Ladies and gentlemen, thank you for standing by and welcome to the Brooks Automation Q2 Financial Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we’ll conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded Thursday, May 9, 2013. I would now like to turn the conference over to Mr. Martin Headley, Executive Vice President and Chief Financial Officer. Please proceed.

Thank you very much, James and good afternoon, everybody. I’d like to welcome each of you to the second quarter financial results conference call for Brooks’ financial year 2013. In addition to covering the results of the quarter that ended on March 31, we’ll be providing an outlook into the third quarter of our fiscal 2013 which will end on June 30. Our press release was issued after the close of markets today and is available at the Investor Relations page of our website, www.brooks.com as are the illustrative PowerPoint slides we use during our prepared comments during today’s call. I’d like to remind everybody that during the course of the call, we’ll be making a number of forward-looking statements within the meaning of the Private Litigation Securities Act of 1995. There are many factors that may cause actual financial results or other events to differ from those identified in such forward-looking statements. I’d refer you to the section of our earnings release titled Safe Harbor statement, the Safe Harbor slide in the aforementioned PowerPoint presentation on our website, on the company’s various filings with the SEC. We make no obligation to update these statements should future financial data or events occur that differ from forward-looking statements presented today. I’d also like to note we’ll also make reference to a number of non-GAAP financial measures, which are used in addition to and in conjunction with results provided in accordance with GAAP. Management believes these non-GAAP measures provide an additional way viewing aspects of our operation and performance when considered with the GAAP financial results and the reconciliation of debt measures provide a more complete understanding of the Brooks business. Non-GAAP measures should not be relied upon to the exclusion of GAAP measures. With me today is Brooks’ President and Chief…

Thank you, Martin. Good afternoon, everyone and thank you for joining our call. We’re pleased to have the opportunity to be able to report the results of the second quarter of our fiscal year. As many of our customers and peers have recently reported, December was definitely the low point in the semiconductor equipment cycle. In March, the level of order activity picked up significantly and although we still have higher expectations for the second half of the year, the 30% increase in bookings over the prior quarter was welcome news. Our March quarter revenue was slightly above the upper end of our expectations, as business was robust, and we were able to satisfy some incremental turns business. Our Life Sciences Systems’ revenue was slightly below forecast as we continue to wait for some delayed orders that are pending. All in, we are pleased by the strong growth in our semi and adjacent markets, as revenue grew more than 35% from the December quarter even assuming a full quarter of crossing automation revenue in the December quarter. We attribute this higher than industry accelerations to a combination of the growth in the overall market plus the market share gains we’ve been able to demonstrate as a result of our strong investment in design wins and new products. In the March quarter, we had 15 OEM design wins, of which six were for front end semi, two were for backend wafer processing applications that include the Spartan platform out of our Crossing Automation acquisition. And seven of the new design wins were for other adjacent and industrial applications. One of the wins was for a 450 mm application for our new customer who we are particularly pleased to we have been able to win after years of trying to get designed…

Thank you very much, Steve. Slide number 4, reflects the impact of the 19% sequential increase in revenues from $98 million in the December quarter to $116.6 million in the March quarter. Gross profits improved by $6.1 million to $37.4 million a gross margin rate up 32.1%. The variable contribution was limited by the decline in our highest margin rate segment these Life Science systems business. We spent $0.5 million more on research and development, most notably associated with the new products for automated sample management stores, that Steve noted in our Life Science Systems business. Selling, general and administrative expenses were reduced by $0.6 million. although there were a number of moving pieces here, which are best explained by waterfall chart slide number 5. We had a reduction in intangible, amortization of $0.6 million related to the Helix acquisition of 2005 with a number of the intangibles were completely amortized. We also saw $8.8 million impact to SG&A from the restructuring actions taken during the December quarter. Organic revenue growth in the Brooks Product Solutions segment of $19.2 million generated a 36% drop through to operating profits, $7.8 million increase in profits. This was slightly below our target grow through as a result of certain low-margin situations. We’ve addressed some of these and I’ll talk more about this when discussing our guidance. The revenue contraction in our Life Science Systems business had a particularly significant impact of nearly $1 million of the revenues in the December quarter where extremely high margin software revenues that did not repeat in the March quarter. Additionally, as I mentioned, we had higher research and development spending associated with a significant product rollout. The Brooks Global Services business generated 4.5% organic growth from the first quarter to the second quarter and a 50% drop…

Thank you. (Operator Instructions). And our first question is from the line of David Duley from Steelhead Securities. Please proceed. David Duley – Steelhead Securities: Yeah. Thanks for taking my question. I was just wondering you made some comments about having a strong second half of the calendar year, I believe. Could you talk a little bit about why you think that’s going to happen? And then also address I think the comments – the prepared comments about a pause in foundry shipments are spending.

Yeah. Hi, David. It’s Steve. Let me go backwards on your questions. On the first one, just even the last three or four weeks, we’ve seen some push-outs of system that we had expected in June out into the September quarter. So that’s some push outs related to business. Ultimately that was headed toward foundries and I think it’s consistent with what other companies have reported. In terms of the back half of the year, the forecast that the accountings are putting together, are certainly stronger compared to where we are today. We don’t know what level yet, but the indications we’re getting from an order standpoint give us a reasonable level of confidence that there’ll be some pickup at least beginning in the September quarter. David Duley – Steelhead Securities: And do you – see what kind of order – do you see orders growing in the June quarter in total for Brooks?

We’re certainly seeing a trend consistent with that. If it holds up through the balance of the quarter. David Duley – Steelhead Securities: Okay. And then just final question from me. I’ll turn it over to somebody else. Could you talk a little bit about the of Life Science cost structure? I realize you’ve tried to downsize it, but it seems like we’ve been waiting a long time for the revenue to grow here. So, how much longer are we going to wait before we address that and what kind of timeframe are we looking at and are you happy with the cost structure now, I guess.

Yeah. Hi, Dave. So, we – obviously we are not pleased with the revenue line or the profitability of the business. But as I mentioned in my comments, we are absolutely committed to the market, committed to the products that we’ve developed to address the biological side of the business. We think we have the right products in place and we are winning the business as available. So, we have very high market share, the things that we know about now we’re able to bring home. The spending from a percentage standpoint is very high and it’ll be resolved as we get the revenue up. We indicated that we’ve got some indications that bookings will improve in the current quarter once we’re able to book the systems, we’ll get them under contract and we feel that the growth is coming here towards the back half of the year, but even orders in the June quarter won’t be as meaningful for revenue in the June quarter certainly. It’ll start to shop in September and the more meaningfully in December, but we do feel the growth is returning to the business and we’ll probably within a couple of quarters of hopefully been able to return the business to profitability and we are definitely making the investments in the products to continue to grow the business. David Duley – Steelhead Securities: Okay. Thanks.

Our next question is from the line of Patrick Ho from Stifel Nicolaus. Please proceed. Patrick Ho – Stifel Nicolaus: Thank you very much. Steve, maybe first on the semiconductors side, some of the design wins that you mentioned in your prepared remarks. Can you tell how much of it was for advanced packaging type of applications or was that just too difficult to I guess characterize or break apart from where you getting these design wins.

No, we had, Patrick, we had two data for Advance Packaging. So, they were two important and meaningful ones and look at for Martin right now to see you at the backend advance packaging run rate.

The backend advance packaging run rate is now getting up over $25 million on an annualized rate. So, it continues to incrementally increase and we’ve got both a good business building here, which will appreciate came from kind of next to loss nothing, not too long ago. Patrick Ho – Stifel Nicolaus: Great, maybe just a quick follow-up on that. Given that, you are a component supplier to the OEMs and others in terms of this market place. How do you see the traction of that process technique gaining hold. Do you see this as a something that really gained steam in 2013 or it’s just still probably more 2014 and 2015 story.

We don’t know, we are getting designed in – we are not as close to it, but our indication is that it’s kind of a 2014, 2015 story. Patrick Ho – Stifel Nicolaus: Okay, great, and then just one question on the Life Sciences and I know we’ve talked about – you know that the cold storage business both from the Biopharma as well as the biological sample segments, that you’re targeting and you can correct me if I’m wrong. Biopharma was the more saturated and mature market and growth opportunities was in the biological sample side. Are you not seeing enough traction there to offset some of the I guess the government funding delays and some of the slowdown in spending on the pharma side or has biological sample growth story still further out from, I guess I initially may have put that traction was taking place.

Yeah, Patrick, I think we are seeing a little bit more lumpiness than we anticipated. So, the pharma and the bio stores have been slow here in the last two quarters, both are picking up in the June quarter. Patrick Ho – Stifel Nicolaus: Great. Thank you very much.

Our next question is from the line of Jairam Nathan from Sidoti. Please proceed. Jairam Nathan – Sidoti: Hi, thanks for taking my question. I just wanted to first get a clarification. there were two numbers of thrown out about the Life Sciences orders, one was 9 million and a 15 million number. Can you just kind of rehearse that of what was the 15 million?

Yeah. Sure, Jairam. This is Steve. So, we booked $9 million in the quarter for Life Sciences ad as we track the product pipeline. We look at that the large projects that we think will be awarded at a particular time. By our estimation, we believe that in the June quarter there’ll be something like $15 million of large store projects for systems that are awarded and we’re competing for each of those that we’re aware. So, we competing for what we think will be an available booking market fuel here in the June quarter of a $15 million for the systems. Jairam Nathan – Sidoti: Okay. And given the challenges in the Life Sciences, are you seeing any pricing pressure, I know there’s some, probably only one other competition, but are you seeing any of that?

No, it’s not. This is not an issue about pricing. This is about whether that’s not. This is not an issue of our pricing this is about where the projects going to be awarded in one quarter or the next right now. So, it’s not – although bids are competitive. We’re not – we’re typically not in a pricing battle. Jairam Nathan – Sidoti: Okay. And my last question is on operating expense. We saw that flattened from 1Q to 2Q and given the restricting actions that you’ve taken, how should we think about that going forward?

Jairam, this is Martin. I think you should take notes of my comments about the need to put on some additional commercial and general management resources. This is not replacing people from restructuring actions. This is newly created position and that probably will slightly increase the OpEx in the third and fourth quarters versus the current levels. So, you’ll see a slight increase in research and development and a flattish kind of SG&A level where the benefits of prior actions are offset by some – as I say, some of these additional resources that need to go into the businesses. Jairam Nathan – Sidoti: Okay. Thank you.

Our next question is from the line of Satya Kumar from Credit Suisse. Please proceed. Rohan – Credit Suisse: Hi, this is Rohan asking the question on behalf of Satya. Thanks for taking the question. I wanted to talk to you about the margins on the Life Sciences business. How should we think about margins in June and how should we think about recovery in the life sciences gross margin?

Well, clearly, what you saw with the 28.9% gross margins in the March quarter was a trough that was created by very low absorption of fixed costs. We believe that that’s a trough and we can make some modest level of improvement into the June quarter. So, you’re talking about recovery of the revenue line back to levels that we’ve seen before to get us back over 40% and that’s what we’ll be targeting if the business comes through as we believe it’s going to in the September quarter. Rohan – Credit Suisse: And also like on Life Sciences, you mentioned there were some softer revenue that was pushed out. So, just wanted to kind of understand the mix portion of it. How should we think about that business is like, related to software. Is that coming back and we should think about gross margins in similar level at December on similar revenues or is that a decline?

In December, we would continue to believe given the likely strength in the revenues, given this very strong pipeline of large projects that certainly if they don’t hit fully in September should make a nice contributions to December quarter should enable a continuation of those 40 plus margin levels into the December quarter. We’ll have some modest level of software revenues along the way. It’ll be nothing like as meaningful as it was in the first quarter of this fiscal year that produce the slightly outsized gross margin levels for the revenue levels we had. Rohan – Credit Suisse: And then, one question on your new customer. Like you feels like this customer is one of the large OEM. Is it fair to say like it’s fairly large OEM and not a small customer?

Yeah. Is it in reference to the 450 millimeter win? Rohan – Credit Suisse: Yeah. You mentioned like there was a new customer for the first time that you won the 450 millimeter business.

Yes. I’m sorry, and the question? Rohan – Credit Suisse: And the question was, is it like one of the major customers that you probably did not have like it is one of the large semi-cap OEMs or is it...?

Yeah, it’s because it’s a new customer, all of the – I think, the ones we considered to be the largest OEMs are already existing customers but this would be a next year, very important, very successful customer but it would be considered as Tier 2 provider but one that can drive a lot of volume. Rohan – Credit Suisse: Thank you. That’s all I have.

(Operator Instructions). Our next question is from the line of Ben Pang from B Riley & Company. Please proceed. Ben Pang – B Riley & Company: Thanks for taking my question. First, the clarification on the Life Sciences, somebody asked the question earlier about the order served available market or opportunity. Is the $15 million like your total booking opportunity for all the different verticals in that space that you serve?

No, Ben, just the systems. And historically, our systems business has been about 50% of revenue. Ben Pang – B Riley & Company: Okay.

So, the projects that we’re talking about really are only the, this the cold store systems booking opportunity. Ben Pang – B Riley & Company: So, I guess based on your commentary about flat orders, your expectations, you would just get one-third of that. Is that how I think about it?

No, let me try again. So, the part that’ll be flat, Ben, is the $9 million in the March quarter will be flat to slightly down maybe in the June quarter – in the current quarter. Ben Pang – B Riley & Company: Okay. But was your book-to-bill also going to be one?

Yes. So, we booked $9 million in the March quarter and we anticipate to have considerably more success than that in the June quarter. Ben Pang – B Riley & Company: Okay, okay.

We would see a significantly better one book to bill for the Life Sciences business in the June quarter. It’s likely. Ben Pang – B Riley & Company: Okay. I was just confused with the math there.

We’re about 65% plus share in the cold store business wins and we don’t intend to step backward here. Ben Pang – B Riley & Company: Okay. In terms of the semiconductor business, are your Tier I customers or your Tier II customers as strong as the Tier I guys. Is there any difference between the momentum you’re seeing with the larger equipment providers versus the smaller ones?

We have seen a strong momentum in the larger guys. I think in the second Tier. It matters geographically where they are. We have seen weaker demands from our Korean OEM customer base because of the much lower levels of activity going on within Korea. So, it’s more geographically based than anything else Ben. Ben Pang – B Riley & Company: Okay. And then, on the Crossings Automation, you commented about $3.2 million, I think in the revenue contribution, is that correct?

Incrementally, yes. Ben Pang – B Riley & Company: Okay.

Well the run rate...

That means about $13 million of crossing business in the quarter. Ben Pang – B Riley & Company: Okay, okay. That clarified that for me. And my final question, in terms of the other segments, are you guys starting to see the display business – your display applications pickup?

Yeah, Ben, not meaningfully different from where we’ve been. Ben Pang – B Riley & Company: Is that surprising to you or do you have, I mean different forecast for the year or...?

Not surprising in the sense that there are inventory situations to take into account. But other than that, we are seeing high level of discussion around future orders. So, it is consistent with other commentary you’ve seen about that space. So, it’s pent up potential Ben and we’re preparing but at present not yet. Ben Pang – B Riley & Company: Excellent and congratulations on very good quarter.

Thank you.

Thank you.

Our next question is from the line of Edwin Mok from Needham & Company. Please proceed. Edwin Mok – Needham & Company: Hi. Thanks for taking my question. First question is I think last quarter you guys talked about winning a vacuum robot at a major Japanese customer, did that revenue ramp in this quarter and how do you kind of think about that business opportunity there?

At this stage, its early stage of a production. So that has not ramped at this stage. We think it’s a well positioned application from a well positioned OEM, but we haven’t seen anything that really move the needle in the current quarter. Edwin Mok – Needham & Company: Great. That’s helpful. And then second question is if I take your frontend customer or the revenue coming from the finance side plus the incremental industrial revenue that you mentioned, right? It seems like you guys called there is more growth beyond that on the non-semi area. Can you help us all in terms of explain why you had that growth?

In the non-semi area? Edwin Mok – Needham & Company: Yeah. Those driving the growth on non-semi...

Well, if you look at the non-semi area besides the industry, we basically saw about roughly a $2 million improvements in products into adjacent technology markets. The big start to that movement was associated with backend semiconductor. So, as we kind of previously make reference to we are continuing to improve our penetration into what we believe is going to be a very significantly growing area for wafer level movements in the backend. Edwin Mok – Needham & Company: Great. Thanks for reconciling that for me. And then the third question is, if I take your guidance and adding back to roughly, I think you said $4 million worth of business that you guys are exiting right? And then based on assumption that’s Life Science is flattish, Industrial was maybe kind of flattish to potentially even down a little bit. That will imply semi actually is growing quite robustly as midpoint maybe up 10% sequentially. Did I get that math correctly, how they are going to think about it?

No, you’ve got that’s exactly right. We find the frontend semi business, although it’s take a pause, it’s still a growing market for us. And we are encouraged because of that’s about the potential for what might happen in the back half of the year even though it’s a very cloudy situation. Edwin Mok – Needham & Company: Great. Thanks a lot. And then one quick question on Life Science, the $50 million opportunity that you guys are going after, Am I clear that what do you think is those are opportunities you don’t necessarily win all of them historically you had 55% trend that you’ll go after, but that’s only system and on top of that you’re going to get some incremental comp parts and service revenue, is that the way, what do you think about that.

Yeah, the way is typically you look at the run rate that we’ve been going at with consumable, services, and devices, that has been somewhere in the $6 to $8 million range. It took a little bit of revenue in the March quarter. So, you’ve got that level of business going on as well as the opportunities that come from these handfuls of a very significant larger store opportunity, but frankly we feel very, very strongly placed and we’re going to trying to win them all. Whether we will, we will see. Edwin Mok – Needham & Company: Great. One last question. Martin, we like you, but just curious where is the CFO search is going, where are we on that process.

Hi Edwin. We’re still in process and we’ve been fortunate to see some good candidates, but as soon as we are definitive, we will announce for sure, but we’re still in the process. Edwin Mok – Needham & Company: What is the timeframe for that, maybe as an early downtime.

Well, we’re certainly ready. That’s going to take us a little bit of time, but Martin has graciously agreed to stay with us into the summer and we’re going to take him on that through the transition, we hope. Edwin Mok – Needham & Company: Great. That’s all I have. Thank you.

There are no further questions from the phone lines at this time. I’ll turn the call back to you.

Okay. Thank you everyone for your interest in Brooks and we do look forward to speaking with you when we report our results for fiscal 2013 third quarter. Thank you.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Thank you.