Q1 2021 Brooks Automation Inc Earnings Call
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Ladies and gentlemen, please standby the conference will begin momentarily. We thank you for your patience and I said you. Please remain on the line.
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Greetings and welcome to the Brooks automation Q1, 'twenty 'twenty, one and financial results. During the presentation. All participants will be in a listen only mode. Afterwards, we'll conduct a question and answer session at that time. If you have a question. Please press the one followed by the four on your telephone if at any time during the conference you need to reach and I'll pay.
Please press Star zero and the remainder of this conference is being recorded Tuesday February stuck into 'twenty 'twenty, one I would now like to turn the conference over to Sarah Silverman Director of investors Investor Relations. Please go ahead.
Thank you Malika and good afternoon to everyone on the line today, we would like to welcome you to our earnings conference call for the first quarter of fiscal year 'twenty 'twenty one.
Our first quarter earnings press release was issued after the close of the market today.
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So operator, and my apologies and it sounds like we're having the technical difficulty. This is Linda and maybe I can continue the remarks here.
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Yes, Sarah Sarah we hear you know Malik of my apologies here and the our conference room, we lost sound and I'm not we're unclear on whether that's the transmission of Sarah or if it was just our audio here on the room.
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Thank you Malika and good afternoon to everyone on the line and today, we would like to welcome you to our earnings conference call for the first quarter of fiscal year 'twenty 'twenty, one our first quarter earnings press release was issued after the close of the market today and is available on our Investor Relations website, located at Brooks that Investor and Dotcom and addition to the.
Memory, Powerpoint slides that will be used during the prepared remarks today I would like to remind everyone 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.
Many factors that may cause the actual financial results or other events to differ from those identified and such forward looking statements I would refer you to the section of our earnings release titled Safe Harbor statement, the Safe Harbor slide on the aforementioned Powerpoint presentation on our website and our various filings with the SEC, including our and.
Annual reports on form 10-K, and our quarterly reports on form 10-Q, we make no obligation to update these statements should future financial data or events occur that differ from the forward looking statements presented today.
We may refer to a number of non-GAAP financial measures, which are used in addition to and in conjunction with the results presented in accordance with GAAP. We believe the non-GAAP measures provide an additional way of viewing aspects of our operations and performance, but when considered with GAAP financial results and the reconciliation of GAAP measure.
Ruth they provide and even more complete understanding of the Brooks business non-GAAP measures should not be relied upon to the exclusion of GAAP measure of this themselves.
On the call with me today is our President and Chief Executive Officer, Steve Schwartz, and Executive Vice President and Chief Financial Officer, Lindon Robertson, We will open the call with remarks from Steve on the highlights on the first quarter than wind and we'll provide a more detailed book into our financial results on our outlook for the second.
Fiscal quarter of 2021, we will then take your questions at the end of the prepared remarks with that I would like to turn our call over to our CEO Steve Schwartz.
Okay.
Thank you Sarah and welcome to Brooks.
Good afternoon, everyone. It's a pleasure to be able to report to you today on the results from another strong quarter.
It's hard to fathom that were just six weeks away from the one year anniversary of the first the impacts of Covid on the company and all of its change so dramatically and the world since then.
From the moment, we redeemed and essential company, we began to adapt and not only to be certain that we could satisfy our customer demand, but also to sustained growth during this period.
More than anything this past year confirm the need for our technologies.
Tests that our operational capability and allowed us to demonstrate to our customers that we can meet their new challenges and opportunities that they presented to us and there were many.
So although we're still in the midst of of very cautious environment, and we remain bullish about our future.
Today I will comment on results from another quarter of record revenue and highlight the key drivers that we believe will allow us to sustain the trajectory Linden.
And then we will give color to a quarter of strong earnings and more importantly, and look at our forecast which is quite robust.
Our market opportunity comes from our unique portfolio of offerings the targets high growth high complexity applications, where we can differentiate our solutions, we've been deliberate and our approach to achieving double digit growth and we positioned our unique capabilities to sustain our share gains post pandemic.
In life Sciences, we satisfy the needs of the research and clinical communities, who need to manage and interrogate millions of samples each day with the highest quality and fidelity.
Our bio storage bio sample based offerings of our essential capabilities and the discovery pipeline.
Similarly, our semiconductor products of specialized technologies that enable more than 200 critical Oems and device makers to produce the leading edge semiconductor devices that fueled the information age and are now enabling the next technology wave that will satisfy <unk> high capacity computing autonomous vehicle and.
The trillions of devices that will be part of the interconnected internet of things.
And both the life Sciences, and semiconductor markets, our customers know us for our innovation and enabling solutions as well as a reliable execution.
I will now give some color into our business segments, starting with life Sciences.
Life Sciences revenue was $118 million up 29% year over year.
Consistent with our aggressive share gain momentum, we added 400 more customers and the quarter as we continue to build our reputation for high quality fast turn echo of excellence and services and products developed by some of the best scientific and engineering talent and the industry.
And services, we rode the wave of positive momentum delivering $73 million and revenue up 17% year over year.
Next generation sequencing reached $20 million and revenue up 25% over Q1, and 2020, driven by a steady increase in volume from existing customers, but also customers drawn to our new solutions, including gene therapy workflow solutions and our single cell analysis capabilities.
Once again, we demonstrated our outstanding synthesis capabilities by delivering another record quarter, and Q1 up 49% year over year.
Our strong value propositions for antibody discovery and cell and gene therapy are enablers for these exciting research areas we.
We continue to invest and gene synthesis capacity expansions in China, and the U S to be able to meet this robust demand.
And even though what's the mature technology, our Sanger business was up 7% year over year.
Sanger sequencing remains an important part of discovery and development and although it's been a standard for more than 40 years is still plays and extremely valuable role and the advancement of scientific discovery and we continue to grow business across the globe.
And the sample and repository solutions portion of the services business, we likewise delivered strong growth.
Tibet growth back to a growth rate, we have not seen for a couple of years as we continue to gain new customers and pharmaceutical and clinical sectors, while gaining momentum and vaccine related services.
Storage revenue was at record levels.
Even without the addition of one $5 million of vaccine related services revenue Srs grew more than 20%.
And we're pleased with the positive momentum and the Srs business, which includes new business that gives us confidence and the continued strong performance throughout the year.
Specifically in the quarter, we kicked off the first phase of a new contract with the large pharmaceutical company. When we received the first tranche of what will be seven and several millions of samples that are scheduled to be received by the end of this year on.
And we added 24, new Srs customers in the quarter.
The life Sciences products had a particularly strong quarter, delivering 50% year over year growth to a record $46 million.
We added 100, new customers for the consumables and instruments, including many who came to us because of scarcity and consumables due to work flow demand from COVID-19 related needs.
We believe that we'll be able to maintain the large percentage of these new customers even after the impact of the pandemic subsides not only because of our ability to meet their needs now, but as I mentioned on our last call. The COVID-19, driven shift to automated handling and processing has caused more rapid conversion to automation capable consumables.
Which favors our products over many competitor offerings driving what we believe will be of sustained demand for our consumables products beyond COVID-19, driven business.
We maintained meaningful market penetration and our automated stores product lines and our cryo stores business. We completed the installation of six <unk> III cryo units for one customer and we now count more than 30 customers, who have purchased multiple systems cryo.
Cryo store shipments remain heavily weighted to cell and gene therapy applications with more than 75% of units purchased for those applications.
Our momentum continues to build and we anticipate that we will see a faster ramp and of post Covid world.
Still we're pleased with the adoption of this technology and the acceptance by our customers of this innovative and enabling product capabilities.
Additionally, the backlog for large automated stores is building and projects that have been slowed since the early days of the pandemic our position to accelerate and the second half of our fiscal year.
Overall, we're seeing strong demand across all of our life Sciences offerings, we're investing to build out our footprint with five active capacity expansion projects currently underway and three different countries.
We're bullish about the prospects not only to serve the customers and segments that have delivered this growth, but also to begin to bring more integrated solutions to the market that will deliver more value to customers and the form of streamlined and more secure workflows, but also and the ease of doing business with the single vendor who's capable and willing to manage critical and complex.
<unk> of their workflows.
Towards that and we're proud to announce that Linda the Jesus has joined Brooks. This is chief commercial officer with responsibility for commercial activity across all of our life Sciences business Lynn.
Linda started with us at the beginning of January and she is already having an impact on our go to market approach.
Her experience and track record was earned at the senior positions at Thermo Adjuvant and waters Corporation, and our deep understanding of the industry and vast global business experience make her a tremendous and welcome addition to our executive leadership team as we advance of the next level of capability for our customers.
Our life Sciences business is the story of exceptional growth on our last earnings call. We noted that in the September quarter, we had surpassed the $100 million and life Sciences revenue for the first time.
Putting us on a trajectory for $400 million and annualized revenue.
Now here, we are and the middle of the quarter Thats already on a path to of $500 million annualize.
The annualized revenue run rate.
Exceptional growth by any measure and a trend we intend to continue.
Now I will turn to the semiconductor business and our semiconductor segment, we remain the beneficiaries of strong capital spending for capacity additions that are supporting the tremendous growth and semiconductor devices for mobile communications high capacity computing artificial intelligence and machine learning as well as the explosion.
And of Internet of interconnected devices enabled by the Internet of things.
Spending plans recently announced by some of the major chipmakers bode well for our outlook and we're seeing orders and backlog at record levels seating.
Seating what looks like another very strong growth year, and our semiconductor business.
Our critical technology positions and automation and contamination control and the expanding need for the secular growth drivers is propelling our above market growth with no signs of slowing down.
Semiconductor revenue and the quarter was $131 million up 11% year over year. This increase was led by automation products slowed slightly by contamination control, which was solid but down in comparison to our record Ccs quarter in Q1 of 2020.
Nonetheless, the semiconductor markets on a tear and we continue to outperform the market as we have for the past several years.
Our automation revenue the combination of robots and systems for process equipment was up 41% year over year and support of tier one and tier two Oems.
And not just consistent with growth in the segment, but faster because of our increased market share from design wins over the past years as a matter of fact last quarter, we reported of 50% year over year growth and automation products. So these outperformance numbers and not one timers, but rather consistent with the strong and sustained period of growth.
Revenue from advanced packaging was once again very healthy up 3% from Q4 to $18 million and increase of 78% year over year. As we are seeing increased investment not only in the front end manufacturing capacity, but in the back and as well.
We anticipate more healthy growth for advanced packaging throughout the coming year.
Contamination control delivered another good quarter and that we sustained our exceptionally high market share for leading edge capacity additions Rev.
The revenue of $29 million was solid, but some $15 million below the record revenue quarter, we delivered one year ago. When there was the significant capacity addition of tier one foundries.
Q1 was a particularly strong quarter for design win activity and continued share gains.
We secured business for a number of Ccs tools for of three nanometer pilot line. We also captured <unk> pod clean tools from two DRAM manufacturers and these are our first <unk> orders for memory.
And we won new customers, and Japan, China, and Europe for image sensor memory and logic applications respectively.
Our outlook for Ccs is for the March quarter to be the start of a ramp into it even stronger June quarter.
Again, our market share is strong our product development activity, it's aggressive and we are winning new share at next generation notes for both wafer and radical carriers as the opportunities present themselves, we expect to capture them.
All in the semiconductor business is robust and we believe on the verge of of long and strong period of enablement for the global economy.
Not only in communication and computing, but and its critical role in support of the conversion from fossil fuels to more sustainable sources of energy.
And a more conservative move to electrification each of these catalysts is the driver for our business and we are partnered with equipment makers and device makers to ensure that our capabilities enable them to satisfy these applications.
In Q1, we delivered another quarter of double digit growth from two strong businesses. The sustained outsized growth comes with tremendous prospects for continued outperformance.
We have a sustainable competitive advantage from both of our applications of science and technology and engineering, but also from our close connections with customers and support of their critical needs.
Our focus is clear our markets are robust and demanding our solutions and we've established strong trusted relationships that are becoming more secure with each request, we fulfill and breakthrough breakthrough that we deliver.
We're off to an excellent start to 2021, and we look forward to all of that will deliver in the coming quarters.
That concludes my formal remarks about the quarter and I'll now turn the call over to Linda.
Thank you Steve.
And I call your attention to the slides on our website and we will begin with the summary highlights on slide three.
Q1 was indeed, another strong quarter revenue grew 19% year over year, driven by strong double digit growth and both businesses with 29% growth and life Sciences, and 11% growth of semiconductor solutions, we have added $39 million of additional revenue to the top line over the same quarter last year.
Of course with this level of revenue growth and a business model with profit leverage you'll see significant momentum and earnings non-GAAP earnings per share was supported seven up.
Up 108% year over year.
And under this youll see significantly improved gross margins that are 470 basis points higher than a year earlier, a key point to highlight is the life science of sustain 50% gross margin again.
Cash flows also certainly a highlight of $44 million and cash from operations for the quarter and in fact, it's a record for us for any first quarter, when we pay out of our variable compensation.
Let's move now on to slide four for details of the first quarter.
With revenue up 1% sequentially and 19% year to year, the GAAP earnings per share from continuing operations was 36.
Referring over to the non-GAAP results on the right side of the page you can see earnings per share for the quarter came in at 47.
More than double last year's results gross margins at 46, 3% expanded that 470 basis points that I've just highlighted.
Driven by 590 basis points of improvement in life Sciences, and also supported by semi with 320 basis points of improvement year over year.
The increase in operating expense reflects the investments in R&D, driven by engineering projects and the semiconductor solutions and and SG&A with additional head count incremental structure from acquisitions and higher variable compensation accruals across the company.
The revenue growth and gross margin expansion drove operating income up 99% operating margins of.
The 17, and 5% up 710 basis points year over year, and adjusted EBITDA margin was 23, 2% up 800 basis points.
Below the operating income line Youll see favorable benefit shows up and the FX line compared to a loss a year earlier and the non-GAAP tax rate and the quarter was 22%.
When you combine it all we saw the 108% growth and the non-GAAP earnings per share.
So now let's please turn it over to page five for the results and our life Science business.
And the first quarter, our life science business generated revenue of $118 million and increase of 29% when compared with Q1, 2020 and 9% sequentially.
As noted on the chart the organic growth of the business was 32% year over year.
We estimate revenue had a net positive impact from COVID-19 related demand by approximately $10 million and the quarter was the primary driver being our consumables and instruments business.
If we were to exclude this the organic growth would be approximately 20% year over year.
The products business grew a significant and 53% year over year, driven by continued strong demand and the consumables and instruments.
A portion of this growth as I said is driven by the demand of our PCR plates and automation capable tubes, and automation instruments, all of which had been and high demand and the Covid research environment.
The life Science services business, excluding the alliance revenue grew 28% year over year. This.
And this business is comprised of <unk> and our sample repository solutions offerings.
The gene was business grew 28% year over year.
And accelerated 7% quarter over quarter on a sequential basis, driven primarily by continued strength and Ngls and synthesis demand.
Excluding the alliance revenue stream sample of repository services was up 29% year over year.
The growth was led by the storage services and informatics.
Now for gross margin of 52% for the quarter were higher by the 590 basis points year over year exiting the alliance contracted contributed 210 basis points favorable mix benefit and the remaining 380 basis point increase came from improved performance of the current portfolio.
And the life science products business gross margin was 45, 7% of 310 basis point improvement year over year again, driven primarily by the strength of the consumables and instruments and the life Science services business provided 53, 1% gross margin and the quarter of 790 basis points year over year drew.
And by volume leverage and gene was and the mixed benefit of exiting the alliance.
The services business includes approximately $2 million of revenue from the two recent acquisitions. The informatics business acquired in February 2020, and the sample procurement services business acquired in December both of which carry higher than average gross margin.
And total the Q1 operating margin of 18, 8% expanded 12 percentage points over the last year.
As we look into the second quarter of 2021.
We expect life sciences revenue to be and the range of $120 million to $128 million. This range indicates another $2 million to $10 million of revenue expansion from this quarter and will support approximately 25% to 35% growth year over year.
Let's turn to the semiconductor business on slide six.
Semiconductor solutions revenue of 131 million and the quarter increased 11% compared to the first quarter of 2020 and was down 5% sequentially as Steve noted the automation products grew 41% year over year within this group of products the.
Vacuum automation portion, including robots and systems grew 57%.
Revenue and our contamination control business was down 34% year over year consistent with the expectations for the quarter and services business was actually up 15% year over year.
Semiconductor operating margins were 16, 4% up 380 basis points year over year, but down a similar amount sequentially gross margins remained strong and 42, 8% up 320 basis points compared with last year driven in part by favorable mix to high.
And your margin vacuum automation and by improved cost absorption.
Operating expense growth was driven by R&D and variable compensation accruals.
We look forward I'm, sorry, we look toward our second.
The fiscal quarter of 2021, and we expect semiconductor revenue to be on the range of $147 million to $155 million.
And now this would be another 16% to $24 million of revenue expansion sequentially and sports year over year of growth of 18% to 25%.
So, let's turn over to slide seven for the summary of cash flow for the quarter.
Operating cash flow and the first quarter was $44 million as I referenced and the highlights. This is a historical high for a first quarter on which we pay out of annual variable comp.
The profit leverage to drive higher EBITDA with the growth of the business is evident and is converting to cash flow.
And when I reflect on the past year, excluding the taxes paid on that gain on the sale of the cryo pump business, we've generated and adjusted operating cash flow of $147 million on a trailing 12 months basis.
We used approximately $15 million and this quarter for Capex.
And includes $5 million for the gene was China building project. So.
About $10 million on the operational Capex basis.
We paid $7 million of dividends to shareholders and the quarter.
So, let's turn over to slide eight for a quick view of the balance sheet.
Working capital was stable, even while current assets increased to support growth.
The deferred revenue was driven upward by advanced billings on new large store systems.
And at the end of the first quarter, we had $323 million of cash restricted cash and marketable securities. This is an increase of $17 million.
With that stable at $50 million, we finished the quarter with $272 million of net cash which was also up to 70 of the same $17 million.
Let's turn to slide nine of our guidance for the second quarter of 2021.
Revenue is expected to be and the range of $267 million to $283 million.
That semiconductor revenue again expect it to be and the range of $1 47 to $1 55, and life science revenue expected to be and the range of $120 million to $128 million.
Adjusted EBITDA is anticipated of 58% to $67 million.
And non-GAAP earnings per share expected to be 48% to 57 per share.
Meanwhile, the GAAP earnings per share is expected to be 33% to 42.
Now as we've wrapped up our prepared remarks, let me take a moment to acknowledge serious silberman, our new director of Investor Relations and my apologies the Sara for the Splash that we created there where the technical difficulties on the.
The first call, but she joined US in January and began.
And.
Began nicely, bringing in experienced from the sell side operational treasury experience and.
And I've been really pleased with the partnering.
Very closely with me through the cycle and I know each of you can look forward as she has to interacting.
With you on the Investor front.
So you can find our contact information on todays press release as well as on our website on the investor.
Site of our website.
So this includes our prepared remarks, I'll now turn the call back over to <unk> to take questions from the line.
Thank you.
Ladies and gentlemen, if you would like to register for a question. Please press the one followed by the four on your telephone.
We'll hear of three ton pump technology. The quest. If your question has been answered and I would like to withdraw your registration. Please press. The one followed by the three once again, ladies and gentlemen. It is one four if you have a question.
Our first phone question is from the line of Jason and Johnson with Stephens Inc. Please go ahead. Your line is now open.
Hey, Thanks for taking the questions and congrats on the quarters on the <unk>.
Quarter.
And maybe maybe first question just on the the consume consumables and instruments side of things.
Obviously that that business has been performing really strong recently it sounds like there has been some benefit from COVID-19, but Steve from your comments and also it sounds like you think this revenue growth will be durable. So maybe can you first.
Comment on the near term outlook for C&I, and and then maybe expand on your.
The comments around the durability of those revenues.
Sure Jacob Thanks, and where.
We were able to bring capacity online and so one of the reasons just say the demand has been strong since the earliest days of the pandemic.
And we worked pretty hard to bring on some more sourcing so that we're able to have more capacity. So I think the demand has been sustained and our ability to serve is what's helped us to drive the business.
In terms of the durability of the business.
And yet to prove it but what we find is that a lot of the consumables and instruments customers arent necessarily coming to us for Covid specific things, but they just don't have the source that they might have had and the past and we believe that because of the number of instruments that remain at a relatively high level, we can tell that the.
The lines the workflow lines are becoming more automated so we do believe there is of a.
Shift here, that's been accelerated by the Covid environment, where some of the work flow lines are extremely high volume and can no longer be done and the manual fashion and I think thats converting a lot more people to automated workflows.
And we do believe.
And that at least we'll be able to sustain we hope of significant number of the customers who have come to us and we started to use our instruments and our automated will tubes, and we think that'll be sustainably.
And another year to prove that out, but we feel pretty confident that the customers. We have are really high quality customers that are that we intend to have for a long time.
Got it Okay. That's helpful. And then Steve you also heard you talk about cell and gene therapy, a couple of times I think.
A couple of different business lines.
And I don't know if you guys have have numbers, but maybe can you just update us on on the revenues.
Generating from from the cell and gene therapy and market or for any other kind of color you want to give around on that end market.
So Jacob at the moment, it's the.
The question that it's a really good question and we don't have all of the precision that we want when.
And when we track it on a like for like basis, we see 20, and 30% growth in the cell and gene therapy, but I won't I won't say that we're 100% confident we're capturing everything.
Nor with the precision that we ought to so.
<unk>.
Just to give you an idea these are numbers bright by our calculations that are roughly and the.
$6 $7 million of quarter, and that's up 20%, 30% from of what it was a year ago, but we'll keep working on this one but it gives you an idea of the magnitude here.
And is healthy, but we think there is a lot more upside here.
Got it and congrats on the quarter. Thanks for taking the questions. Thanks, Jake Thanks Jacob.
Thank you and our.
Our next question is from the line of Patrick Ho with Stifel. Please go ahead of your line is open.
Thank you very much and a belated happy new year and congrats on the the nice quarter.
Maybe first off on the semiconductor side and.
You mentioned in your prepared remarks about the strength, particularly with your top tier one and two.
The top tier one and two Oems.
Traditionally going to more advanced nodes and more advanced device structures.
Sure do you usually see more advanced.
Packaging type of techniques.
Where are you seeing the front and shifts to.
So the more advanced nodes driving.
<unk> packaging, particularly on your right and we made a lot of inroads in terms of share wins.
Well, there's a lot packed into that Patrick let me, let me try a couple of things.
One of the things that we observe is theres been a a much faster shift from our market, leading magnet Trent seven and Magna trend eight product lines and these are products of but in the market now for more than a decade, we launched less than two years ago, We launched the magnet trend leap, which is the next generation vac.
Automation capability of that takes us down below at seven nanometer and below and.
The the speed with which customers of transform to this new model has been way beyond our expectations and give you an idea in the September quarter to the December quarter, we shipped four times as many units of the magnitude and leaf as we did.
And in December as we did in September and.
And and it surpassed the number of Magnetek had seven of Magna trend a robot. So it was a it's an overwhelming shift and so we know the demands are there we know the capabilities that we brought our really significant what we see on the advanced packaging side.
Our related now more than just handling our complex substrate, we see the same kinds of of low contaminant and high precision handling requirements in advanced packaging.
We used to see only and the front and so we're seeing more challenging environment.
And just the continued strong demand for the products that theres not a lot of overlap there is not we don't see as much tier one in the advanced packaging as we do tier two but the breadth of the tier two players and they do span front end and backend.
And packaging.
Much more so than we had even two years ago.
Great. That's helpful and maybe as my follow up question, you had really strong business trends on the services side in life Sciences, and I think you mentioned a lot of the gene with the opportunities that you saw during the quarter can you give just a little more color on the sample storage management services business.
Whether anything COVID-19 related or.
<unk> Biopharma.
<unk> uses of the sample management services in this type of environment.
Sure Patrick So generally we had good increase and the amount of storage.
Everyone's aware.
For the past 18 months, we've had a pretty significant effort on.
The what used to be called the bio storage business on our ability to continue to capture more collections and.
Enhance the storage capacity and capability and customers and I think we've been very successful there on the COVID-19 related activities and indeed, not just from a vaccine standpoint, but with six different companies, we've now begun to to store the.
The COVID-19 positive samples and so managing those collections has been of new and interesting challenge for us and even and the even and the most recent quarter. We started to have opportunities for automated stores, where the samples from patients will be taken and later when they are deemed to be positive or negative <unk> <unk>.
Simple. So then three hours to sort it out and so where he is and automated stores for that purpose to so across the portfolio on the sample management side, we're seeing different opportunities to help to deal with the.
With the Covid samples so it's the breadth of capabilities and a breadth of of opportunities I won't say any one of them is moving a couple of million dollars at the time, but they are significant and our ability to adapt our products and services.
And to serve those immediate applications has been has been really strong so far.
Great and maybe a final question for Linda and in terms of cash flow generation with the outlook as you go into 2021 with the strong semi environment with the life Sciences business now and also starting to turn positive.
And especially on the upward momentum side of things how do you look at cash flow generation given the working capital metrics look very good is this the potentially record setting year and cash flow generation for the company.
Yes, Patrick that's exactly what we expect and I think the last two quarters. If you look at the two quarters Q4, and Q1 combined we're just just a few million short of $100 million and that last six months I think you're seeing indicative capability of the business going forward. So we're quite pleased about that it's the <unk>.
<unk> cash.
It's fueling our ability to invest not just organically, but to put some on our balance sheet for potential M&A as well and so we're really pleased with the.
Great. Thank you very much yeah. Thanks, Patrick I appreciate the call.
Thank you, ladies and gentlemen, once again as a reminder, if you have a question. Please press the one followed by the four.
Our next question is from the line of Paul <unk> with Keybanc. Please go ahead. Your line is open.
And what was.
Organic growth what was the FX impact on the quarter.
Paul.
Give me a second and it was a couple of million dollars, but it will.
On break that out and our 10-Q, let me say the Youll see it and the 10-Q broken out when it's filed.
But it's a modest to modest impact did you talk to Covid impact.
Steve.
And we didn't have the COVID-19 impact.
Right, what I highlighted was I had I had roughly about $10 million of positive <unk> and the life Sciences business and the quarter and I mentioned that it was substantially driven by the consumables and instruments around the Covid lindon.
Yes, that's right at consumables and instruments automation is a piece of that but the.
We had supply capabilities, where others didn't and we also saw and attraction for high volume driving a desire for automation capability and the tubes that we produce work in temperatures all the way to minus 190 and hub and have automation ready.
Caps.
Barcodes on the site <unk> barcodes on the bottom, which is not necessarily and industry standard it's a little bit of the differentiation. So the capability. There is quite strong and this is why.
As we highlighted we picked up more than 100 customers and the quarter and some of those undoubtedly were.
The COVID-19 based customers that Werent finding supply other places and our aim is to delight those customers with the experience they help with us and we expect we're going to keep on particularly with the automation capabilities.
Paul I wanted to Illinois, and make sure that we're clear on this one too we have some of the C&I customers, who might be buying consumables from us that are not for COVID-19.
Because of Covid is always the first priority. So if we have a customer who needs of the for Covid. They get the first priority.
But if they if they could no longer get.
Some of their consumables, because another supplier had prioritized COVID-19 and they can buy another tube from us for their continued research we count that in Covid related demand that came our way.
Right.
And then lastly regarding Jim with the.
Expansion in China, where specifically, what's the square footage was potential contribution and timing thereof.
Yes.
Well I'll highlight two use of significant building size and of replaces.
And the existing four lease basis that we have and Suzhou, China. It provides us.
Almost double the capacity and the first phase building and we have a second phase build when I say that double of what we have and Suzhou currently which is our second largest operational site in terms of capabilities next too.
Our new Jersey site and.
And with that said two more years later, we have the option to.
And likelihood to add another building on the same property. It's the phase two so so we have another significant step and capacity capable there and I'll just highlight.
And not be something on everyone's radar soochow is often described as sort of the Cambridge of.
China is the life Science Rich district when you.
When you right through to see Joe you see company after company and the life Science market. So resources of rich the sciences rich capabilities the Infrastructure's beautiful.
So we're really pleased with that we expect that building to go operational by the end of this calendar year or before.
Okay. Thank you very much.
Thanks, Paul.
Thank you and there are no further question I would like to turn the call back over to Lindon Robertson for any closing remarks. Thank.
Thank you Malika and.
And to everyone.
On.
Again.
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Fortunate and the businesses that we've positioned ourselves with but also in this environment.
We continue to hone the business you've seen the acquisitions that we did this last quarter. We continue to apply the same rigor to our investments we.
The continued to grow out the business with on the investments organically as well and you can see that and our results and very pleased with the leverage model.
We're excited about the ramp ahead of us both on the semiconductor side that seems to be of very.
Prime environment going forward and.
And of course on the life Sciences side as not only we hope to solve deep of participant and solving the COVID-19 challenges, but also the growth around the exciting space of cell and gene therapy, and and other research endeavors. So we kind of ourselves is vital to both spaces and we've.
We've been fortunate that the.
That all of the authorities around the globe of kind of this vital and deemed as essential throughout this period as we look forward to producing another quarter of results that we've described and look forward to talking to you through the quarter and see you next quarter on the earnings call and.
And with that thank you all for your participation.
Thank you, ladies and gentlemen that does conclude today's call. We thank you for your participation and ask that you. Please disconnect your lines.
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