigate the negative impact of COVID-19 on our employees and our business, there can be no assurance that we will be successful in our efforts or that such efforts may not have detrimental unintended consequences, and as a result, our business, financial condition and results of operations may be materially and adversely affected.
While we have developed and implemented and continue to develop and implement health and safety protocols, business continuity plans and crisis management protocols in an effort to try to mitigate the negative impact of COVID-19 and other health threats on our employees and our business, there can be no assurance that we will be successful in our efforts or that such efforts may not have detrimental unintended consequences, and as a result, our business, financial condition and results of operations may be materially and adversely affected.
Our ability to attract and retain employees may be negatively impacted by employees’ reactions to our health and safety policies related to COVID-19 vaccinations, masks, and/or flexibility to work remotely, particularly in the United States. Any failure to attract, recruit, train, retain, motivate and integrate qualified personnel could materially harm our operating results and growth prospects.
Our ability to attract and retain employees may be negatively impacted by employees’ reactions to our health and safety policies, including those related to COVID-19 vaccinations, masks, and/or flexibility to work remotely, particularly in the United States. Any failure to attract, recruit, train, retain, motivate and integrate qualified personnel could materially harm our operating results and growth prospects.
Our revenue, operating margins and other operating results could fluctuate significantly from quarter-to-quarter and year-to-year depending upon a variety of factors, including: ● changes in the timing and terms of product orders and service contracts by our customers as a result of our customer concentration or otherwise; ● changes in the demand for the mix of products and services that we offer; ● the timing and amount of any repurchases of our common stock under our recently approved share repurchase program; ● timing and market acceptance of our new product and services introductions; ● delays or problems in the planned introduction of new products or services, or in the performance of any such products following delivery to customers or the quality of such services; ● new products, services or technological innovations by our competitors, which can, among other things, render our products and services less competitive due to the rapid technological changes in the markets in which we provide products and services; ● the timing and related costs of any acquisitions, divestitures or other strategic transactions; ● our ability to reduce our costs in response to decreased demand for our products and services; ● our ability to accurately estimate customer demand, including the accuracy of demand forecasts used by us; ● disruptions in our manufacturing process or in the supply of components to us; 11 Table of Contents ● write-offs for excess or obsolete inventory; ● competitive pricing pressures; and ● increased investment into our infrastructure to support our growth, including capital equipment, research and development, as well as selling and marketing initiatives to support continuous product and services innovation, technological capability enhancements and sales efforts.
Our revenue, operating margins and other operating results could fluctuate significantly from quarter-to-quarter and year-to-year depending upon a variety of factors, including: ● changes in the timing and terms of product orders and service contracts by our customers as a result of our customer concentration or otherwise; ● changes in the demand for the mix of products and services that we offer; ● the timing and amount of any repurchases of our common stock under our share repurchase authorization; ● timing and market acceptance of our new product and service introductions; ● delays or problems in the planned introduction of new products or services, or in the performance of any such products following delivery to customers or the quality of such services; ● new products, services or technological innovations by our competitors, which can, among other things, render our products and services less competitive due to the rapid technological changes in the markets in which we provide products and services; ● the timing and related costs of any acquisitions, divestitures or other strategic transactions; ● our ability to reduce our costs in response to decreased demand for our products and services; ● our ability to accurately estimate customer demand, including the accuracy of demand forecasts used by us; ● disruptions in our manufacturing process or in the supply of components to us; 12 Table of Contents ● write-offs for excess or obsolete inventory; ● competitive pricing pressures; and ● increased investment into our infrastructure to support our growth, including capital equipment, research and development, as well as selling and marketing initiatives to support continuous product and services innovation, technological capability enhancements and sales efforts.
There can be no assurance that climate change or environmental regulation and response will not have a negative competitive impact on our ability to provide sample management, automated storage, and genomic services or that economic returns will match the investment that we are making in the development of new products and services.
There can be no assurance that climate change or environmental regulation and response will not have a negative competitive impact on our ability to provide sample management, automated storage, and genomic services or that economic returns will match the investments that we are making in the development of new products and services.
If we cannot succeed in responding in a timely manner to technological and/or market changes or if the new products and services that we introduce do not achieve market acceptance, our competitive position would diminish which could materially harm our business and our prospects. The global nature of our business exposes us to multiple risks.
If we cannot succeed in responding in a timely and cost effective manner to technological and/or market changes or if the new products and services that we introduce do not achieve market acceptance, our competitive position would diminish which could materially harm our business and our prospects. The global nature of our business exposes us to multiple risks.
Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expenses, hinder the execution of our business and growth strategy, constrain our capital deployment opportunities, and impact the price of our common stock.
Our business and operations could be negatively affected if we become subject to any securities litigation or from continued stockholder activism, which could cause us to incur significant expenses, hinder the execution of our business and growth strategy, constrain our capital deployment opportunities, and impact the price of our common stock.
If such assets are found to be impaired, they will be written down to estimated fair value, with a charge against earnings. The failure to adequately address these risks or the impairment of any assets could materially harm our business and financial results. 13 Table of Contents Expanding within current markets introduces new competitors and commercial risks.
If such assets are found to be impaired, they will be written down to estimated fair value, with a charge against earnings. The failure to adequately address these risks or the impairment of any assets could materially harm our business and financial results. Expanding within current markets introduces new competitors and commercial risks.
Item 1A. Risk Factors Factors That May Affect Future Results You should carefully consider the risks described below and the other information in this Form 10-K before deciding to invest in shares of our common stock. These are the risks and uncertainties applicable to our businesses that we believe are most important for you to consider.
Item 1A. Risk Factors Factors That May Affect Future Results You should carefully consider the risks described below and the other information in this Annual Report on Form 10-K before deciding to invest in shares of our common stock. These are the risks and uncertainties applicable to our businesses that we believe are most important for you to consider.
We are not obligated to acquire any particular amount of common stock under the 2022 Repurchase Program, and share repurchases may be commenced or suspended at any time at our discretion.
We are not obligated to acquire any particular amount of common stock under the 2022 Repurchase Authorization, and share repurchases may be commenced or suspended at any time at our discretion.
Outsource providers have played and will continue to play a key role in many of our transactional and administrative functions, such as information technology and facilities management. Many of these outsourced service providers, including certain hosted software applications that we use for confidential data storage, employ cloud computing technology for such storage.
Our external service providers have played and will continue to play a key role in many of our transactional and administrative functions, such as information technology and facilities management. Many of these service providers, including certain hosted software applications that we use for confidential data storage, employ cloud computing technology for such storage.
These impacts may also adversely affect our properties, our business, financial condition and results of operations. Unfavorable currency exchange rate fluctuations may impact our significant foreign currency holdings, lead to lower operating margins, or may cause us to raise prices, which could result in reduced sales.
These impacts may also adversely affect our properties, our business, financial condition and results of operations. Unfavorable currency exchange rate fluctuations may impact our significant foreign currency holdings, lead to lower operating margins, or may cause us to raise prices for our products and services, which could result in reduced sales.
In addition, if a supplier or sub-supplier suffers a production stoppage or delay for any reason, including natural disasters, this could result in a delay or reduction in our product shipments to our customers. Any of these contingencies could cause us to lose customers, result in delayed or lost revenue and otherwise materially harm our business.
In addition, if a supplier or sub-supplier suffers a production stoppage or delay for any reason, including natural disasters or health-related threats, this could result in a delay or reduction in our product shipments to our customers. Any of these contingencies could cause us to lose customers, result in delayed or lost revenue and otherwise materially harm our business.
One of our main competitive strengths is our technology, and we are dependent on our patent rights and other intellectual property rights to maintain our competitive position. Our current patents will expire from time to time through 2039 which could result in increased competition and declines in product and service revenue.
One of our main competitive strengths is our technology, and we are dependent on our patent rights and other intellectual property rights to maintain our competitive position. Our current patents will expire from time to time beginning in 2024 and running through 2039 which could result in increased competition and declines in product and service revenue.
Additionally, repurchases under our share repurchase program will diminish our cash reserves, which could impact our ability to further develop our business organically or through acquisitions or service any indebtedness we may incur in the future as a result of the reduction of our cash balances from the 2022 Repurchase Program or otherwise.
Additionally, repurchases under the 2022 Repurchase Authorization will diminish our cash reserves, which could impact our ability to further develop our business organically or through acquisitions or service any indebtedness we may incur in the future as a result of the reduction of our cash balances from the repurchases or otherwise.
There has been an increased focus from investors, customers, employees and other stakeholders concerning environmental, social and governance, or ESG, matters, including addressing climate change, which may result in increases in our costs to operate our business or restrict certain aspects of our activities.
There has been an increased focus from investors, customers, employees and other stakeholders concerning ESG matters, including addressing climate change, which may result in increases in our costs to operate our business or restrict certain aspects of our activities.
There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty regarding future incentives for energy-efficiency and costs of compliance, which may impact the demand for our products and services, and our results of operations and financial condition.
There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty regarding future incentives for energy-efficiency and costs of compliance, which may impact the demand for our products and services, our costs associated with providing our products and services, and our results of operations and financial condition.
As a result of our increased foreign currency holdings, our financial results and capital ratios may be impacted by the movements in exchange rates, and a significant portion of our assets must be translated into U.S. dollars for external reporting purposes or converted into U.S. dollars to meet our strategic needs, including with respect to our recently approved share repurchase program, and service obligations such as any future U.S. dollar-denominated indebtedness or dividends.
As a result of our significant foreign currency holdings, our financial results and capital ratios may be impacted by the movements in exchange rates, and a significant portion of our assets must be translated into U.S. dollars for external reporting purposes or converted into U.S. dollars to meet our strategic needs, including with respect to our share repurchase authorization, and service obligations such as any future U.S. dollar-denominated indebtedness or dividends.
Any failure to repurchase shares after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our stock price. Although our share repurchase program is intended to enhance long-term stockholder value, short-term price fluctuations could reduce the program’s effectiveness.
Any failure to repurchase shares after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our stock price. Although the 2022 Repurchase Authorization is intended to enhance long-term stockholder value, short-term price fluctuations could reduce the program’s effectiveness.
Our business and operations could be negatively affected by stockholder activism, which could impact the trading price and volatility of our common stock and may constrain capital deployment opportunities and adversely impact our ability to expand our business.
Our business and operations could be negatively affected by securities litigation or stockholder activism, which could impact the trading price and volatility of our common stock and may constrain capital deployment opportunities and adversely impact our ability to expand our business.
Due to the rapid technological change that characterizes the life sciences and related process equipment industries, we believe that the improvement of existing technology, reliance upon trade secrets, unpatented proprietary know-how and the development of new products may be as important as patent protection in establishing and 16 Table of Contents maintaining a competitive advantage.
Due to the rapid technological change that characterizes the life sciences and related process equipment industries, we believe that the improvement of existing technology, reliance upon trade secrets, unpatented proprietary know-how and the development of new products or services may be as important as patent protection in establishing and maintaining a competitive advantage.
If the operations at any one of these facilities were disrupted as a result of a natural disaster, fire, power or other utility outage, work stoppage or other similar event, our business could be seriously harmed because we may be unable to manufacture and ship products and parts, or provide services, to our customers in a timely fashion.
If the operations at any one of these facilities were disrupted as a result of a natural disaster, fire, power or other utility outage, work stoppage, war or terrorist activities or other similar event, our business could be seriously harmed because 15 Table of Contents we may be unable to manufacture and ship products and parts, or provide services, to our customers in a timely fashion.
Currency exchange rate fluctuations could have an adverse effect on our sales, cost of sales and results of operations, and we could experience losses with respect to forward exchange contracts into which we may enter. Unfavorable currency fluctuations could require us to increase prices to customers, which could result in lower net sales by us to such customers.
Currency exchange rate fluctuations could have an adverse effect on our sales, cost of sales and results of operations, and we could experience losses with respect to forward exchange contracts into which we may enter. Unfavorable currency fluctuations could require us to increase prices for our products and services to customers, which could result in lower net sales.
In addition, most sales made by our foreign subsidiaries are denominated in the currency of the country in which these products are sold or these services are provided and the currency they receive in payment for such sales could be less valuable as compared 10 Table of Contents to the U.S. dollar at the time of receipt as a result of exchange rate fluctuations.
In addition, most sales made by our foreign subsidiaries are denominated in the currency of the country in which these products are sold or these services are provided and the currency received in payment for such sales could be less valuable as compared to the U.S. dollar at the time of receipt as a result of exchange rate fluctuations.
In addition, the stock market has in the past experienced significant price and volume fluctuations. These fluctuations have particularly affected the market prices of the securities of high technology companies like ours. These market fluctuations could adversely affect the market price of our common stock.
In addition, the stock market has in the past experienced significant price and volume fluctuations. These fluctuations have particularly affected the market prices of the securities of life sciences companies like ours. These market fluctuations could adversely affect the market price of our common stock.
In addition, the laws of some countries in which our products are or may be developed, manufactured, or sold may not fully protect our products.
In addition, the laws of some countries in which our products and services are or may be developed, manufactured, provided, or sold may not fully protect our products and services.
Our access to raw materials may be adversely affected if our suppliers’ operations were disrupted as a 17 Table of Contents result of limited or delayed access to key raw materials and natural resources which may result in increased cost of these items. Our outsource providers may fail to perform as we expect.
Our access to raw materials may be adversely affected if our suppliers’ operations were disrupted as a result of limited or delayed access to key raw materials and natural resources which may result in increased cost of these items. Our external service providers may fail to perform as we expect.
Stockholder activism, which could take many forms or arise in a variety of situations, has been increasing recently. Volatility in the price of our common stock, our cash balance or other reasons may cause us to become the target of securities litigation or stockholder activism.
Stockholder activism, which can take many forms or arise in a variety of situations, has been increasing recently. Volatility in the price of our common stock, our cash balance, our financial performance or other reasons may cause us to become the target of securities litigation or continue to be the target of stockholder activism.
During fiscal years ended September 30, 2022, 2021 and 2020, approximately 33%, 38% and 34% of our revenue was derived from sales outside of North America.
During fiscal years ended September 30, 2023, 2022 and 2021, approximately 46%, 33% and 38% of our revenue was derived from sales outside of North America.
Risks Relating to Owning Our Securities Our stock price is volatile. The market price of our common stock has fluctuated widely. From the beginning of fiscal year 2021 through the end of fiscal year 2022, our stock price fluctuated between a high of $124.15 per share and a low of $42.86 per share.
Risks Relating to Owning Our Securities Our stock price is volatile. The market price of our common stock has fluctuated widely. From the beginning of fiscal year 2022 through the end of fiscal year 2023, our stock price fluctuated between a high of $124.15 per share and a low of $36.45 per share.
Alternatively, if we do not adjust the prices for our products and services in response to unfavorable currency fluctuations, our results of operations could be materially and adversely affected.
Alternatively, if we do not adjust the prices for our products and services in response to unfavorable currency fluctuations, our results of operations, including our margins, could be materially and adversely 11 Table of Contents affected.
Repurchases under the 2022 Repurchase Program may be made in the open market or through privately negotiated transactions (including under an accelerated share repurchase, or ASR, agreement), or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, subject to market and business conditions, legal requirements, and other factors.
Repurchases under the 2022 Repurchase Authorization may be made in the open market or through privately negotiated transactions (including under an accelerated share repurchase (“ASR”) agreement), or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, subject to market and business conditions, legal requirements, and other factors.
Our acquisitions, present numerous risks, including: ● difficulties in integrating the operations, technologies, products and personnel of the acquired companies and realizing the anticipated synergies of the combined businesses; ● defining and executing a comprehensive product strategy; ● managing the risks of entering markets or types of businesses in which we have limited or no direct experience; ● the potential loss of key employees, customers and strategic partners of ours or of acquired companies; ● unanticipated problems or latent liabilities, such as problems with the quality of the installed base of the target company’s products or infringement of another company’s intellectual property by a target company’s activities or products; ● problems associated with compliance with the acquired company’s existing contracts; ● difficulties in managing geographically dispersed operations; and ● the diversion of management’s attention from normal daily operations of the business.
Our acquisitions, present numerous risks, including: ● difficulties in integrating the operations, technologies, products and personnel of the acquired companies and realizing the anticipated synergies of the combined businesses; ● defining and executing a comprehensive product and services strategy; ● managing the risks of entering markets or types of businesses in which we have limited or no direct experience; ● the potential loss of key employees, customers and strategic partners of ours or of acquired companies; ● unanticipated problems or latent liabilities, such as problems with the quality of the installed base of the target company’s products or infringement of another company’s intellectual property by a target company’s activities, products or services; ● problems associated with compliance with the acquired company’s existing contracts; 14 Table of Contents ● difficulties in managing geographically dispersed operations; ● the diversion of management’s attention from normal daily operations of the business; and ● difficulties in accurately estimating the expected demand for any acquired product, service or technology and the timing and regularity thereof.
Repurchases pursuant to our share repurchase program could affect the price of our common stock and increase its volatility. The existence of our share repurchase program could also cause the price of our common stock to be higher than it would be in the absence of such a program and could reduce the market liquidity for our common stock.
Repurchases pursuant to the 2022 Repurchase Authorization could affect the price of our common stock and increase its volatility. The existence of the 2022 Repurchase Authorization could also cause the price of our common stock to be higher than it would be in the absence of such an authorization and could reduce the market liquidity for our common stock.
In any case, inaccurate or faulty testing services or damage to our customers’ materials attributed to a failure of our products or services could lead to claims for damages made by our customers and could also harm our relationship with our customers and damage our reputation, resulting in material harm to our business.
In any case, in addition to product warranty claims, inaccurate or faulty testing services or damage to our customers’ materials attributed to a 19 Table of Contents failure of our products or services could lead to additional claims for damages made by our customers and could also harm our relationship with our customers and damage our reputation, resulting in material harm to our business.
Although we have initiated a share repurchase program, we cannot guarantee that our share repurchase program will limit our ability to further develop our business or whether the share repurchase program will be fully implemented or that it will enhance long-term stockholder value.
Although we have initiated share repurchases under our share repurchase authorization, we cannot guarantee that our share repurchases will not limit our ability to further develop our business or whether the share repurchase authorization will be fully implemented or that it will enhance long-term stockholder value.
We are subject to risks associated with public health threats and epidemics, including the global health concerns relating to the ongoing COVID-19 pandemic. The global COVID-19 pandemic has adversely impacted and may further adversely impact our business and markets, including our workforce and operations and the operations of our customers, suppliers, and business partners.
We are subject to risks associated with public health threats and epidemics, including the ongoing global health concerns relating to COVID-19. Public health threats, whether global or not, may adversely impact our business and markets, including our workforce and operations and the operations of our customers, suppliers, and business partners.
Factors affecting our stock price may include: ● variations in operating results from quarter-to-quarter and year-to-year; ● changes in earnings estimates by analysts or our failure to meet analysts’ expectations; ● changes in the market price per share of our public company customers; ● the timing and amount of any repurchases of our common stock under our recently approved share repurchase program; ● market conditions in the life sciences sample management and genomic services and other industries into which we sell products and services; 18 Table of Contents ● global economic conditions; ● political changes, hostilities, the COVID-19 pandemic or similar events, or natural disasters such as hurricanes and floods; ● low trading volume of our common stock; and ● the number of firms making a market in our common stock.
Factors affecting our stock price may include: ● variations in operating results from quarter-to-quarter and year-to-year; ● changes in earnings estimates by analysts or our failure to meet analysts’ expectations; ● changes in the market price per share of our public company customers and competitors; ● the timing and amount of any repurchases of our common stock under our share repurchase authorization; ● market conditions in the life sciences sample management and genomic services and other industries into which we sell products and services; ● global economic conditions; ● political changes, hostilities, public health threats, including the COVID-19 pandemic, or similar events, or natural disasters such as hurricanes and floods; ● low trading volume of our common stock; ● the number of firms making a market in our common stock; and ● actions of activist stockholders and our response(s) thereto.
As a result of our international operations, we are exposed to many risks and uncertainties, including: ● longer sales-cycles and time to collection; ● tariff and international trade barriers; ● fewer or less certain legal protections for intellectual property and contract rights abroad; 12 Table of Contents ● different and changing legal and regulatory requirements in the jurisdictions in which we operate; ● government currency control and restrictions on repatriation of earnings; ● a diverse workforce with different experience levels, languages, cultures, customs, business practices and worker expectations, and differing employment practices and labor issues; ● fluctuations in foreign currency exchange and interest rates, particularly in Asia and Europe; and ● political and economic instability, changes, hostilities and other disruptions in regions where we operate.
As a result of our international operations, we are exposed to many risks and uncertainties, including: ● longer sales-cycles and time to collection; ● tariff and international trade barriers; 13 Table of Contents ● fewer or less certain legal protections for intellectual property and contract rights abroad; ● different and changing legal and regulatory requirements in the jurisdictions in which we operate; ● government currency control and restrictions on repatriation of earnings; ● a diverse workforce with different experience levels, languages, cultures, customs, business practices and worker expectations, and differing employment practices and labor issues; ● an increased reliance on third-party agents and distributors to transact business in jurisdictions where we do not have a presence; ● fluctuations in foreign currency exchange and interest rates, particularly in Asia and Europe; ● political and economic instability, changes, hostilities and other disruptions in regions where we operate; and ● intervention or attempts to control our international operations by foreign governments, including our Suzhou China facility by the government of China.
Although we believe our tax estimates are reasonable, there can be no assurance that any final determination will not be materially different from the treatment reflected in our historical income tax provisions and accruals, which could materially and adversely affect our financial condition and results of operations. 15 Table of Contents International trade disputes could result in additional or increased tariffs, export controls or other trade restrictions that may have a material impact on our business.
Although we believe our tax estimates are reasonable, there can be no assurance that any final determination will not be materially different from the treatment reflected in our historical income tax (benefits) expenses and accruals, which could materially and adversely affect our financial condition and results of operations. ​ International trade disputes could result in additional or increased tariffs, export controls or other trade restrictions that may have a material impact on our business. ​ We sell a significant number of products outside the United States, including in China and Africa.
We cannot guarantee that we will be successful in leveraging our capabilities into the life sciences sample management and genomic services markets to meet all the needs of new customers and to compete favorably.
We cannot guarantee that we will be successful in leveraging our capabilities into the life sciences sample management and genomic services markets or identifying and successfully acquiring other businesses, products, services or technologies to meet all the needs of new customers and to compete favorably with other products and services.
Such shares of preferred stock could have preferences over our common stock with respect to dividends and liquidation rights. Our issuance of preferred stock may have the effect of delaying or preventing a change in control.
Such shares of preferred stock could have preferences over our common stock with respect to dividends and liquidation rights. Our designation and issuance of preferred stock, including in connection with the adoption of a stockholders rights plan, or “poison pill,” may have the effect of delaying or preventing a change in control.
Any or all of these factors could materially and adversely affect our business, financial condition and results of operations. 14 Table of Contents Our business relies on certain critical information systems and a failure or breach of such a system could harm our business and results of operations and, in the event of unauthorized access to a customer’s data or our data, incur significant legal and financial exposure and liabilities.
Our business relies on certain critical information systems and a failure or breach of such a system could harm our business and results of operations and, in the event of unauthorized access to a customer’s data or our data, incur significant legal and financial exposure and liabilities.
On November 4, 2022, our Board of Directors approved a new share repurchase program authorizing the repurchase of up to $1.5 billion of our common stock, or the 2022 Repurchase Program.
On November 4, 2022, our Board of Directors approved a new share repurchase authorization for the repurchase of up to $1.5 billion of our common stock (the “2022 Repurchase Authorization”).
Regulations and customer demands related to conflict minerals may adversely affect us. The Dodd-Frank Wall Street Reform and Consumer Protection Act imposes disclosure requirements regarding the use in components of our products of “conflict minerals” mined from the Democratic Republic of Congo and adjoining countries, whether the components of our products are manufactured by us or third parties.
The Dodd-Frank Wall Street Reform and Consumer Protection Act imposes disclosure requirements regarding the use in components of our products of “conflict minerals” mined from the Democratic Republic of Congo and adjoining 17 Table of Contents countries, whether the components of our products are manufactured by us or third parties.
Although we believe these provisions provide for an opportunity to receive a higher bid by requiring potential acquirers to negotiate with our Board of Directors, these provisions apply even if the offer may be considered beneficial by stockholders. If a change of control or change in management is delayed or prevented, the market price of our common stock could decline.
Although we believe these provisions provide for an opportunity to receive a higher bid by requiring potential acquirers to negotiate with our Board of Directors, these provisions apply even if the offer may be considered beneficial by stockholders.
Our restated certificate of incorporation and by-laws and Delaware law contain provisions that could make it harder for a third party to acquire us without the consent of our Board of Directors.
Provisions in our charter documents and Delaware law may delay or prevent an acquisition of us, which could decrease the value of your shares. Our restated certificate of incorporation and by-laws and Delaware law contain provisions that could make it harder for a third party to acquire us without the consent of our Board of Directors.
If a judgment of infringement were obtained against us, we could be required to pay substantial damages and a court could issue an order preventing us from selling one or more of our products or offering certain of our services.
If a judgment of infringement were obtained against us, we could be required to pay substantial damages and a court could issue an order preventing us from selling one or more of our products or offering certain of our services. 18 Table of Contents Further, the cost and diversion of management attention brought about by such litigation could be substantial, even if we were to prevail.
Our ability to repurchase common stock under the 2022 Repurchase Program will depend upon, among other factors, our cash balances and potential future capital requirements for strategic investments, whether organic or through acquisitions, our results of operations, our financial condition and other factors beyond our control that we may deem relevant to a decision to repurchase common stock under the 2022 Repurchase Program.
Our ability to continue to repurchase common stock, including under the other arrangements that commenced after termination of the ASR agreement and any of the remaining $500.0 million of the intended repurchases announced in November 2023, will depend upon, among other factors, our cash balances and potential future capital requirements for strategic investments, whether organic or through acquisitions, our results of operations, our financial condition and other factors beyond our control that we may deem relevant to a decision to repurchase common stock under the current arrangements.
We regularly assess the likelihood of favorable or unfavorable outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.
Internal Revenue Service and state, local and foreign tax authorities. We regularly assess the likelihood of favorable or unfavorable outcomes resulting from these examinations to determine the adequacy of our expense for income taxes.
As of September 30, 2022, we had $513.6 million of goodwill and $178.4 million in net intangible assets as a result of our acquisitions.
As of September 30, 2023, we had $784.3 million of goodwill and $294.3 million in net intangible assets as a result of our acquisitions.
Changes in applicable tax laws could significantly impact the estimates of our tax assets and liabilities, as well as expectations of future effective tax rates. In addition, we are subject to regular examination by the U.S. Internal Revenue Service and state, local and foreign tax authorities.
Changes in applicable tax laws could significantly impact the estimates of our tax assets and liabilities, as well as expectations of future effective tax rates. Changes in tax laws could also negatively impact our ability to move our cash balances between the jurisdictions in which we operate. In addition, we are subject to regular examination by the U.S.
In some cases, we have only a single source of supply for key components and materials used in the manufacturing of our products. Further, a portion of our supply is sourced from Asia, including China and we do not always have a previous history of dealing with these suppliers.
Further, a portion of our supply is sourced from Asia, including China and we do not always have a previous history of dealing with these suppliers.
Increases in tariffs, additional taxes or other trade restrictions and retaliatory measures may increasingly impact customer demand and customer investment in manufacturing equipment, increase our manufacturing costs, decrease margins, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial condition.
Increases in tariffs, additional taxes or other trade restrictions and retaliatory measures may increasingly impact customer demand and customer investment in manufacturing equipment, increase our manufacturing costs, decrease margins, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial condition. ​ We are subject to numerous governmental regulations. ​ We are subject to federal, state, local and foreign regulations, including environmental regulations, regulations relating to the design and operation of our products and control systems and regulations relating to certain of our service offerings, including those described above under Item 1 “Business-Environmental Matters and Governance Regulations” above.
This requirement could affect the pricing, sourcing and availability of minerals used in the manufacture of components we use in our products. In addition, there are additional costs associated with complying with the disclosure requirements and customer requests, such as costs related to our due diligence to determine the source of any conflict minerals used in our products.
In addition, there are additional costs associated with complying with the disclosure requirements and customer requests, such as costs related to our due diligence to determine the source of any conflict minerals used in our products and preparing and filing required reports with respect thereto with the SEC.
If we purchase inventory in anticipation of customer demand that does not materialize, or if our customers reduce or delay orders, we may incur excess inventory charges.
If we purchase inventory in anticipation of customer demand that does not materialize, or if our customers reduce or delay orders, we may incur excess inventory charges. Any or all of these factors could materially and adversely affect our business, financial condition and results of operations.
A key part of our growth strategy is to continue expanding within the life sciences sample management and genomic services markets. As part of this strategy, we expect to diversify our product sales and service revenue by leveraging our core technologies, which requires investments and resources which may not be available on favorable terms or at all when needed.
As part of this strategy, we expect to diversify our product sales and service revenue by leveraging our core technologies and making acquisitions of select businesses, products, services or technologies, which requires investments and resources which may not be available on favorable terms or at all.
Additionally, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to 19 Table of Contents attract and retain qualified personnel.
Additionally, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, we have and may be required to incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters.
In addition, approximately $1 billion of the proceeds from the recently completed sale of the semiconductor automation business is held outside the United States and our ability to repatriate any of the funds for use in the United States or elsewhere in our business may be limited, which could negatively impact our opportunities to deploy capital, including for our recently approved share repurchase program.
We hold approximately $569 million of cash outside the United States and our ability to repatriate any of the funds for use in the United States or elsewhere in our business may be limited based on local country statutory requirements, which could negatively impact our opportunities to deploy capital, including for our share repurchase authorization.
Risks Related to Reliance on Third Parties Our business could be materially harmed if one or more key suppliers fail to continuously deliver key components of acceptable cost and quality. We currently obtain many of our key components on an as-needed, purchase order basis from numerous suppliers.
Any of these events could result in significant expense to us and may materially harm our business and our prospects. Risks Related to Reliance on Third Parties Our business could be materially harmed if one or more key suppliers fail to continuously deliver key components of acceptable cost and quality.
Also, we may be required to incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters. Further, the price of our common stock could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.
Further, the price of our common stock could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism. In addition, stockholder activism may constrain our capital deployment opportunities and may limit the types of investments that are available to us.
We sell a significant number of products outside the United States, including in China and Japan. Based on the complex relationships among these countries and the United States, there is inherent risk that political, diplomatic and national security influences might lead to trade disputes, impacts and/or disruptions.
Based on the complex relationships among these countries and the United States, there is inherent risk that political, diplomatic and national security influences might lead to trade disputes, impacts and/or disruptions. The United States and other countries have imposed and may continue to impose trade restrictions and have also levied tariffs and taxes on certain goods.
Any impairment or revised useful life could have a material and adverse effect on our financial position and results of operations and could harm the trading price of our common stock. Changes in tax rates or tax regulation could affect results of operations. As a global company, we are subject to taxation in the United States and various other countries.
Any impairment or revised useful life could have a material and adverse effect on our financial position and results of operations and could harm the trading price of our common stock. As of October 1, 2023, the company reorganized the business under three operating segments, and as a result, reallocated goodwill to the newly defined reporting units.
These provisions include limitations on actions by our stockholders by written consent, the inability of stockholders to call special meetings and the potential for super majority votes of our stockholders in certain circumstances.
These provisions include limitations on actions by our stockholders by written consent, the inability of stockholders to call special meetings, requiring advance 21 Table of Contents notice in accordance with our by-laws for stockholder proposals that can only be acted upon at annual stockholder meetings and nominations to our Board of Directors, limiting the approval of changes in the number of directors to our Board of Directors or by a super majority vote of our stockholders and the potential for super majority votes of our stockholders in certain other circumstances.
Significant judgment is required to determine and estimate worldwide tax liabilities.
As a global company, we are subject to taxation in the United States and various other countries. Significant judgment is required to determine and estimate worldwide tax liabilities.
Our restated certificate of incorporation authorizes the issuance of shares of blank check preferred stock.
If a change of control or change in management is delayed or prevented by these provisions, the market price of our common stock could decline. Our restated certificate of incorporation authorizes the issuance of shares of blank check preferred stock.
In addition, approximately $1 billion of the cash was received upon the completion of the sale of our semiconductor automation business on February 1, 2022, is denominated in Euro, which represents a substantial portion of our current cash balance.
We hold approximately $546 million of cash and cash equivalents that is denominated in foreign currency, which represents a substantial portion of our current cash and cash equivalents balance.
Removed
The United States and other countries have imposed and may continue to impose trade restrictions and have also levied tariffs and taxes on certain goods.
Added
These impacts may be of greater magnitude in certain jurisdictions in which we and our customers operate that are impacted by these threats or react to the threats with more stringent policies. ​ For example, the COVID-19 pandemic impacted the world economy and our business results and operations since 2020.
Removed
We are subject to numerous governmental regulations. We are subject to federal, state, local and foreign regulations, including environmental regulations, regulations relating to the design and operation of our products and control systems and regulations relating to certain of our service offerings, including those described above under “Business-Environmental Matters and Governance Regulations”.
Added
Moreover, in many foreign countries, particularly in those with developing economies, there is an increased risk of corruption and/or bribery, which could lead to violations of various laws and regulations, including the Foreign Corrupt Practices Act.
Removed
Further, the cost and diversion of management attention brought about by such litigation could be substantial, even if we were to prevail. Any of these events could result in significant expense to us and may materially harm our business and our prospects.
Added
While such business practices are prohibited by our internal policies and procedures, there can be no assurance that all our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, will comply with these policies and procedures, or the applicable anti-bribery laws and regulations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe maintained the following principal facilities as of September 30, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage Ownership Status/Lease Location ​ Functions ​ (Approx.) ​ Expiration Suzhou, China ​ Laboratory & office ​ 240,000 ​ Owned Indianapolis, Indiana Sample storage, sales & support 116,700 September 2038 South Plainfield, New Jersey ​ Laboratory & office ​ 73,300 ​ January 2030 Plainfield, Indiana ​ Manufacturing, R&D and sales & support ​ 67,900 ​ August 2032 Springfield, Illinois ​ Manufacturing, R&D and sales & support ​ 65,100 ​ May 2026 Burlington, Massachusetts ​ Future corporate headquarters ​ 42,000 ​ October 2025 Chelmsford, Massachusetts Corporate headquarters, training, R&D and sales & support 26,200 January 2024 ​ ​ ​ Our Chelmsford, Massachusetts facility was included in the sale of our semiconductor automation business and upon the completion of the sale, we leased space in this facility as we transition to a new corporate headquarters in Burlington, Massachusetts.
Biggest changeWe maintained the following principal facilities as of September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage Ownership Status/ Location ​ Functions ​ Segment ​ (Approx.) ​ Lease Expiration Suzhou, China ​ Laboratory & office ​ Services ​ 240,000 ​ Owned Hosingen, Luxembourg ​ B Medical headquarters & manufacturing ​ Products ​ 228,000 ​ Owned Indianapolis, Indiana Sample storage, sales & support Services ​ 116,700 September 2033 South Plainfield, New Jersey ​ Laboratory & office ​ Services ​ 73,300 ​ January 2030 Plainfield, Indiana ​ Manufacturing, R&D and sales & support ​ Services ​ 67,900 ​ August 2032 Springfield, Missouri ​ Manufacturing, R&D and sales & support ​ Products ​ 50,100 ​ December 2028 Manchester, United Kingdom ​ Manufacturing & office ​ Products ​ 45,000 ​ December 2029 Burlington, Massachusetts ​ Corporate headquarters, training, R&D and sales & support ​ Products & Services ​ 42,500 ​ October 2025 ​ In addition to the principal facilities listed above, we maintain additional laboratories, biorepositories, and sales and support offices throughout North America, Europe, and Asia.
Item 2. Properties Our corporate headquarters are currently located in Chelmsford, Massachusetts.
Item 2. Properties Our corporate headquarters are currently located in Burlington, Massachusetts.
Removed
In addition to the principal facilities listed above, we maintain additional laboratories, biorepositories, and sales and support offices in Canada, Europe, Asia, and throughout the United States. ​
Added
The Company believes that its facilities are in good physical condition, are suitable and adequate for the operations conducted at those facilities and are generally fully utilized and operating at normal capacity. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn 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.
Biggest changeIn 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 4.
However, as of the date of this Form 10-K, we believe that none of these claims will have a material adverse effect on our consolidated financial condition or results of operations.
However, as of the date of this Annual Report on Form 10-K, we believe that none of these claims will have a material adverse effect on our consolidated financial condition or results of operations.
Item 4. Mine Safety Disclosures Not applicable. 21 Table of Contents ​ PART II
Mine Safety Disclosures Not applicable. 23 Table of Contents ​ PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRepurchases under the 2022 Repurchase Program may be made in the open market or through privately negotiated transactions (including under an accelerated share repurchase, or ASR, agreement), or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, subject to market and business conditions, legal requirements, and 23 Table of Contents other factors.
Biggest changeFollowing the termination of the ASR Agreement, other arrangements under the 2022 Repurchase Authorization commenced under which we expect to repurchase up to an additional $500.0 million shares of our common stock in open market purchases, intended to qualify under Rule 10b5-1 under the Exchange Act, subject to market and business conditions, legal requirements, and other factors.
Comparative Stock Performance The following graph compares the cumulative total shareholder return (assuming reinvestment of dividends) from investing $100 on September 30, 2017, and plotted at the last trading day of each of the fiscal years ended September 30, 2018, 2019, 2020, 2021 and 2022, in each of (i) our Common Stock; (ii) the Nasdaq/NYSE American/NYSE Index of companies; and (iii) a peer group for the fiscal year ended September 30, 2022.
Comparative Stock Performance The following graph compares the cumulative total shareholder return (assuming reinvestment of dividends) from investing $100 on September 30, 2018, and plotted at the last trading day of each of the fiscal years ended September 30, 2019, 2020, 2021, 2022 and 2023, in each of (i) our Common Stock; (ii) the Nasdaq/NYSE American/NYSE Index of companies; and (iii) a peer group for the fiscal year ended September 30, 2023.
The 2022 peer Group for the year ended September 30, 2022 is comprised of Angiodynamics Inc, Caredx Inc, Certara Inc, Haemonetics Corp, Icu Medical Inc, Integra Lifesciences Holdings Corp, Maravai Lifesciences Holdings Inc, Medpace Holdings Inc, Neogenomics Inc, Nuvasive Inc, Orasure Technologies Inc, Repligen Corp, Sotera Health Co, and Varex Imaging Corp.
The 2023 peer group for the year ended September 30, 2023 is comprised of Angiodynamics Inc, Caredx Inc, Certara Inc, Haemonetics Corp, Icu Medical Inc, Integra Lifesciences Holdings Corp, Maravai Lifesciences Holdings Inc, Medpace Holdings Inc, Neogenomics Inc, Orasure Technologies Inc, Repligen Corp, Sotera Health Co, and Varex Imaging Corp.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Stock Market LLC, or Nasdaq under the symbol “AZTA.” Number of Holders As of November 14, 2022, there were 492 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Stock Market LLC, or Nasdaq under the symbol “AZTA.” Number of Holders As of November 13, 2023, there were 476 holders of record of our common stock.
Removed
The peer group for 2022 was updated to remove semiconductor automation companies, as we no longer serve that market following the sale of the semiconductor automation business on February 1, 2022.
Added
Nuvasive Inc. was removed from the Company’s peer group in 2023 as the result of its sale to another company in 2023.
Removed
The 2021 peer Group for the year ended September 30, 2022 is comprised of Advanced Energy Industries Inc, Axcelis Technologies Inc, Bio Rad Laboratories Inc, Bruker Corp, Coherent Corp, Entegris Inc, Formfactor Inc, Haemonetics Corp, Mks Instruments Inc, Novanta Inc, Onto Innovation Inc, Ultra Clean Holdings Inc, Varex Imaging Corp, and Veeco Instruments Inc. 22 Table of Contents The stock price performance on the graph below is not necessarily indicative of future price performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9/30/2017 9/30/2018 9/30/2019 9/30/2020 9/30/2021 9/30/2022 Azenta, Inc. ​ $ 100.00 ​ $ 116.96 ​ $ 125.14 ​ $ 157.85 ​ $ 350.95 ​ $ 147.10 Nasdaq/NYSE American/NYSE ​ 100.00 ​ 104.37 ​ 94.39 ​ 89.29 ​ 110.75 ​ 84.98 2021 Peer Group ​ 100.00 ​ 113.97 ​ 131.79 ​ 157.47 ​ 243.29 ​ 164.14 2022 Peer Group ​ ​ 100.00 ​ ​ 149.60 ​ ​ 142.24 ​ ​ 157.37 ​ ​ 232.57 ​ ​ 129.51 ​ The information included under the heading “Comparative Stock Performance” in Item 5 of Form 10-K shall not be deemed to be “soliciting material” or subject to Regulation 14A, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act.
Added
The stock price performance on the graph below is not necessarily indicative of future price performance. 24 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9/30/2018 9/30/2019 9/30/2020 9/30/2021 9/30/2022 9/30/2023 Azenta, Inc. ​ $ 100.00 ​ $ 106.99 ​ $ 134.96 ​ $ 300.06 ​ $ 125.77 ​ $ 147.28 Nasdaq/NYSE American/NYSE ​ 100.00 ​ 97.10 ​ 97.93 ​ 125.19 ​ 98.02 ​ 118.20 Peer Group ​ ​ 100.00 ​ ​ 95.85 ​ ​ 110.03 ​ ​ 164.73 ​ ​ 90.53 ​ ​ 87.86 ​ The information included under the heading “Comparative Stock Performance” in this Item 5 of this Annual Report on Form 10-K shall not be deemed to be “soliciting material” or subject to Regulation 14A, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act. ​ 25 Table of Contents Issuer Purchases of Equity Securities The following provides information about our fourth quarter 2023 repurchases of our common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ Total Number of Shares ​ Approximate Dollar Value ​ ​ ​ ​ Number of ​ Average ​ Purchased As Part of ​ Of Shares That May ​ ​ ​ ​ Shares ​ Price Paid ​ Publicly Announced ​ Yet Be Purchased ​ ​ ​ ​ Purchased ​ Per Share ​ Plans or Programs ​ (in millions) Period of Repurchase ​ Repurchase Program ​ (#) (1) ​ ($) (1) ​ (1) ​ ($) July 1 - 31, 2023 ​ Open market repurchase ​ 1,481,897 ​ $ 46.00 ​ 15,526,586 ​ $ 760 August 1-31, 2023 ​ Open market repurchase ​ 1,399,128 ​ ​ 51.58 ​ 16,925,714 ​ ​ 688 September 1-30, 2023 ​ Open market repurchase ​ 529,297 ​ ​ 49.13 ​ 17,455,011 ​ ​ 662 Total ​ ​ ​ 3,410,322 ​ $ 48.78 ​ ​ ​ ​ ​ ​ On November 4, 2022, our Board of Directors approved a share repurchase authorization for the repurchase of up to $1.5 billion of our common stock (the “2022 Repurchase Authorization”) and terminated our previously authorized $50.0 million share repurchase authorization.
Removed
Issuer’s Purchases of Equity Securities On September 29, 2015, our Board of Directors approved a share repurchase program for up to $50 million of our common stock, or the 2015 Repurchase Program.
Added
In November 2022, as part of the 2022 Repurchase Authorization, we entered into an accelerated share repurchase agreement (the “ASR Agreement”) with JPMorgan Chase Bank, National Association for the repurchase of up to $500.0 million of our common stock which terminated and settled in April 2023.
Removed
On November 4, 2022, our Board of Directors terminated the 2015 Repurchase Program and approved a new share repurchase program authorizing the repurchase of up to $1.5 billion of our common stock, or the 2022 Repurchase Program.
Added
During the three months ended September 30, 2023, we repurchased approximately 3.4 million shares of common stock for approximately $166.3 million (excluding fees, commissions, and excise tax) through open market repurchases under these other arrangements. ​ Item 6. [Reserved] ​ ​ ​
Removed
We are not obligated to acquire any particular amount of common stock under the 2022 Repurchase Program, and share repurchases may be commenced or suspended at any time at our discretion. As part of the 2022 Repurchase Program, we expect to enter into an ASR agreement for the repurchase of up to $500 million of our common stock.
Removed
There were no repurchases of our common stock during the fiscal year ended September 30, 2022 and no such repurchases thereafter under the 2015 Repurchase Program. ​ Item 6. [Reserved] ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

82 edited+53 added−74 removed28 unchanged
Biggest changeRevenue generated outside the United States amounted to $184.9 million, or 33% of total revenue, for fiscal year 2022 compared to $192.9 million, or 38% of total revenue, for fiscal year 2021. 32 Table of Contents ​ Operating Income (Loss) Our operating performance for the twelve months ended September 30, 2022, 2021 and 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, Dollars in thousands ​ 2022 ​ 2021 ​ 2020 Revenue: ​ ​ ​ ​ Life Sciences Products $ 199,230 ​ $ 199,606 ​ $ 129,759 ​ Life Sciences Services 356,268 ​ 314,097 ​ 258,778 ​ Total revenue $ 555,498 ​ $ 513,703 ​ $ 388,537 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income: ​ ​ ​ ​ ​ ​ ​ ​ Life Sciences Products $ 11,033 ​ $ 23,094 ​ $ (3,041) ​ Life Sciences Products adjusted operating margin ​ 6 % ​ 12 % ​ (2) % Life Sciences Services $ 10,784 ​ $ 22,659 ​ $ 2,859 ​ Life Sciences Services adjusted operating margin ​ 3 % ​ 7 % ​ 1 % Segment adjusted operating income $ 21,817 ​ $ 45,753 ​ $ (182) ​ Total segment adjusted operating margin ​ 4 % ​ 9 % ​ (0) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of completed technology ​ 7,325 ​ ​ 8,073 ​ ​ 8,099 ​ Restructuring related charges ​ — ​ ​ — ​ ​ 301 ​ Impairment of intangible assets ​ — ​ ​ 13,364 ​ ​ — ​ Amortization of acquired intangible assets ​ 24,965 ​ ​ 29,299 ​ ​ 27,276 ​ Restructuring charges ​ 712 ​ ​ 385 ​ ​ 674 ​ Tariff adjustment ​ (484) ​ ​ 5,414 ​ ​ — ​ Other unallocated corporate expenses ​ 14,034 ​ ​ 20,307 ​ ​ 68 ​ Total operating loss $ (24,735) ​ $ (31,089) ​ $ (36,600) ​ Total operating margin ​ (4) % ​ (6) % ​ (9) % ​ We reported an operating loss of $24.7 million for fiscal year 2022 compared to an operating loss of $31.1 million for fiscal year 2021.
Biggest changeNo individual customer accounted for more than 10% of our consolidated revenue for the fiscal year ending 2022. ​ 33 Table of Contents Operating Income (Loss) Our operating performance for the twelve months ended September 30, 2023, 2022 and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Life Science Products ​ ​ Life Science Services ​ ​ ​ Year Ended September 30, ​ ​ Year Ended September 30, ​ Dollars in thousands ​ 2023 ​ 2022 ​ 2021 ​ ​ 2023 ​ 2022 ​ 2021 ​ Revenue: ​ $ 305,184 ​ $ 199,230 ​ $ 199,606 ​ ​ $ 359,888 ​ $ 356,268 ​ $ 314,097 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ $ (30,321) ​ $ 11,033 ​ $ 21,971 ​ ​ $ (14,722) ​ $ 10,784 ​ $ 10,289 ​ Amortization of completed technology ​ ​ 13,194 ​ ​ 1,122 ​ ​ 1,117 ​ ​ ​ 5,300 ​ ​ 6,202 ​ ​ 6,957 ​ Purchase accounting impact on inventory ​ ​ 9,664 ​ ​ — ​ ​ — ​ ​ ​ — ​ ​ — ​ ​ — ​ Amortization of other intangibles ​ ​ 1,567 ​ ​ — ​ ​ — ​ ​ ​ 110 ​ ​ — ​ ​ — ​ Tariff adjustment ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ — ​ ​ (484) ​ ​ 5,497 ​ Other adjustments ​ ​ (1) ​ ​ — ​ ​ 6 ​ ​ ​ — ​ ​ 345 ​ ​ (84) ​ Total adjusted operating income (loss) ​ $ (5,897) ​ $ 12,155 ​ $ 23,094 ​ ​ $ (9,312) ​ $ 16,847 ​ $ 22,659 ​ Operating margin ​ ​ (9.9) % ​ 5.5 % ​ 11.0 % ​ ​ (4.1) % ​ 3.0 % ​ 3.3 % Adjusted operating margin ​ ​ (1.9) % ​ 6.1 % ​ 11.6 % ​ ​ (2.6) % ​ 4.7 % ​ 7.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ Azenta Total ​ ​ ​ Year Ended September 30, ​ ​ Year Ended September 30, ​ Dollars in thousands ​ 2023 ​ 2022 ​ 2021 ​ ​ 2023 ​ 2022 ​ 2021 ​ Revenue: ​ $ — ​ $ — ​ $ — ​ ​ $ 665,072 ​ $ 555,498 ​ $ 513,703 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ $ (28,083) ​ $ (46,552) ​ $ (63,349) ​ ​ $ (73,126) ​ $ (24,735) ​ $ (31,089) ​ Amortization of completed technology ​ ​ — ​ ​ — ​ ​ (1) ​ ​ ​ 18,494 ​ ​ 7,324 ​ ​ 8,073 ​ Purchase accounting impact on inventory ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ 9,664 ​ ​ — ​ ​ — ​ Impairment of intangible assets ​ ​ — ​ ​ — ​ ​ 13,364 ​ ​ ​ — ​ ​ — ​ ​ 13,364 ​ Amortization of other intangibles ​ ​ 28,207 ​ ​ 24,965 ​ ​ 29,299 ​ ​ ​ 29,884 ​ ​ 24,965 ​ ​ 29,299 ​ Tariff adjustment ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ — ​ ​ (484) ​ ​ 5,497 ​ Rebranding and transformation costs ​ ​ (49) ​ ​ 2,741 ​ ​ 827 ​ ​ ​ (49) ​ ​ 2,741 ​ ​ 827 ​ Restructuring charges ​ ​ 4,577 ​ ​ 712 ​ ​ 385 ​ ​ ​ 4,577 ​ ​ 712 ​ ​ 385 ​ Contingent consideration - fair value adjustments ​ ​ (18,549) ​ ​ 600 ​ ​ — ​ ​ ​ (18,549) ​ ​ 600 ​ ​ — ​ Merger and acquisition costs and costs related to share repurchase (1) ​ ​ 13,842 ​ ​ 17,329 ​ ​ 20,662 ​ ​ ​ 13,842 ​ ​ 17,329 ​ ​ 20,662 ​ Other adjustments ​ ​ — ​ ​ (345) ​ ​ (5) ​ ​ ​ (1) ​ ​ — ​ ​ (83) ​ Total adjusted operating income (loss) ​ $ (55) ​ $ (550) ​ $ 1,182 ​ ​ $ (15,264) ​ $ 28,452 ​ $ 46,935 ​ Operating margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11.0) % ​ (4.5) % ​ (6.1) % Adjusted operating margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2.3) % ​ 5.1 % ​ 9.1 % (1) Includes expenses related to governance-related matters. ​ ​ We generated an operating loss of $73.1 million for fiscal year 2023 compared to an operating loss of $24.7 million in the prior fiscal year.
Financing Activities Cash outflows for financing activities were $62.8 million for the year ended September 30, 2022 which primarily consisted of cash outflows of $49.7 million to extinguish the term loan, $10.4 million for the payments of acquisition related contingent consideration, $7.5 million related to dividend payments, $0.4 million payment of finance leases, partially offset by $5.2 million of proceeds from the issuance of common stock.
Cash outflows for financing activities were $62.8 million for the year ended September 30, 2022 which primarily consisted of cash outflows of $49.7 million to extinguish the term loan, $10.4 million for the payments of acquisition related contingent consideration, $7.5 million related to dividend payments, $0.4 million payment of finance leases, partially offset by $5.2 million of proceeds from the issuance of common stock.
Cash outflows from operating activities of $466 million for the fiscal year ended September 30, 2022, resulted from net income of $2.1 billion, adjusted to exclude the effect of non operating items of $2.5 billion, and an increase in net operating assets of $507 million.
Cash outflows from operating activities of $466.0 million for the fiscal year ended September 30, 2022, resulted from net income of $2.1 billion, adjusted to exclude the effect of non-operating items of $2.5 billion, and an increase in net operating assets of $507 million.
Actual results may vary from these estimates that may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first.
Actual results may vary from these estimates and may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first.
We also maintain valuation allowances against net deferred tax assets in certain foreign tax-paying components as of the end of fiscal year 2022. Stock-Based Compensation We measure compensation cost for all employee stock awards at fair value on the date of grant and recognize compensation expense over the service period for awards expected to vest.
We also maintain valuation allowances against net deferred tax assets in certain foreign tax-paying components as of the end of fiscal year 2023. Stock-Based Compensation We measure compensation cost for all employee stock awards at fair value on the date of grant and recognize compensation expense over the service period for awards expected to vest.
Management’s Discussion and Analysis of Financial Condition and Results of Operations This 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 Consolidated Financial Statements included elsewhere in this Form 10-K.
This 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 Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
We evaluate current and anticipated worldwide economic conditions, both in general and specifically in relation to the life science industry, 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.
We evaluate current and anticipated worldwide economic conditions, both in general and specifically in relation to the life sciences industry, 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.
On July 1, 2022, we acquired Barkey Holding GmbH and its subsidiaries, or Barkey, a leading provider of controlled rate thawing devices for customers in the medical, biotech and pharmaceutical industries, headquartered in Leopoldshöhe, Germany.
On July 1, 2022, we acquired Barkey Holding GmbH and its subsidiaries (“Barkey”), a leading provider of controlled rate thawing devices for customers in the medical, biotech and pharmaceutical industries, headquartered in Leopoldshöhe, Germany.
Revenue from the sales of certain products that involve significant customization, which primarily include automated cold sample management systems is recognized over time as the asset created by our performance does not have alternative use to us and an enforceable right to payment for performance completed to date is present.
Revenue from the sales of certain products that involve significant customization, which primarily include automated cold sample management systems, is recognized over time as the asset created by our performance does not 29 Table of Contents have alternative use to us and an enforceable right to payment for performance completed to date is present.
We now support our customers from research to clinical development with our sample management, automated storage, and genomic services expertise to help our customers bring impactful therapies to market faster.
We now support our customers from research and clinical development to commercialization with our sample management, automated storage, and genomic services expertise to help our customers bring impactful therapies to the market faster.
RESULTS OF OPERATIONS Please refer to the commentary provided below for further discussion and analysis of the factors contributing to our results from operations for the twelve months ended September 30, 2022 and 2021.
RESULTS OF OPERATIONS Please refer to the commentary provided below for further discussion and analysis of the factors contributing to our results from operations for the twelve months ended September 30, 2023 and 2022.
We understand the importance of sample integrity and offer a broad portfolio of products and services supporting customers at every stage of the life cycle of samples including procurement and sourcing, automated storage systems, genomic services and a multitude of sample consumables, informatics and data software, and sample repository solutions.
We understand the importance of sample integrity and offer a broad portfolio of products and services supporting customers at every stage of the life cycle of samples including procurement and sourcing, automated storage systems, genomic services and a multitude of sample consumables, informatics and data software, along with sample repository solutions (“SRS”).
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 discusses accounting policies and estimates that require us to exercise subjective or complex judgments in their application. We believe these accounting 26 Table of Contents policies and estimates are important to understanding the assumptions and judgments incorporated in our reported financial results. ● Results of Operations.
We consider recent historical income, estimated future taxable income, carry-forward periods of tax attributes, and ongoing tax planning strategies in assessing the need for the 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 consider recent historical income, estimated future taxable income, carry-forward periods of tax attributes, and ongoing tax planning strategies in assessing the need for the valuation allowance. We evaluate the realizability of 31 Table of Contents our deferred tax assets by tax-paying component and assess the need for a valuation allowance on a quarterly basis.
Repurchases under the 2022 Repurchase Program may be made in the open market or through privately negotiated transactions (including under an accelerated share repurchase, or ASR, agreement), or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, subject to market and business conditions, legal requirements, and other factors.
Repurchases under the 2022 Repurchase Authorization may be made in the open market or through privately negotiated transactions (including under an accelerated share repurchase (“ASR”) agreement), or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Exchange Act, subject to market and business conditions, legal requirements, and other factors.
Different assumptions of revenue growth rates, gross margin percentage, selling, general and administrative expense percentage and the discount rate used in the DCF Method could result in different estimates of the reporting unit’s fair value as of each testing date.
Different assumptions of revenue growth rates, gross margin percentages, selling, general and administrative expense percentages and the discount rate used in accordance with the DCF Method could result in different estimates of the reporting units’ fair value as of each testing date .
Recently Issued Accounting Pronouncements For a summary of recently issued accounting pronouncements applicable to our Consolidated Financial Statements which is incorporated here by reference, please refer to Note 2, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of this Form 10-K.
Recently Issued Accounting Pronouncements For a summary of recently issued accounting pronouncements applicable to our Consolidated Financial Statements which is incorporated here by reference, please refer to Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Cash provided by investing activities was $1.5 billion during fiscal year 2022 and consisted of $2.9 billion of proceeds from the sale of the semiconductor automation business on February 1, 2022, net of the cash transferred; offset by $125.9 million of acquisitions, $73.4 million of capital expenditures, and $1.3 billion of net investments in marketable securities.
Cash provided by investing activities was $1.5 billion during fiscal year 2022 and consisted of $2.9 billion of proceeds from the sale of the semiconductor automation business on February 1, 2022, net of the cash transferred, and $705.4 million of sales and maturities of marketable securities; offset by $2.0 billion of purchases of marketable securities, $125.9 million of acquisitions, and $73.4 million of capital expenditures.
Our MD&A is organized as follows: ● Overview . This section provides a general description of our business and operating segments, recent developments, as well as a brief discussion and overall analysis of our business and financial performance, including key developments affecting us during fiscal years ended September 30, 2022 and 2021. ● Critical Accounting Policies and Estimates.
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 us during fiscal years ended September 30, 2023 and 2022. ● Critical Accounting Policies and Estimates.
The income from discontinued operations only includes direct operating expenses incurred that (1) are clearly identifiable as costs being disposed of upon completion of the sale and (2) will not be continued by our company on an ongoing basis.
Net income from fiscal year 2022 is comprised of the gain on the sale of the semiconductor business. The income from discontinued operations only includes direct operating expenses incurred that (1) are clearly identifiable as costs being disposed of upon completion of the sale and (2) will not be continued by our company on an ongoing basis.
Intangible assets other than goodwill and long-lived assets are subject to impairment testing if events and circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. The goodwill impairment test is performed at the reporting unit level.
Goodwill is tested for impairment annually or more often if impairment indicators are present, at the reporting unit level. Intangible assets other than goodwill and long-lived assets are subject to impairment testing if events and circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable.
We continue to develop new products and services offerings and enhance existing and acquired offerings through the expertise of our research and development resources. We believe our approach of acquisition, investment, and integration has allowed us to accelerate our internal development and significantly accelerate our time to market.
We continue to develop new product and service offerings and enhance existing and acquired offerings through the expertise of our research and development resources. We believe our acquisition, investment and integration approach has allowed us to accelerate internal development and significantly accelerate time to market for our life sciences solutions.
China Facility In April 2019, we committed to construct a facility in Suzhou China, to consolidate the Suzhou operations of our genomic services business and provide infrastructure to support future growth. The facility is being constructed in two phases. During the third fiscal quarter of 2022, we completed the construction of phase one of the facility.
China Facility In April 2019, we committed to construct a facility in Suzhou China, to consolidate the Suzhou operations of our genomic services business and provide infrastructure to support future growth. The facility is being constructed in two phases.
Revenue Recognition We generate revenue from the sale of products and services. A description of our revenue recognition policies is included in the Note 2, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.
Revenue Recognition We generate revenue from the sale of products and services. A description of our revenue recognition policies is included in Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
We entered the life sciences market in 2011, leveraging our in-house capabilities of precision automation and cryogenics that we applied significantly in the semiconductor market, to provide solutions for automated ultra cold storage. Since then, we have expanded our offerings both organically and through a series of acquisitions.
We entered the life sciences market in 2011, leveraging our in-house precision automation and cryogenics capabilities that we were then applying in the semiconductor manufacturing market. This led us to provide solutions for automated ultra-cold storage. Since then, we have expanded our life sciences offerings through internal investments and through a series of acquisitions.
Our expertise, global footprint and leadership position enables us to be a trusted partner to pharmaceutical, biotechnology, and life sciences research institutions globally. In total, we employed approximately 3,200 full-time employees, part-time employees and contingent workers worldwide as of September 30, 2022 and have sales in approximately 100 countries .
Our expertise, global footprint and leadership positions enable us to be a trusted global partner to pharmaceutical, biotechnology and life sciences research institutions. In total, we employ approximately 3,500 full-time employees, part-time employees and contingent workers worldwide as of September 30, 2023 and have sales in approximately 150 countries .
In connection with the planned divestiture of the semiconductor automation business and our continued focus on our life sciences businesses, we changed our corporate name from “Brooks Automation, Inc.” to “Azenta, Inc.” and our common stock started to trade on the Nasdaq Global Select Market under the symbol “AZTA” on December 1, 2021.
Lee, Partners, L.P., for $2.9 billion in cash. In connection with the divestiture of the semiconductor automation business and our continued focus on our life sciences businesses, we changed our corporate name from “Brooks Automation, Inc.” to “Azenta, Inc.” and our common stock began trading on the Nasdaq Global Select Market under the symbol “AZTA” on December 1, 2021.
Gross margin decreased 1.7 percentage points in the Life Sciences Products segment and 1.4 percentage points in the Life Sciences Services segment for fiscal year 2022 compared to the prior fiscal year. Our Life Sciences Products segment reported gross margins of 44.7% for fiscal year 2022 compared to 46.4% for fiscal year 2021.
Gross margin decreased 11.6 percentage points in the Life Sciences Products segment and 1.7 percentage points in the Life Sciences Services segment for fiscal year 2023 compared to the prior fiscal year. Our Life Sciences Products segment reported gross margin of 33.2% for fiscal year 2023 compared to 44.7% in the prior fiscal year.
For further information on our reportable and operating segments, please refer to Note 18, “Segment 25 Table of Contents and Geographic Information” to our Consolidated Financial Statements included under Item 8, “Financial Statements and Supplementary Data” of this Form 10- K.
For further information on our reportable and operating segments, please refer to Note 19, Segment and Geographic Information to our Consolidated Financial Statements included under Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
On November 4, 2022, our Board of Directors terminated the 2015 Repurchase Program and approved a new share repurchase program authorizing the repurchase of up to $1.5 billion of our common stock, or the 2022 Repurchase Program.
Share Repurchase Program On September 29, 2015, our Board of Directors approved an authorization to repurchase up to $50.0 million of our common stock. On November 4, 2022, our Board of Directors terminated the existing share repurchase authorization and approved a new authorization to repurchase up to $1.5 billion of our common stock (the “2022 Repurchase Authorization”).
We estimate a loss on a contract by comparing total estimated contract revenue to the total estimated contract costs and recognize a loss during the period in which it becomes probable and can be reasonably estimated.
We estimate a loss on a contract by comparing total estimated contract revenue to the total estimated contract costs and recognize a loss during the period in which it becomes probable and can be reasonably estimated. We review profit estimates for long-term contracts during each reporting period and revise the estimate based on changes in circumstances.
Business Combinations We account for business acquisitions using the purchase method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values.
Business Combinations We account for business acquisitions using the purchase method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. Significant judgment is used in determining fair values of assets acquired, liabilities assumed, and contingent consideration, as well as intangibles and their estimated useful lives.
This section provides an analysis of our financial results for the fiscal year ended September 30, 2022 compared to the fiscal year ended September 30, 2021. ● Liquidity and Capital Resources. This section provides an analysis of our liquidity and changes in cash flows, as well as a discussion of contractual commitments.
This section provides an analysis of our financial results for the fiscal year ended September 30, 2023 compared to the fiscal year ended September 30, 2022. ● Liquidity and Capital Resources.
The interest expense for fiscal year 2022 is primarily related to interest on cash held in one of our German subsidiaries that is denominated in EUR, which carries a negative interest rate. Interest expense for fiscal year 2021 is primarily related to interest expense on our former term loan.
Interest expense – During fiscal years 2023 and 2022, we recorded interest expense of $0.0 million and $4.6 million, respectively. The interest expense for fiscal year 2022 is primarily related to interest on cash held in one of our German subsidiaries that is denominated in EUR, which carries a negative interest rate.
The effects of foreign exchange reduced the cash balance by $180.8 million. ​ Please refer to the “Liquidity and Capital Resources” section below for a detailed discussion of our liquidity and changes in cash flows for fiscal year 2022 compared to fiscal year 2021. ​ ​ CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of the 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.
Please refer to the “Results of Operations” section below for a detailed discussion of our financial results for fiscal year 2023 compared to fiscal year 2022. ​ CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of the 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.
The key inputs used in the DCF Method include revenue growth rates, gross margin percentage, selling, general and administrative expense percentage and discount rates that are at or above our weighted-average cost of capital.
The DCF Method is based on projected future cash flows and terminal value estimates discounted to their present values. The key inputs used in the DCF Method include revenue growth rates, gross margin percentages, selling, general and administrative expense percentages and discount rates that are at or above our weighted average cost of capital.
The discussion of our cash flows and liquidity that follows does not include the impact of any adjustments to remove discontinued operations, unless otherwise noted, and is stated on a total company consolidated basis.
Overview of Cash Flows and Liquidity The discussion of our cash flows and liquidity that follows is stated on a total company consolidated basis and excludes the impact of discontinued operations.
We process millions of samples every year, each containing valuable information that must be preserved with the sample. Our genomic services provide a broad capability to customers for sequencing and synthesis of genes. Our sample management services include off-site storage services, transport services, laboratory services, and interactive informatics solutions.
We process millions of samples annually, each containing valuable information that must be preserved with the sample. Our genomic services provide a broad capability to customers for gene sequencing, synthesis, editing and related services.
Please refer to Note 18, “Segment and Geographic Information”. 33 Table of Contents Gross Margin Our gross margin performance for the twelve months ended September 30, 2022, 2021 and 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Life Science Products ​ Life Science Services ​ Azenta Total ​ ​ ​ Year Ended September 30, ​ Year Ended September 30, ​ Year Ended September 30, ​ Dollars in thousands ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ Revenue ​ $ 199,230 ​ ​ $ 199,606 ​ ​ $ 129,759 ​ $ 356,268 ​ ​ $ 314,097 ​ ​ $ 258,778 ​ $ 555,498 ​ ​ $ 513,703 ​ ​ $ 388,537 ​ Gross profit ​ 89,074 ​ ​ 92,560 ​ ​ 55,718 ​ 166,523 ​ ​ 151,246 ​ ​ 116,428 ​ ​ 255,597 ​ ​ 243,806 ​ ​ 172,146 ​ Gross margin ​ ​ 44.7 % ​ ​ 46.4 % ​ ​ 42.9 % ​ 46.7 % ​ ​ 48.2 % ​ ​ 45.0 % ​ 46.0 % ​ ​ 47.5 % ​ ​ 44.3 % Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of completed technology ​ 1,122 ​ ​ 1,117 ​ ​ 1,165 ​ 6,202 ​ ​ 6,957 ​ ​ 6,935 ​ 7,324 ​ ​ 8,074 ​ ​ 8,100 ​ Other adjustment ​ ​ — ​ ​ — ​ ​ — ​ 289 ​ ​ (83) ​ ​ 301 ​ 289 ​ ​ (83) ​ ​ 301 ​ Tariff adjustment ​ — ​ ​ — ​ ​ — ​ (484) ​ ​ 5,497 ​ ​ — ​ (484) ​ ​ 5,497 ​ ​ — ​ Adjusted gross profit ​ $ 90,196 ​ ​ $ 93,677 ​ ​ $ 56,883 ​ $ 172,530 ​ ​ $ 163,617 ​ ​ $ 123,664 ​ $ 262,726 ​ ​ $ 257,294 ​ ​ $ 180,547 ​ Adjusted gross margin ​ ​ 45.3 % ​ ​ 46.9 % ​ ​ 43.8 % ​ 48.4 % ​ ​ 52.1 % ​ ​ 47.8 % ​ 47.3 % ​ ​ 50.1 % ​ ​ 46.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We reported gross margins of 46.0% for fiscal year 2022 compared to 47.5% for fiscal year 2021, a decrease of 1.5 points.
Gross Margin Our gross margin performance for the twelve months ended September 30, 2023, 2022 and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Life Science Products ​ Life Science Services ​ Azenta Total ​ ​ ​ Year Ended September 30, ​ Year Ended September 30, ​ Year Ended September 30, ​ Dollars in thousands ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ ​ 2022 ​ ​ 2021 ​ 2023 ​ ​ 2022 ​ ​ 2021 ​ Revenue ​ $ 305,184 ​ ​ $ 199,230 ​ ​ $ 199,606 ​ $ 359,888 ​ ​ $ 356,268 ​ ​ $ 314,097 ​ $ 665,072 ​ ​ $ 555,498 ​ ​ $ 513,703 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit ​ 101,192 ​ ​ ​ 89,074 ​ ​ ​ 92,560 ​ ​ 161,948 ​ ​ ​ 166,523 ​ ​ ​ 151,246 ​ ​ 263,140 ​ ​ ​ 255,597 ​ ​ ​ 243,806 ​ Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of completed technology ​ 13,194 ​ ​ 1,122 ​ ​ 1,117 ​ 5,300 ​ ​ 6,202 ​ ​ 6,957 ​ 18,494 ​ ​ 7,324 ​ ​ 8,074 ​ Purchase accounting impact on inventory ​ 9,664 ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ 9,664 ​ ​ — ​ ​ — ​ Tariff adjustment ​ — ​ ​ — ​ ​ — ​ — ​ ​ (484) ​ ​ 5,497 ​ — ​ ​ (484) ​ ​ 5,497 ​ Other unallocated corporate expenses ​ ​ — ​ ​ — ​ ​ — ​ (1) ​ ​ 289 ​ ​ (83) ​ (1) ​ ​ 289 ​ ​ (83) ​ Adjusted gross profit ​ $ 124,050 ​ ​ $ 90,196 ​ ​ $ 93,677 ​ $ 167,247 ​ ​ $ 172,530 ​ ​ $ 163,617 ​ $ 291,297 ​ ​ $ 262,726 ​ ​ $ 257,294 ​ Gross margin ​ ​ 33.2 % ​ ​ 44.7 % ​ ​ 46.4 % ​ 45.0 % ​ ​ 46.7 % ​ ​ 48.2 % ​ 39.6 % ​ ​ 46.0 % ​ ​ 47.5 % Adjusted gross margin ​ ​ 40.6 % ​ ​ 45.3 % ​ ​ 46.9 % ​ 46.5 % ​ ​ 48.4 % ​ ​ 52.1 % ​ 43.8 % ​ ​ 47.3 % ​ ​ 50.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We reported a gross margin of 39.6% for fiscal year 2023 compared to 46.0% in the prior fiscal year, a decrease of 6.4 percentage points.
We are headquartered in Chelmsford, Massachusetts and have operations in North America, Asia, and Europe. Our portfolio includes products and services offerings developed by us internally as well as many offerings we have added through multiple acquisitions designed to bring together a comprehensive capability to service our customers’ needs in the sample-based services arena.
We are headquartered in Burlington, Massachusetts and have operations in North America, Asia, and Europe. Our portfolio includes product and service offerings developed by us internally, as well as through acquisitions, designed to bring together comprehensive capabilities to service our customers’ needs in sample exploration and management, automated storage, and genomic solutions.
Acquisition completed after fiscal year end On October 3, 2022, we acquired B Medical Systems S.á r.l and its subsidiaries, or B Medical, a market leader in temperature-controlled storage and transportation solutions that enables the delivery of life-saving treatments to more than 150 countries worldwide.
On October 3, 2022, we acquired B Medical Systems S.á r.l and its subsidiaries (“B Medical”), a market leader in temperature-controlled storage and transportation solutions that enable the delivery of life-saving treatments to more than 150 countries worldwide. This acquisition complements our cold-chain capabilities, adding differentiated solutions for reliable and traceable transport of temperature-sensitive samples.
Our sample management solutions include consumable vials and tubes, PCR plates, instruments for supporting workflows, and informatics. This portfolio provides customers with the highest level of sample quality, security, availability, intelligence and integrity throughout the lifecycle of samples providing customers with complete end-to-end “cold-chain of custody” capabilities.
This portfolio provides customers with a high level of sample quality, security, availability, intelligence and integrity throughout the lifecycle of samples providing customers with complete end-to-end “cold-chain of custody” capabilities.
The increase in interest income in fiscal year 2022 from the prior fiscal year is due to interest earned on the proceeds from the sale of the semiconductor automation business, including interest accrued on a net investment hedge. Interest expense – During fiscal years 2022 and 2021, we recorded interest expense of $4.6 million and $2.0 million, respectively.
The increase in interest income in fiscal year 2023 from the prior fiscal year is due to higher interest rates on the investment of the proceeds from the sale of the semiconductor automation business, including interest accrued on a net investment hedge during fiscal year ended 2023.
We are not obligated to acquire any particular amount of common stock under the 2022 Repurchase Program, and share repurchases may be commenced or suspended at any time at our discretion. As part of the 2022 Repurchase Program, we expect to enter into an ASR agreement for the repurchase of up to $500 million of our common stock.
We are not obligated to acquire any specific amount of common stock under the 2022 Repurchase Authorization, and share repurchases may be commenced or suspended at any time at management’s discretion.
Other expenses, net – During fiscal years 2022 and 2021 we recorded other expenses, net of $0.3 million and $16.5 million, respectively. Other expense, net for fiscal year 2022 is primarily due to foreign exchange loss.
There is no interest expense in 2023 as the interest rate was positive. Other expenses, net – During fiscal years 2023 and 2022, we recorded other expenses, net of $1.0 million and $0.3 million, respectively, primarily due to foreign exchange loss.
Our Life Sciences Services business is a leading provider of solutions addressing the many needs of customers in the area of genomic analysis and the management and care of biological samples used in pharmaceutical, biotech, healthcare, clinical, and academic research and development markets.
Additionally, on February 2, 2023, we acquired Ziath Ltd. and its subsidiaries (“Ziath”), a leading provider of 2D barcode readers for life sciences applications to complement our product offerings. 27 Table of Contents Our Life Sciences Services business is a leading provider of solutions addressing the many needs of customers in the area of genomic analysis and the management and care of biological samples used in pharmaceutical, biotech, healthcare, clinical, and academic research and development markets.
We also provide expert-level consultation services to our clients throughout their experimental design and implementation. Our services also include short- and long-term sample storage and management of the “cold chain of custody” from collection, to storage, to retrieving the sample which ultimately may go back into the research workflow.
Our services also include short- and long-term sample storage and management of the “cold-chain of custody” from collection, to storage, to retrieving the sample which ultimately may go back into the research workflow. Sale of the Semiconductor Automation Business On February 1, 2022, we completed the sale of our semiconductor automation business to Thomas H.
Research and Development Expenses Our research and development expense for the twelve months ended September 30, 2022, 2021, and 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, ​ Dollars in thousands ​ ​ 2022 ​ ​ 2021 ​ ​ 2020 ​ Life Sciences Products ​ ​ $ 14,633 ​ ​ $ 10,866 ​ ​ $ 8,740 ​ Percent Revenue ​ ​ ​ 2.6 % ​ ​ 2.1 % ​ ​ 2.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Life Sciences Services ​ ​ $ 12,909 ​ ​ $ 11,523 ​ ​ $ 9,067 ​ Percent Revenue ​ ​ ​ 2.3 % ​ ​ 2.2 % ​ ​ 2.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ $ — ​ ​ $ 23 ​ ​ $ 11 ​ Percent Revenue ​ ​ ​ — % ​ ​ 0.0 % ​ ​ 0.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total research and development expense ​ ​ $ 27,542 ​ ​ $ 22,412 ​ ​ $ 17,818 ​ Percent Revenue ​ ​ ​ 5.0 % ​ ​ 4.4 % ​ ​ 4.6 % ​ 34 Table of Contents Research and development expenses in fiscal year 2022 increased $5.1 million as compared fiscal year 2021, driven by a $3.8 million increase in our Life Sciences Products segments and a $1.4 million increase in our Life Sciences Services segment.
Please refer to Note 19, Segment and Geographic Information in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10K. 35 Table of Contents Research and Development Expenses Our research and development expense for the twelve months ended September 30, 2023, 2022, and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, ​ Dollars in thousands ​ 2023 ​ ​ 2022 ​ ​ 2021 ​ Life Sciences Products ​ $ 20,934 ​ ​ $ 14,633 ​ ​ $ 10,866 ​ Life Sciences Services ​ $ 13,022 ​ ​ $ 12,909 ​ ​ $ 11,523 ​ Corporate ​ $ — ​ ​ $ — ​ ​ $ 23 ​ Total research and development expense ​ $ 33,956 ​ ​ $ 27,542 ​ ​ $ 22,412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Life Sciences Products Percent-Segment Revenue ​ ​ 6.9 % ​ ​ 7.3 % ​ ​ 5.4 % Life Sciences Services Percent-Segment Revenue ​ ​ 3.6 % ​ ​ 3.6 % ​ ​ 3.7 % Corporate Percent Revenue ​ ​ — % ​ ​ — % ​ ​ 0.0 % Total Percent-Total Revenue ​ ​ 5.1 % ​ ​ 5.0 % ​ ​ 4.4 % ​ Research and development expenses increased $6.4 million in fiscal year 2023 as compared fiscal year 2022, primarily driven by a $6.3 million increase in our Life Sciences Products segments due to the addition of B Medical as well as an increase in product development expenses.
We review profit estimates for long-term contracts during each reporting period and revise the estimate based on changes in circumstances. 28 Table of Contents If our judgment regarding revenue recognition proves incorrect, our revenue in particular periods may be adversely affected and could have a material impact on our financial condition and results of operations.
If our judgment regarding revenue recognition proves incorrect, our revenue in particular periods may be adversely affected and could have a material impact on our financial condition and results of operations.
We estimate that revenue related to the COVID-19 pandemic for the fiscal year ended September 30, 2022 was approximately $22 million in the aggregate primarily attributable to the increased demand for our consumables and instruments products as compared to COVID-related revenue of $53 million for the year ended September 30, 2021. ​ We anticipate continued growth in revenue from our life sciences products and services businesses through our internally developed products and services and through our acquired businesses and potential future acquisitions.
The decrease in this revenue was primarily due to lower demand for Consumables and Instruments related to COVID-19 testing. ​ We anticipate continued growth in revenue from our Life Sciences Products and Services businesses through our internally developed products and services and through our acquired businesses and potential future acquisitions.
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.
The decrease of $357.3 million was attributable to $844.1 million of cash outflows from financing activities, partially offset by $431.4 million of cash inflows from investing activities, and $17.5 million of cash inflows from operating activities. 38 Table of Contents 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.
This acquisition complements our cold chain capabilities, adding differentiated solutions for reliable and traceable transport of temperature-sensitive specimens. ​ 26 Table of Contents Business and Financial Performance Our performance for the twelve months ended September 30, 2022, 2021 and 2020 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, ​ Dollars in thousands ​ ​ 2022 ​ 2021 ​ 2020 ​ Revenue ​ ​ $ 555,498 ​ $ 513,703 ​ $ 388,537 ​ Cost of revenue ​ ​ 299,914 ​ 269,894 ​ 216,389 ​ Gross profit ​ ​ 255,584 ​ 243,809 ​ 172,148 ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ ​ 27,542 ​ 22,412 ​ 17,818 ​ Selling, general and administrative ​ ​ 252,065 ​ 252,101 ​ 190,256 ​ Restructuring charges ​ ​ 712 ​ 385 ​ 674 ​ Total operating expenses ​ ​ 280,319 ​ 274,898 ​ 208,748 ​ Operating loss ​ ​ (24,735) ​ (31,089) ​ (36,600) ​ Interest income ​ ​ 20,286 ​ 632 ​ 849 ​ Interest expense ​ ​ (4,589) ​ (2,037) ​ (2,944) ​ Loss on extinguishment of debt ​ ​ ​ (632) ​ ​ — ​ ​ — ​ Other expense, net ​ ​ (266) ​ (16,475) ​ (1,597) ​ Loss before income taxes ​ ​ (9,936) ​ (48,969) ​ (40,292) ​ Income tax provision (benefit) ​ ​ 1,350 ​ (20,100) ​ (13,930) ​ Loss from continuing operations ​ ​ $ (11,286) ​ $ (28,869) ​ $ (26,362) ​ Income from discontinued operations, net of tax ​ ​ 2,144,145 ​ 139,616 ​ 91,215 ​ Net income ​ ​ $ 2,132,859 ​ $ 110,747 ​ $ 64,853 ​ ​ Results of Operations Fiscal Year Ended September 30, 2022 Compared to Fiscal Year Ended September 30, 2021 Revenue increased 8% for the fiscal year 2022 as compared to the prior fiscal year driven by revenue growth in our Life Sciences Services segment of 13%.
The semiconductor automation business is classified as a discontinued operation and, unless otherwise noted, this MD&A relates solely to our continuing operations and does not include the operations of our semiconductor automation business. ​ Business and Financial Performance Our performance for the twelve months ended September 30, 2023, 2022 and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, Dollars in thousands ​ 2023 ​ 2022 ​ 2021 Revenue ​ $ 665,072 ​ $ 555,498 ​ $ 513,703 Cost of revenue ​ 401,932 ​ 299,914 ​ 269,894 Gross profit ​ 263,140 ​ 255,584 ​ 243,809 Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 33,956 ​ 27,542 ​ 22,412 Selling, general and administrative ​ 316,282 ​ 251,465 ​ 252,101 Contingent consideration - fair value adjustments ​ ​ (18,549) ​ ​ 600 ​ ​ — Restructuring charges ​ 4,577 ​ 712 ​ 385 Total operating expenses ​ 336,266 ​ 280,319 ​ 274,898 Operating loss ​ (73,126) ​ (24,735) ​ (31,089) Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 43,735 ​ 20,286 ​ 632 Interest expense ​ — ​ (4,589) ​ (2,037) Loss on extinguishment of debt ​ ​ — ​ ​ (632) ​ ​ — Other, net ​ (1,042) ​ (266) ​ (16,475) Loss before income taxes ​ (30,433) ​ (9,936) ​ (48,969) Income tax (benefit) expense ​ (17,550) ​ 1,350 ​ (20,100) Loss from continuing operations ​ $ (12,883) ​ $ (11,286) ​ $ (28,869) Income (loss) from discontinued operations, net of tax ​ (1,374) ​ 2,144,145 ​ 139,616 Net income (loss) ​ $ (14,257) ​ $ 2,132,859 ​ $ 110,747 28 Table of Contents Results of Operations Fiscal Year Ended September 30, 2023 Compared to Fiscal Year Ended September 30, 2022 Revenue increased 20% in fiscal year 2023 compared to the prior fiscal year, driven by revenue growth in our Life Sciences Products segment of 53% primarily due to acquisitions (largely B Medical), partially offset by the decline in COVID-related revenues in our Consumables and Instruments business.
Within our Life Sciences Services segment, our genomics services business advances research and development activities by gene sequencing, synthesis, editing and related services. We offer a comprehensive, global portfolio that we believe has both broad appeal in the life sciences industry and enables customers to select the best solution for their research challenges.
We offer a comprehensive, global portfolio that we believe has both broad appeal in the life sciences industry and enables customers to select the best solution for their research and development challenges. This portfolio also offers unique solutions for key markets such as cell and gene therapy (“CGT”), antibody development and biomarker discovery by addressing genomic complexity and throughput challenges.
We have two operating and two reportable segments consisting of Life Sciences Products and Life Sciences Services.
Segments Our business is comprised of two reportable segments, our Life Sciences Products segment and our Life Sciences Services segment.
Operating income for our Life Sciences Services segment was $10.8 million for fiscal year 2022, a slight increase as compared to an operating income of $10.3 million for fiscal year 2021. Cost of sales for our Life Sciences Services segment includes charges for amortization related to completed technology of $6.3 million for fiscal year 2022 and $7.0 million for 2021.
Adjusted operating income for our Life Sciences Services segment excludes charges for amortization related to completed technology of $5.3 million and $6.2 million for fiscal years 2023 and 2022, respectively, and a $0.5 million benefit from a tariff adjustment for fiscal year 2022.
Income Tax Provision (Benefit) We recorded an income tax provision on continuing operations of $1.4 million in fiscal year 2022 compared to an income tax benefit of $20.1 million in fiscal year 2021. The changes were the result of fluctuations in global income from operations and one-time tax benefits recorded in the fiscal year 2021.
Income Tax (Benefit) Expense We recorded an income tax benefit on continuing operations of $17.6 million in fiscal year 2023 compared to an income tax expense of $1.4 million in fiscal year 2022. The increased tax benefit for the year was driven by the increased global pre-tax loss from operations recorded in fiscal year 2023.
Since the completion of the sale of the semiconductor automation business on February 1, 2022, we have not paid a quarterly dividend and do not have plans to pay any dividends at this time. 39 Table of Contents Share Repurchase Program On September 29, 2015, our Board of Directors approved a share repurchase program for up to $50 million of our common stock, or the 2015 Repurchase Program.
Since the completion of the sale of the semiconductor automation business on February 1, 2022, we have not paid a quarterly dividend and do not have plans to pay any dividends at this time. During fiscal year 2022, prior to the sale, we paid a $0.10 per share quarterly dividend totaling $7.5 million in December 2021.
Our Life Sciences Products business is a leading provider of automated cold storage solutions for biological and chemical compound samples. Our storage systems provide reliable automation and sample inventory management at temperatures down to -190°C and can store anywhere from one to millions of samples.
Our Life Sciences Products business is a leading provider of automated cold storage solutions for biological and chemical compound samples. We have a complete line of automated storage systems from ambient temperatures to -190°C. Our sample management solutions include consumable vials and tubes, polymerase chain reaction (“PCR”) plates, instruments for supporting workflows, and informatics.
The loss is allocated to the assets within the group based on their relative carrying values, with no asset reduced below its fair value.
The loss is allocated to the assets within the group based on their relative carrying values, with no asset reduced below its fair value. We were not required to test our long-lived assets for impairment during fiscal years 2023 or 2022 since no events indicating impairment occurred during the periods then ended.
Selling, General and Administrative Expenses Our selling, general and administrative expenses for the twelve months ended September 30, 2022, 2021, and 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, ​ Dollars in thousands ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ Life Sciences Products ​ ​ ​ $ 63,408 ​ ​ $ 59,723 ​ ​ $ 51,184 ​ Percent Revenue ​ ​ ​ ​ 11.4 % ​ ​ 11.6 % ​ ​ 13.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Life Sciences Services ​ ​ ​ $ 142,830 ​ ​ $ 129,398 ​ ​ $ 111,737 ​ Percent Revenue ​ ​ ​ $ 25.7 % ​ $ 25.2 % ​ $ 28.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ $ 45,827 ​ ​ $ 62,980 ​ ​ $ 27,335 ​ Percent Revenue ​ ​ ​ ​ 8.2 % ​ ​ 12.3 % ​ ​ 7.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total selling, general and administrative expense ​ ​ ​ $ 252,065 ​ ​ $ 252,101 ​ ​ $ 190,256 ​ Percent Revenue ​ ​ ​ ​ 45.4 % ​ ​ 49.1 % ​ ​ 49.0 % ​ Total selling, general and administrative expenses were flat in fiscal year 2022 as compared to fiscal year 2021, driven by an increase of $17.1 million from segment selling, general and administrative expenses and a decrease of $17.2 million from corporate expenses not allocated to our segments.
Selling, General and Administrative Expenses Our selling, general and administrative expense for the twelve months ended September 30, 2023, 2022, and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, ​ Dollars in thousands ​ 2023 ​ 2022 ​ 2021 ​ Life Sciences Products ​ $ 110,579 ​ ​ $ 63,408 ​ ​ $ 59,723 ​ Life Sciences Services ​ $ 163,648 ​ ​ $ 142,830 ​ ​ $ 129,398 ​ Corporate ​ $ 42,055 ​ ​ $ 45,227 ​ ​ $ 62,980 ​ Total selling, general and administrative expense ​ $ 316,282 ​ ​ $ 251,465 ​ ​ $ 252,101 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Life Sciences Products Percent-Segment Revenue ​ ​ 36.2 % ​ ​ 31.8 % ​ ​ 29.9 % Life Sciences Services Percent-Segment Revenue ​ ​ 45.5 % ​ ​ 40.1 % ​ ​ 41.2 % Corporate Percent-Total Revenue ​ ​ 6.3 % ​ ​ 8.1 % ​ ​ 12.3 % Percent-Total Revenue ​ ​ 47.6 % ​ ​ 45.3 % ​ ​ 49.1 % ​ Selling, general and administrative expenses increased $64.8 million in fiscal year 2023 as compared to fiscal year 2022, driven by higher costs in both our segments (largely in Life Sciences Products due to $41.5 million associated with B Medical), partially offset by savings from cost reduction actions.
Overview of Cash Flows and Liquidity Our cash and cash equivalents, restricted cash and marketable securities as of September 30, 2022 and 2021 consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, ​ 2022 2021 Cash and cash equivalents ​ $ 658,274 ​ $ 227,427 Restricted cash ​ ​ 383,023 ​ ​ 12,906 Short-term marketable securities ​ 911,764 ​ 81 Long-term marketable securities ​ 352,020 ​ 3,598 ​ ​ $ 2,305,081 ​ $ 244,012 ​ ​ ​ ​ ​ ​ ​ Cash, cash equivalents and restricted cash ​ ​ 1,041,297 ​ ​ 240,333 Cash and cash equivalents included in assets held for sale ​ — ​ 45,000 ​ ​ $ 1,041,297 ​ $ 285,333 ​ Our cash and cash equivalents, restricted cash and marketable securities were $2.3 billion as of September 30, 2022.
Our cash and cash equivalents, restricted cash and marketable securities as of September 30, 2023 and 2022 consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 ​ September 30, 2022 Cash and cash equivalents ​ $ 678,910 ​ $ 658,274 Restricted cash ​ ​ 5,135 ​ ​ 383,023 Short-term marketable securities ​ 338,873 ​ 911,764 Long-term marketable securities ​ 111,338 ​ 352,020 ​ ​ $ 1,134,256 ​ $ 2,305,081 ​ ​ ​ ​ ​ ​ ​ Our cash and cash equivalents, restricted cash and marketable securities were $1.1 billion as of September 30, 2023.
Fair value and useful life determinations may be based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in computing present values.
Fair value and useful life determinations may be based on, among other factors, estimates of revenue growth rates, operating expenses, integration costs, obsolescence factor and discount rate among others attributable to completed technology and other acquired intangible assets used in computing present values.
A comparison of our results for the fiscal year ended September 20, 2021 to the fiscal year ended September 20, 2020 is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for fiscal year ended September 30, 2021, filed with the SEC on November 24, 2021. 31 Table of Contents Revenue Our revenue performance for the twelve months ended September 30, 2022, 2021, and 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, Dollars in thousands ​ ​ 2022 ​ ​ 2021 ​ ​ 2020 ​ % Change ​ % Change Life Sciences Products ​ ​ 199,230 ​ ​ 199,606 ​ ​ 129,759 ​ (0) % ​ 54 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Life Sciences Services ​ 356,268 ​ 314,097 ​ 258,778 ​ 13 % ​ 38 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue ​ 555,498 ​ 513,703 ​ 388,537 ​ 8 % ​ 43 % ​ Fiscal Year Ended September 30, 2022 Compared to Fiscal Year Ended September 30, 2021 Revenue for fiscal year 2022 increased 8% as compared to the prior fiscal year.
Revenue Our revenue performance for the twelve months ended September 30, 2023, 2022, and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % Change Dollars in thousands ​ 2023 ​ 2022 ​ 2021 ​ 2023 v. 2022 ​ 2023 v. 2021 Life Sciences Products ​ $ 305,184 ​ $ 199,230 ​ $ 199,606 ​ 53.2 % ​ 52.9 % Life Sciences Services ​ ​ 359,888 ​ ​ 356,268 ​ ​ 314,097 ​ 1.0 % ​ 14.6 % Total revenue ​ $ 665,072 ​ $ 555,498 ​ $ 513,703 ​ 19.7 % ​ 29.5 % 32 Table of Contents Fiscal Year Ended September 30, 2023 Compared to Fiscal Year Ended September 30, 2022 Revenue increased 20% in fiscal year 2023 compared to the prior fiscal year, driven by a 53% increase in our Life Sciences Products segment and a 1% increase in our Life Sciences Services segment.
Cash used in investing activities was $146.3 million during fiscal year 2021 and consisted of $95.5 million for capital expenditures and $52.8 million for acquisitions, partially offset by $2.0 million of net proceeds from the net purchases, sales, and maturities of marketable securities.
Cash provided by investing activities was $431.4 million during fiscal year 2023 and consisted of $1.1 billion of sales and maturities of marketable securities, partially offset by $236.2 million for purchases of marketable securities and $386.5 million paid for the acquisition of B Medical and Ziath.
Selling, general and administrative expenses at the segment level, which are discussed below, include corporate allocations from shared corporate functions which include finance, information technology, human resources, legal, executive, governance, logistics and compliance, and variable compensation. During fiscal year 2022 corporate allocated expenses decreased $17.2 million compared to fiscal year 2021, primarily due to lower variable compensation accruals.
Within our segment expense, discussed below, we allocate certain corporate general and administrative expenses including costs related to shared corporate functions which include finance, information technology, human resources, legal, executive, governance, and compliance. In total, corporate general and administrative expense allocated to segments increased $12.2 million year-over-year, primarily due to higher labor costs and investment in the business.
Indirect expenses which supported the semiconductor automation business and semiconductor cryogenics business, and which remained as part of the continuing operations, are not reflected in income from discontinued operations. LIQUIDITY AND CAPITAL RESOURCES We believe that we have adequate resources to satisfy our working capital, financing activities, debt service and capital expenditure requirements for the next twelve months.
Indirect expenses which supported the semiconductor automation business and semiconductor cryogenics business, and which remained as part of the continuing operations, are not reflected in income from discontinued operations. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 2023, we had cash and cash equivalents of $678.9 million, marketable securities of $450.2 million, and stockholders’ equity of $2.5 billion.
The decrease in operating loss was primarily due to the impairment of a trademark in 2021 of $13.4 million. Operating income for our Life Sciences Products segment was $11.0 million for fiscal year 2022 compared to an operating income of $22.0 million for fiscal year 2021.
Operating loss for our Life Sciences Products segment was $30.3 million for fiscal year 2023 compared to operating income of $11.0 million in the prior fiscal year. The Life Science Products segment adjusted operating income decreased $18.1 million and adjusted operating margin decreased 8.0 percentage points compared to the prior year.
On February 1, 2022, the Company completed the sale of the semiconductor automation business for $2.9 billion in cash. Revenue from discontinued operations was $264.4 million and $680.1 million, respectively, for fiscal years 2022 and 2021 related to the semiconductor automation business.
These additional tax benefits drove the effective tax rate on our loss higher than ordinary statutory tax rates. ​ Discontinued Operations Discontinued operations in fiscal year 2022 consisted of the semiconductor automation business. On February 1, 2022, the Company completed the sale of the semiconductor automation business for $2.9 billion in cash.
Cost of sales for our Life Sciences Products segment includes charges for amortization related to completed technology of $1.1 million for both fiscal years 2022 and 2021.
Adjusted operating income for our Life Sciences Products segment excludes charges for amortization related to completed technology of $13.2 million and $1.1 million for fiscal years 2023 and 2022, respectively, a $9.7 million charge related to the purchase accounting impact on inventory, and a $1.6 million charge related to amortization of other intangibles for fiscal year 2023.
You should read “Information Related to Forward-Looking Statements” and Item 1A, “Risk Factors" included above in this Form 10-K for a discussion of important factors that could cause our actual results to differ materially from our expectations.
Factors that could cause or contribute to these differences include, without limitation, those discussed in “Information Related to Forward-Looking Statements” and Part I, Item 1A, “Risk Factors” included above in this Annual Report on Form 10-K.
Selling, general and administrative expenses in our Life Sciences Services segment increased $13.4 million in fiscal year 2022 as compared to fiscal year 2021 primarily due to selling costs as described above, and support personnel in our laboratories . 35 Table of Contents Non-Operating Income (Expenses) Interest income – During fiscal years 2022 and 2021, we recorded interest income of $20.3 million and $0.6 million respectively, which primarily represented interest earned on our marketable securities.
Non-Operating Income (Expenses) Interest income – During fiscal years 2023 and 2022, we recorded interest income of $43.7 million and $20.3 million, respectively, which primarily represented interest earned on our cash and cash equivalents, marketable securities, and net investment hedge.
Adjustments to fair values of assets and liabilities made after the end of the measurement period are recorded within our operating results. Intangible Assets, Goodwill and Other Long-Lived Assets We have identified intangible assets and generated significant goodwill as a result of our acquisitions.
Intangible Assets, Goodwill and Other Long-Lived Assets We have identified intangible assets and generated significant goodwill as a result of our acquisitions. Intangible assets other than goodwill are valued based on estimated future cash flows and amortized over their estimated useful lives.
Selling, general and administrative expenses in our Life Sciences Products segment increased $3.7 million in fiscal year 2022 as compared to fiscal year 2021, due to higher selling costs as we made investments in our commercial resources and capabilities .
Selling, general and administrative expenses in our Life Sciences Products segment increased $47.2 million year-over-year, primarily due to the addition of B Medical .
You should read the MD&A in conjunction with our Consolidated Financial Statements and related notes in this Form 10-K. In addition to historical information, the MD&A contains forward-looking statements that involve risks and uncertainties.
In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below and in the forward-looking statements.
Adjusted operating income for our Life Sciences Services segment, which excludes the charges mentioned above, was $16.8 million for fiscal year 2022 and adjusted operating income in fiscal year 2021 was $22.7 million after excluding these charges.
Operating loss for our Life Sciences Services segment was $14.7 million for fiscal year 2023 as compared to operating income of $10.8 million in the prior fiscal year. The Life Sciences Services segment adjusted operating income decreased $26.2 million and adjusted operating margin decreased 7.3 percentage points compared to the prior year.
Our intent is to reinvest our foreign cash outside of the United States and our current operating plans do not demonstrate a need to repatriate these funds for our U.S. operations. We had marketable securities of $1.3 billion and $3.7 million as of September 30, 2022 and 2021, respectively.
As of September 30, 2023, we had cash, cash equivalents and restricted cash of $684.0 million, of which approximately $569 million was held outside of the United States. If these funds are needed for U.S. operations, we would need to repatriate these funds.
Research and development expenses in our Life Sciences Services segment increased $1.4 million in fiscal year 2022 compared to fiscal year 2021. The increase in research and development expenses was primarily driven by higher investments in our genomics services business.
Our Life Sciences Services segment revenue increased 1% year-over-year, primarily due to growth in our SRS business, partially offset by a decline in the Genomics Services business.
Net income from discontinued operations was $2.1 billion and $139.6 million for fiscal years 2022 and 2021, respectively, and is comprised of the gain on the sale of the semiconductor business in fiscal year 2022, and results of operations of the semiconductor automation business in fiscal year 2021.
There was no revenue from discontinued operations for fiscal year 2023. Revenue from discontinued operations was $264.4 million for fiscal year 2022. Net loss from discontinued operations was $1.4 million for fiscal year ended 2023 and net income was $2.1 billion for fiscal year 2022.
Overall, we generated a net loss from continuing operations of $11.3 million during fiscal year 2022 compared to a net loss from continuing operations of $28.9 million in fiscal year 2021. Please refer to the “Results of Operations” section below for a detailed discussion of our financial results for the fiscal year 2022 compared to fiscal year 2021.
Loss from continuing operations was $12.9 million during fiscal year 2023 as compared to a loss from continuing operations of $11.3 million in fiscal year 2022. Loss from discontinued operations was $1.4 million during fiscal year 2023 as compared to income from discontinued operations of $2.1 billion in fiscal year 2022.
Please refer to Note 18, “Segment and Geographic Information”. Our Life Sciences Services segment reported gross margins of 46.7% for fiscal year 2022 compared to 48.2% for fiscal year 2021. The reduction of 1.4 points was driven by higher costs due to a buildout of our facilities infrastructure and the effects of currency and inflation during fiscal year 2022.
Our Life Sciences Services segment reported gross margin of 45.0% for fiscal year 2023 compared to 46.7% in the prior fiscal year primarily driven by a decline in the Genomic Services business due to the impact of lower sales, higher labor costs and continued investment in the business.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt September 30, 2022, the unrealized loss position on marketable securities was $14.7 million, which is included in “Accumulated other comprehensive income” in the Consolidated Balance Sheets. At September 30, 2021, the unrealized loss position on marketable securities was insignificant.
Biggest changeAt September 30, 2023 and 2022 the unrealized loss position on marketable securities was $6.9 million, and $14.7 million, respectively, which is included in “Accumulated other comprehensive income (loss)” in the Consolidated Balance Sheets. A hypothetical 100 basis point change in interest rates would result in a $11.7 million annual change in interest income earned in fiscal year 2023.
We also utilize forward contracts to mitigate our exposures to currency movement. We incurred foreign currency losses of $1.7 million and $1.8 million, respectively, in fiscal years 2022 and 2021, which related to the currency fluctuation on these balances between the time the transaction occurred and the ultimate settlement of the transaction. ​ 41 Table of Contents
We also utilize forward contracts to mitigate our exposures to currency movement. We incurred foreign currency losses of $4.2 million and $1.7 million, respectively, in fiscal years 2023 and 2022, which related to the currency fluctuation on these balances between the time the transaction occurred and the ultimate settlement of the transaction.
Interest Rate Exposure Our cash and cash equivalents and restricted cash consist principally of money market securities which are short-term in nature. At September 30, 2022 and 2021, our aggregate short-term and long-term investments were $1.3 billion and $3.7 million, respectively, and consisted mostly of highly rated corporate debt securities and municipal securities.
Interest Rate Exposure Our cash and cash equivalents and restricted cash consist principally of money market securities which are short-term in nature. At September 30, 2023 and 2022, our aggregate short-term and long-term investments were $450.2 million and $1.3 billion, respectively, and consisted mostly of highly rated corporate debt securities, and U.S. government backed securities.
Currency Rate Exposure We have transactions and balances denominated in currencies other than the functional currency of the transacting entity. Most of these transactions carrying foreign exchange risk are in Germany, the United Kingdom, and China.
As of September 30, 2023 and September 30, 2022, we had no outstanding debt on our balance sheet. Currency Rate Exposure We have transactions and balances denominated in currencies other than the functional currency of the transacting entity. Most of these transactions carrying foreign exchange risk are in Germany, the United Kingdom, Luxembourg, and China.
Such balances were approximately $80.4 million and $119.4 million, respectively, at September 30, 2022 and 2021, and relate to the foreign exchange risk in Germany, the United Kingdom, and China. 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.
Such balances were approximately $157.8 million and $80.4 million, respectively, at September 30, 2023 and 2022, and primarily relate to the Euro, British Pound, and the Chinese yuan. 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.
These sales were made primarily by our foreign subsidiaries, which have cost structures that substantially align with the currency of sale. 40 Table of Contents 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.
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.
Sales in currencies other than the U.S. dollar were 36% and 37%, respectively, of our total sales for fiscal years ended September 30, 2022 and 2021.
Sales in currencies other than the U.S. dollar were 24% and 36%, respectively, of our total sales for fiscal years ended September 30, 2023 and 2022. These sales were made primarily by our foreign subsidiaries, which have cost structures that substantially align with the currency of sale.
Removed
A hypothetical 100 basis point change in interest rates would result in an $11.4 million annual change in interest income earned in fiscal year 2022.
Added
A hypothetical 10% change in foreign exchange rates would result in an approximate change of $9.0 million in our net income during the fiscal year ending September 30, 2023. ​ 41 Table of Contents
Removed
On February 1, 2022, in connection with the completion of the sale of its semiconductor automation business, we used $49.7 million of the cash proceeds from the sale to extinguish the total remaining outstanding balance of our former term loan. We also closed our revolving credit facility of which had no borrowings.
Removed
During fiscal year 2022, we incurred cash interest expense of $0.5 million on the term loan. The term loan had a variable interest rate which subjected us to interest rate risk. Our primary interest rate risk exposure resulted from changes in the short-term LIBOR rate, the federal funds effective rate and the prime rate.

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