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Management's Discussion of Results of Operations (Excerpts)

For purposes of readability, Zenith attempts to strip out all tables in excerpts from the Management Discussion. That information is contained elsewhere in our articles. The idea of this summary is simply to review how well we believe Management does its reporting. Also, this highlights what Management believes is important.

In our Decision Matrix at the end of each article, a company with 0 to 2 gets a "-1", and 3 to 5 gets a "+1."

On a scale of 0 to 5, 5 being best, Zenith rates this company's Management's Discussion as a 5.


OVERVIEW

We are a leading global provider of automation and cryogenic solutions for 
multiple applications and markets. We primarily serve the semiconductor capital 
equipment market and the life sciences sample management market. We believe our 
leadership position and global support structure in each of these markets makes 
us a valued business partner to the largest semiconductor capital equipment and 
device makers and pharmaceutical and life science research institutions in the 
world. Our offerings are also applied to industrial capital equipment and other 
adjacent technology markets.

In the semiconductor capital equipment market, equipment productivity and 
availability are critical factors for our customers, who typically operate 
equipment under demanding temperature and/or pressure environments. Our 
automation and cryogenics capabilities are demonstrated in our various robotic 
automation and cryogenic vacuum pump offerings, both of which are used by 
semiconductor manufacturers in the processing of silicon wafers into integrated 
circuits. In the life sciences sample management market, we utilize our core 
competencies and capabilities in automation and cryogenics to provide 
comprehensive bio-sample management solutions to a broad range of end markets 
within the life sciences industry. Our offerings include automated ultra-cold 
storage freezers, consumable sample storage containers, instruments that assist 
in the workflow of sample management and both on-site and off-site full sample 
management services. In recent years, we have made significant investments in 
research and development and acquisitions to strengthen and grow our product 
and service offerings for the markets we serve.

Over the past years, acquisitions and our own product development initiatives 
have enabled us to create a strong capability portfolio to address the sample 
management needs across multiple end markets within the life sciences industry. 
In fiscal year 2016, we acquired BioStorage Technologies, Inc., or BioStorage, 
based in Indianapolis, Indiana for a total purchase price of $125.2 million, 
net of cash acquired. BioStorage is a global provider of comprehensive sample 
management services, including outsourced storage, cold chain logistics and 
relocation, bio-processing solutions, project management, consulting and 
related technology solutions that provide sample intelligence, virtualization, 
and visualization capabilities through an informatics platform.

Since entering the life sciences industry, we have also strengthened and 
broadened our product portfolio and market reach by investing in internal 
product development. During fiscal years 2016 and 2015, approximately 25% of 
our research and development spending was focused on innovating and advancing 
solutions in the life sciences sample management market. In fiscal year 2014, 
we installed our first TwinBank platform, an internally-developed automated 
sample management system designed for high reliability and maximum flexibility. 
In fiscal year 2016, we launched Biostore™ III Cryo, an automated system which 
incorporates sample retrieval, archiving, monitoring, tracking, inventory 
control, and related enterprise systems connectivity with the industry’s 
leading cryogenic sample storage freezers. We expect to continue investing in 
research and development and making strategic acquisitions with the objective 
of expanding our offerings in the life sciences sample management market.

On November 28, 2016, we acquired Cool Lab, LLC, or Cool Lab, a newly 
established subsidiary of BioCision, LLC, or BioCision, which provides a range 
of cryogenic solutions that assist in managing the temperature stability of 
therapeutics, biological samples and related biomaterials in ultra-cold 
environments. We held an equity interest in BioCision prior to the acquisition 
and collaborated in the development of advanced solutions in temperature 
controlled environments. The acquisition of Cool Lab is expected to allow us to 
extend our comprehensive sample management solutions across the cold chain of 
custody, which is consistent with the other offerings we bring to our life 
sciences customers. The aggregate purchase price of $15.2 million consisted of 
a cash payment of $4.8 million, a liability to the seller of $0.1 million and a 
non-cash consideration of $10.3 million measured at fair value on the 
acquisition date.

Segments and Reporting Units Realignment

Prior to the third quarter of fiscal year 2016, we had three operating and 
reportable segments that consisted of Brooks Product Solutions, Brooks Global 
Services and Brooks Life Science Systems and six reporting units, including 
five reporting units that had goodwill. Four reporting units were a part of the 
Brooks Product Solutions operating segment, and each of the Brooks Global 
Services segment and Brooks Life Science Systems segment represented a 
reporting unit.

During the third quarter of fiscal year 2016, we reorganized our previous 
reporting structure into two operating and reportable segments consisting of: 
(i) Brooks Semiconductor Solutions Group; and (ii) Brooks Life Science Systems 
and reported our financial results for the periods then ended based on the 
revised segment structure. Additionally, we realigned our reporting units into 
five reporting units, including four reporting units within the Brooks 
Semiconductor Solutions Group operating segment and one reporting unit which 
was Brooks Life Science Systems operating segment, to reflect the revised 
reporting structure. We tested goodwill for impairment before and after the 
reporting unit realignment and determined that fair value of each reporting 
unit individually and all five in aggregate exceeded their carrying values. 
Please refer to Item 7 "Management’s Discussion and Analysis of Financial 
Condition and Results of Operations" included in the 2016 Annual Report on the 
Form 10-K for further information on the segments and reporting units 
realignment, as well as operating segments’ description and accounting 
policies.

Business and Financial Performance

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016

Results of Operations- Revenue for the three months ended June 30, 2017 
increased to $181.7 million, or by 23%, as compared to the corresponding period 
of the prior fiscal year. Gross margin was 39.4% for the third quarter of 
fiscal year 2017 as compared to 36.7% for the third quarter of fiscal year 
2016, which resulted in an increase in gross profit of $17.4 million. Operating 
expenses were $52.8 million during the third quarter of fiscal year 2017 as 
compared to $45.7 million during the third quarter of fiscal year 2016, an 
increase of $7.1 million. Operating income was $18.8 million during the third 
quarter of fiscal year 2017 as compared to $8.5 million for the corresponding 
period of the prior fiscal year due to the revenue growth and gross margin 
improvement, partially offset by an increase in operating expenses. Net income 
was $17.4 million for the three months ended June 30, 2017 as compared to $8.6 
million for the corresponding period of the prior fiscal year. The increase of 
$8.8 million was primarily attributable to higher operating income of $10.3 
million and higher income generated from our equity method investments of $2.2 
million, partially offset by higher income tax provision of $3.5 million. 
Please refer to "Results of Operations" section below for a detailed discussion 
of our financial results for the three months ended June 30, 2017 compared to 
the three months ended June 30, 2016.

Nine Months Ended June 30, 2017 Compared to Nine Months Ended June 30, 2016

Results of Operations- revenue for the nine months ended June 30, 2017 
increased to $511.0 million, or by 27%, as compared to the corresponding period 
of the prior fiscal year. Gross margin was 37.8% for the first nine months of 
fiscal year 2017 as compared to 35.1% for the first nine months of fiscal year 
2016, which resulted in an increase in gross profit of $51.5 million. Operating 
expenses were $146.3 million during the nine months ended June 30, 2017 as 
compared to $147.7 million during the corresponding period of the prior fiscal 
year, a reduction of $1.4 million. Operating income was $46.7 million during 
the first nine months of fiscal year 2017 as compared to an operating loss of 
$6.2 million during the first nine of fiscal year 2016 due to the revenue 
growth, gross margin improvement and a reduction in operating expenses. Net 
income was $45.2 million for the nine months ended June 30, 2017 as compared to 
a net loss of $(80.0) million for the corresponding period of the prior fiscal 
year. The increase of $125.2 million was primarily attributable to lower income 
tax provision of $65.2 million driven primarily by the change in a valuation 
allowance against U.S. net deferred tax assets during the nine months ended 
June 30, 2016, higher operating income of $52.9 million, higher income 
generated from our equity method investments of $6.0 million, as well as a gain 
of $1.8 million recognized on the settlement of the equity method investment in 
BioCision included as a part of the non-cash consideration for an acquisition 
of Cool Lab. Please refer to "Results of Operations" section below for a 
detailed discussion of our financial results for the nine months ended June 30, 
2017 compared to the nine months ended June 30, 2016.

Cash Flows and Liquidity- Cash and cash equivalents and marketable securities 
were $119.7 million at June 30, 2017 as compared to $91.2 million at September 
30, 2016. The increase in cash and cash equivalents and marketable securities 
of $28.4 million was primarily attributable to cash inflows of $61.4 million 
generated from our operating activities, partially offset by cash outflows 
related to dividend payments of $20.9 million made to our shareholders during 
the first nine months of fiscal year 2017, cash payments related to 
acquisitions of $5.3 million which included $4.8 million for the acquisition of 
Cool Lab and $0.5 million for the settlement of Contact consideration, as well 
as capital expenditure payments of $6.8 million. Please refer to "Liquidity and 
Capital Resources" section below for a detailed discussion of our liquidity and 
changes in cash flows for the nine months ended June 30, 2017 compared to the 
nine months ended June 30, 2016.

Subsequent to June 30, 2017, we entered into an Asset Purchase Agreement with 
Pacific Bio-Material Management, Inc. (“PBMMI”) and Novare, LLC, a wholly owned 
subsidiary of PBMMI (collectively, the “Sellers”), pursuant to which we 
acquired substantially all of the assets and liabilities of the Sellers’ 
business related to providing storage, transportation, management, and cold 
chain logistics of biological materials.

RESULTS OF OPERATIONS

Three and Nine Months Ended June 30, 2017 Compared to Three and Nine Months 
Ended June 30, 2016

Revenue

We reported revenue of $181.7 million for the three months ended June 30, 2017, 
compared to $147.5 million for the corresponding period of the prior fiscal 
year, an increase of $34.2 million, or 23%. We reported revenue of $511.0 
million for the nine months ended June 30, 2017, compared to $402.8 million for 
the corresponding period of the prior fiscal year, an increase of $108.2 
million, or 27%. We reported revenue growth in both the Brooks Semiconductor 
Solutions Group segment and the Brooks Life Science Systems segment. The impact 
of changes in foreign currency exchange rates adversely affected revenue by 
$1.1 million and $3.1 million, respectively during the three and nine months 
ended June 30, 2017 when compared to the corresponding periods of the prior 
fiscal year.

Our Brooks Semiconductor Solutions Group segment reported revenue of $145.0 
million for the three months ended June 30, 2017 compared to $118.4 million for 
the corresponding period of the prior fiscal year. The increase of $26.5 
million, or 22%, reflects increases in cryogenic pump products, robotic 
automation products, contamination controls systems and services and related 
spare parts. Our Brooks Semiconductor Solutions Group segment reported revenue 
of $406.2 million for the nine months ended June 30, 2017 compared to $326.3 
million for the corresponding period of the prior fiscal year. The increase of 
$79.9 million, or 24%, reflects increases in contamination control systems, 
cryogenic pump products, and robotic automation products, partially offset by a 
decline in services and related spare parts. These increases include the 
favorable impact of changes in foreign currency exchange rates of $0.8 million 
during the nine months ended June 30, 2017. There was no such impact during the 
three months ended June 30, 2017. The revenue in our robotic automation 
products for the three and nine months ended June 30, 2017 includes increases 
in ongoing sales of robotic automation products, partially offset by declines 
of $2.6 million and $7.5 million, respectively, attributable to the expiration 
of certain patents that we licensed to third parties in exchange for agreed 
upon royalties and approximately $3.3 million and $12.5 million, respectively, 
from the exiting of an atmospheric robot distribution arrangement during the 
fourth quarter of fiscal year 2016 that we determined did not support our 
strategic objectives. The expiration of patents and the exiting of the robot 
distribution agreement are expected to have an impact of approximately $8.7 
million and $13.0 million, respectively, on our fiscal year 2017 revenue as 
compared to fiscal year 2016. The Semiconductor markets are cyclical, and often 
fluctuate significantly from quarter to quarter. Demand for our Brooks 
Semiconductor Solution Group products is affected by these cycles.

Our Brooks Life Science Systems segment reported revenue of $36.8 million for 
the three months ended June 30, 2017 compared to $29.1 million for the 
corresponding period of the prior fiscal year. The increase of $7.7 million, or 
26%, was primarily from increases in sample storage services, growth of 
automated storage systems, and the acquisition of Cool Lab, which contributed 
revenue of $1.1 million. Our Brooks Life Science Systems segment reported 
revenue of $104.8 million for the nine months ended June 30, 2017 compared to 
$76.4 million for the corresponding period of the prior fiscal year. The 
increase of $28.3 million, or 37%, was primarily from increases in sample 
storage services, automated storage systems and acquisition of Cool Lab, which 
contributed revenue of $2.5 million. The growth of our sample storage services 
revenue for the nine months ended June 30, 2017 was $15.7 million and reflects 
two incremental months of revenue amounting to $8.2 million from the 
acquisition of BioStorage on November 30, 2015. Brooks’ Life Science Systems 
revenue was adversely affected by foreign currency exchange rates which reduced 
revenue by $1.1 million and $3.9 million, respectively, during the three and 
nine months ended June 30, 2017 as compared to the corresponding period of the 
prior fiscal year.

Revenue generated outside the United States amounted to $111.7 million, or 62% 
of total revenue, for the three months ended June 30, 2017 compared to $96.4 
million, or 65% of total revenue, for the corresponding period of the prior 
fiscal year. Revenue generated outside the United States amounted to $338.1 
million, or 66% of total revenue, for the nine months ended June 30, 2017 
compared to $251.7 million, or 63% of total revenue, for the corresponding 
period of the prior fiscal year.

Gross Margin

We reported gross margins of 39.4% for the three months ended June 30, 2017 
compared to 36.7% for the corresponding period of the prior fiscal year. Gross 
margin increased in the Brooks Semiconductor Solutions Group segment by 3.8 
percentage points and declined in the Brooks Life Science Systems segment by 
2.0 percentage points. We reported gross margins of 37.8% for the nine months 
ended June 30, 2017 compared to 35.1% for the corresponding period of the prior 
fiscal year. Gross margin increased in both the Brooks Semiconductor Solutions 
Group segment and Brooks Life Science Systems segment by 3.0 points and 1.1 
percentage points, respectively. Cost of revenue for the three and nine months 
ended June 30, 2017 included $1.1 million and $3.1 million, respectively, of 
charges for amortization related to completed technology as compared to $1.1 
million and $3.1 million, respectively, incurred during the corresponding 
periods of the prior fiscal year. Cost of revenue for the three and nine months 
ended June 30, 2017 also included $0.1 million and $0.5 million, respectively, 
of charges related to the sale of inventory obtained in acquisitions to which a 
step-up in value was applied in purchase accounting. Such charges amounted to 
$0.1 million and $0.5 million, respectively, for the three and nine months 
ended June 30, 2016.

Our Brooks Semiconductor Solutions Group segment reported gross margins of 
40.1% for the three months ended June 30, 2017 as compared to 36.2% for the 
corresponding period of the prior fiscal year. Product margins increased 2.2 
percentage points driven by improved operating leverage from higher revenue and 
the outcome of product cost optimization efforts, partially offset by adverse 
mix. Service margins increased 11.6 percentage points driven primarily by lower 
material costs for pump and robot repair and a lower cost structure due to 
improved field service productivity. Our Brooks Semiconductor Solutions Group 
segment reported gross margins of 38.1% for the nine months ended June 30, 2017 
as compared to 35.1% for the corresponding period of the prior fiscal year. 
Product margins increased 2.1 percentage points driven by improved operating 
leverage from higher revenue and the outcome of product cost optimization 
efforts, partially offset by adverse mix. Service margins increased 1.7 
percentage points driven by lower material costs for pump and robot repair as 
well as higher field service productivity, partially offset by higher excess 
and obsolescence costs. The change in mix of revenue between products and 
services was favorable to this segment’s margins by 1.0 percentage points. Cost 
of revenue during the three and nine months ended June 30, 2017 included $0.6 
million and $1.9 million, respectively, of amortization related to completed 
technology compared to $0.7 million and $2.0 million, respectively, for the 
corresponding periods of the prior fiscal year. Cost of revenue for the nine 
months ended June 30, 2017 also included $0.1 million of charges related to the 
sale of inventories obtained in acquisitions to which a step-up in value was 
applied in purchase accounting. Such charges amounted to $0.1 million and $0.4 
million, respectively, for the three and nine months ended June 30, 2016. 
Restructuring actions initiated prior to fiscal year 2017 are expected to 
result in aggregate cost of revenue reductions of approximately $6.1 million on 
an annual pretax basis when the savings fully take effect. We began realizing a 
portion of the cost savings in fiscal year 2016, and such savings amounted to a 
cumulative aggregate amount of approximately $5.6 million from inception 
through June 30, 2017, of which $1.4 million and $3.9 million, respectively, 
were realized during the three and nine months ended June 30, 2017. Based on 
revenue levels from fiscal year 2016, these savings are expected to improve 
gross margins by approximately 1.3 percentage points for the Brooks 
Semiconductor Solutions Group segment once the full savings are realized. 
Restructuring actions initiated during fiscal year 2017 are expected to result 
in aggregate cost of revenue reductions of approximately $1.9 million on an 
annual pretax basis when the savings fully take effect. Please refer to the 
"Restructuring Charges" section below for further information on the 
restructuring actions initiated prior to fiscal year 2017.

Our Brooks Life Science Systems segment reported gross margins of 36.7% for the 
three months ended June 30, 2017 as compared to 38.7% for the corresponding 
period of the prior fiscal year. The decrease was a result of increased 
expenses supporting the transition to in-sourcing of manufacturing from a 
contract provider to our Manchester location, expenses related to the 
consolidation of our Cool Labs operations, and revenue mix. Our Brooks Life 
Science Systems segment reported gross margins of 36.4% for the nine months 
ended June 30, 2017 as compared to 35.3% for the corresponding period of the 
prior fiscal year. The increase was driven by improved cost management on large 
stores projects and volume leverage driven by organic revenue growth, partially 
offset by increased expenses supporting the transition to in-sourcing of 
manufacturing from a contract provider to our Manchester location and expenses 
related to the consolidation of our Cool Labs operations. Cost of revenue 
during the three and nine months ended June 30, 2017 included $0.4 million and 
$1.2 million, respectively, of amortization related to completed technology as 
compared to $0.4 million and $1.1 million, respectively, for the corresponding 
periods of the prior fiscal year. Cost of revenue during the three and nine 
months ended June 30, 2017 also included $0.1 million and $0.4 million, 
respectively, of charges related to the sale of inventories obtained in 
acquisitions to which a step-up in value was applied in purchase accounting. 
Restructuring actions initiated prior to fiscal year 2017 are expected to 
result in aggregate cost of revenue reductions of approximately $1.0 million on 
an annual pretax basis when the savings fully take effect. We began realizing a 
portion of the cost savings in fiscal year 2016, and such savings amounted to a 
cumulative aggregate amount of approximately $1.1 million from inception 
through June 30, 2017, of which $0.3 million and $0.8 million, respectively, 
were realized during the three and nine months ended June 30, 2017. Based on 
revenue levels from fiscal year 2016, these savings are expected to improve 
gross margins by approximately 0.9 percentage points for the Brooks Life 
Science Systems segment once the full savings are realized. Please refer to the 
"Restructuring Charges" section below for further information on the 
restructuring actions initiated prior to fiscal year 2017.

Research and Development

Research and development expenses were $12.0 million and $34.1 million, 
respectively, during the three and nine months ended June 30, 2017 as compared 
to $12.8 million and $39.2 million, respectively, during the corresponding 
periods of the prior fiscal year. The decrease of $0.9 million during the three 
months ended June 30, 2017 as compared to the three months ended June 30, 2016 
is primarily attributable expense reductions within Brooks Life Sciences System 
segment. The decrease of $5.1 million during the nine months ended June 30, 
2017 as compared to the nine months ended June 30, 2016 reflects expense 
reductions of $3.1 million within Brooks Semiconductor Solutions Group segment 
and $2.0 million within the Brooks Life Sciences System segment. Lower research 
and development expenses during the three and nine months ended June 30, 2017 
as compared to the three and nine months ended June 30, 2016 were primarily 
attributable to the restructured central operations of research and 
development, and the progression of certain projects from the development stage 
to market, which has resulted in lower project spending.

Restructuring actions initiated prior to fiscal year 2017 are expected to 
reduce research and development expenses by approximately $3.9 million on an 
annual pretax cost basis once the full savings are realized. We began realizing 
a portion of the cost savings in fiscal year 2016, and such savings amounted to 
a cumulative aggregate amount of approximately $4.1 million from inception 
through June 30, 2017, of which $1.3 million was realized prior to fiscal year 
2017, and $1.0 million and $2.8 million, respectively, was realized during the 
three and nine months ended June 30, 2017. Please refer to the "Restructuring 
Charges" section below for further information on the restructuring actions 
initiated prior to fiscal year 2017.

Selling, General and Administrative

Selling, general and administrative expenses were $40.0 million for the three 
months ended June 30, 2017 as compared to $31.9 million for the corresponding 
period of the prior fiscal year. The increase of $8.2 million was attributable 
to: (i) higher merger costs of $3.6 million, which amounted to $3.7 million and 
$0.1 million, respectively, during the three months ended June 30, 2017 and 
2016, (ii) higher employee-related costs of $2.4 million, (iii) higher 
stock-based compensation expense of $2.2 million, and (iv) higher amortization 
expense of $0.5 million, which related primarily to customer relationship 
intangibles and amounted to $3.3 million during the three months ended June 30, 
2017 as compared to $2.8 million during the three months ended June 30, 2016. 
These increases were partially offset by lower depreciation expense of $0.9 
million for information technology systems.

Selling, general and administrative expenses were $109.5 million for the nine 
months ended June 30, 2017 as compared to $98.7 million for the corresponding 
period of the prior fiscal year. The increase of $10.8 million was attributable 
to: (i) higher stock-based compensation expense of $3.1 million, (ii) higher 
employee-related costs of $2.9 million, (iii) higher merger costs of $2.7 
million, which amounted to $6.0 million and $3.3 million, respectively, during 
the nine months ended June 30, 2017 and 2016, (iv) higher amortization expense 
of $1.6 million, which related primarily to customer relationship intangibles 
and amounted to $9.6 million during the nine months ended June 30, 2017 as 
compared to $8.1 million during the nine months ended June 30, 2016, and (v) 
higher selling, general and administrative expenses of $1.3 million as a result 
of acquisitions made since the beginning of the prior fiscal year. These 
increases were partially offset by lower depreciation expense of $3.4 million 
for information technology systems.

Restructuring actions initiated prior to fiscal year 2017 are expected to 
reduce selling, general and administrative expenses by approximately $10.1 
million on an annual pretax cost basis once the full savings are realized. We 
began realizing a portion of the cost savings beginning in fiscal year 2016, 
and such savings amounted to a cumulative aggregate amount of approximately 
$12.0 million from inception through June 30, 2017, of which $4.7 million was 
realized prior to fiscal year 2017, and $2.5 million and $7.3 million, 
respectively, was realized during the three and nine months ended June 30, 
2017.

Restructuring Charges

Comparison of the Three Months Ended June 30, 2017 and 2016

During the three months ended June 30, 2017, we recorded restructuring charges 
of $0.8 million as compared to $1.0 million during the corresponding period of 
the prior fiscal year. The decrease of $0.2 million was attributable to the 
impact of restructuring actions initiated during fiscal years ended June 30, 
2017 and 2016, as described below.

Restructuring Charges Incurred During the Three Months Ended June 30, 2017

During the three months ended June 30, 2017, we recognized restructuring 
charges of $0.8 million which related to severance attributable primarily to 
the Brooks Semiconductor Solutions Group segment. Such costs included $0.6 
million of charges related to the actions initiated during fiscal year 2017 and 
$0.2 million of charges related to the actions initiated prior to fiscal year 
2017.

During fiscal year 2017, we initiated a restructuring action to streamline 
service operations in order to optimize the cost structure and improve 
productivity. Total severance costs expected to be incurred in connection with 
this action are $1.5 million, of which $0.9 million were recognized prior to 
the third quarter of fiscal year 2017 and $0.6 million recognized during the 
three months ended June 30, 2017. This restructuring action has been 
substantially completed as of June 30, 2017 and is expected to result in 
approximately $1.9 million in cost of revenue reductions. Accrued restructuring 
costs related to this action were $0.8 million at June 30, 2017 and are 
expected to be paid within the next twelve months from cash flows generated 
from operating activities. Prior to fiscal year 2017, we initiated a 
restructuring action within the Brooks Semiconductor Solutions Group segment to 
consolidate our Jena, Germany repair facility into the Chelmsford, 
Massachusetts repair operation as a part of our strategy to reduce global 
footprint and streamline the cost structure. Total severance costs expected to 
be incurred in connection with this action are $2.5 million, of which: (i) $1.8 
million were recognized prior to fiscal year 2017, (ii) $0.5 million were 
recognized during fiscal year 2017, including $0.2 million during the three 
months ended June 30, 2017, and (iii) $0.2 million are expected to be 
recognized in future periods. This restructuring action has been substantially 
completed as of June 30, 2017 and is expected to result in approximately $1.7 
million in annual pre-tax cost savings, including $1.4 million of cost of 
revenue reductions and $0.2 million of selling, general and administrative 
expense reductions. We began realizing cost savings for this action starting 
with the second quarter of fiscal year 2017 when certain employees impacted by 
this action ceased providing their services. Such cost savings amounted to $0.3 
million and $0.5 million, respectively, in cost of revenue reductions during 
the three and nine months ended June 30, 2017. Accrued restructuring costs 
related to this action were $0.9 million at June 30, 2017 and are expected to 
be paid within the next twelve months from cash flows generated from operating 
activities.

Restructuring Charges Incurred During the Three Months Ended June 30, 2016

During the three months ended June 30, 2016, we recorded restructuring charges 
of $1.0 million related to severance which were attributable to actions 
initiated prior to the third quarter of fiscal year 2016. Such charges were 
comprised of $0.3 million of costs attributable to the Brooks Life Science 
Systems segment and $0.6 million of costs related to the Company-wide 
restructuring actions, as described above. The Brooks Life Science Systems 
restructuring initiatives included several actions that were primarily related 
to streamlining the segment’s management structure, integrating BioStorage, and 
the closure of the segment’s Spokane, Washington facility in March 2016. Total 
severance costs incurred in connection with these initiatives were $2.8 
million, of which $2.4 million was recognized prior to the third quarter of 
fiscal year 2016, and $0.3 million were recognized during the three months 
ended June 30, 2016. There were no accrued restructuring costs from these 
initiatives at June 30, 2017.

Comparison of the Nine Months Ended June 30, 2017 and 2016

During the nine months ended June 30, 2017, we recorded restructuring charges 
of $2.7 million as compared to $9.8 million during the corresponding period of 
the prior fiscal year. The decrease of $7.1 million was attributable to the 
impact of restructuring actions initiated during fiscal years ended June 30, 
2017 and 2016, as described below.

Restructuring Charges Incurred During the Nine Months Ended June 30, 2017

During the nine months ended June 30, 2017, we recorded restructuring charges 
of $2.7 million related to severance, of which $2.2 million were attributable 
to the Brooks Semiconductor Solutions Group segment, $0.2 million were 
attributable to the Brooks Life Science Systems segment and $0.3 million were 
attributable to the Company-wide restructuring action initiated prior to fiscal 
year 2017.

The restructuring charges of $2.2 million attributable to the Brooks 
Semiconductor Solutions Group segment consisted of $1.5 million of charges 
related to the actions initiated during fiscal year 2017 to streamline service 
operations, as described above, and $0.7 million of charges related to the 
actions initiated prior to fiscal year 2017. Restructuring charges of $0.7 
million consisted of $0.5 million attributable to the consolidation of the 
Jena, Germany repair facility into the Chelmsford, Massachusetts repair 
operation, as described above, and $0.2 million related to the integration of 
Contact after its acquisition, including the closure and transfer of its 
Mistelgau, Germany manufacturing operations to a contract manufacturer, and 
other cost reductions to improve profitability and competitiveness. Total 
restructuring costs incurred in connection with this action are approximately 
$3.2 million, of which approximately $3.0 million were recognized prior to 
fiscal year 2017 and $0.2 million were recognized during the nine months ended 
June 30, 2017. This restructuring action was substantially completed as of June 
30, 2017 and is not expected to result in any significant additional 
restructuring charges in future periods. The action is expected to result in 
approximately $2.5 million in annual pre-tax cost savings, including $0.3 
million of cost of revenue reductions, $1.4 million of research and development 
cost reductions, as well as $0.8 million of selling, general and administrative 
expense reductions. Total cost savings realized as a result of this 
restructuring action amounted to $2.6 million, of which $1.0 million were 
realized prior to fiscal year 2017 and $0.6 million and $1.7 million, 
respectively, were realized during the three and nine months ended June 30, 
2017. There were no accrued restructuring costs from this action at June 30, 
2017.

Prior to fiscal year 2017, we initiated a restructuring action to streamline 
our business operations as part of a Company-wide initiative to improve 
profitability and competitiveness which is expected to benefit both segments. 
Total severance costs incurred in connection with this action were $6.1 
million, of which $5.8 million were recognized prior to fiscal year 2017 and 
$0.3 million were recognized during the nine months ended June, 30, 2017. 
Severance costs incurred in connection with this action were attributable to 
the elimination of positions across the Company, including certain senior 
management positions. The action is expected to result in approximately $13.1 
million in annual pre-tax cost savings, including $4.3 million of cost of 
revenue reductions, $2.6 million of research and development cost reductions, 
as well as $6.2 million of selling, general and administrative expense 
reductions. This action was substantially completed as of June 30, 2017 and is 
not expected to result in any additional restructuring charges in future 
periods. Total cost savings realized as a result of this restructuring action 
amounted to $15.6 million, of which $5.8 million were realized prior to fiscal 
year 2017 and $3.3 million and $9.8 million, respectively, were realized during 
the three and nine months ended June 30, 2017. There were no accrued 
restructuring costs related to this action at June 30, 2017.

Restructuring Charges Incurred During the Nine Months Ended June 30, 2016

During the nine months ended June 30, 2016, we recorded restructuring charges 
of $9.8 million related to severance, which consisted of $8.5 million of 
charges related to restructuring actions initiated during fiscal year 2016 and 
$1.2 million of charges related to restructuring actions initiated prior to 
fiscal year 2016. The charges of $8.5 million were comprised primarily of $2.8 
million of costs attributable to the restructuring initiatives within the 
Brooks Life Science Systems segment and $5.8 million of costs related to the 
Company-wide restructuring action, as described above. The charges of $1.2 
million were attributable to the Brooks Semiconductor Solutions Group segment 
and related to the integration of Contact, as well as closure and transfer of 
the Mistelgau, Germany manufacturing operations to a contract manufacturer, as 
described above.

Non-Operating Income (Losses)

Gain on Settlement of Equity Method Investment- During the nine months ended 
June 30, 2017, we recognized a gain of $1.8 million on the settlement of the 
equity method investment in BioCision which was included as a part of the 
non-cash consideration for an acquisition of Cool Lab. For additional 
information on this transaction, please refer to Note 4, "Acquisitions", and 
Note 6, "Equity Method Investments", in the Notes to the unaudited Consolidated 
Financial Statements included in Item 1 "Consolidated Financial Statements" of 
this Form 10-Q.

Other loss, net. During the three months ended June 30, 2017 and 2016, other 
loss, net was $0.3 million and $0.1 million respectively. The increase of $0.2 
million was primarily attributable to an increase in foreign currency exchange 
losses during the three months ended June 30, 2017 as compared to the 
corresponding period of the prior fiscal year. During the nine months ended 
June 30, 2017 and 2016, other loss, net was $0.8 million and $0.3 million, 
respectively. The increase of $0.6 million was primarily attributable to higher 
foreign currency exchange losses of $0.2 million recognized during the nine 
months ended June 30, 2017 as compared to the corresponding period of the prior 
fiscal year. Additionally, we recognized higher losses of $0.3 million during 
the first nine months of fiscal year 2017 as compared to the corresponding 
period of the prior fiscal year related to fair value measurement of 
convertible debt securities in BioCision. For additional information on this 
transaction, please refer to Note 4, "Acquisitions", and Note 6, "Equity Method 
Investments", in the Notes to the unaudited Consolidated Financial Statements 
included in Item 1 "Consolidated Financial Statements" of this Form 10-Q.

Income Tax Provision

During the three and nine months ended June 30, 2017, we recorded an income tax 
provision of $3.7 million and $9.9 million, respectively, which was driven 
primarily by foreign income. Tax provision recorded during the nine months 
ended June 30, 2017 was partially offset by $0.9 million of tax benefits 
related to the reduction of reserves for unrecognized tax benefits resulting 
from the expiration of statutes of limitations.

During the three and nine months ended June 30, 2016, we recorded an income tax 
provision of $0.2 million and $75.1 million, respectively. The income tax 
provision of $0.2 million recorded during the third quarter of fiscal 2016 was 
primarily driven by global income generated during the quarter, partially 
offset by $0.3 million of tax benefits related to the reduction of reserves for 
unrecognized tax benefits resulting from the expiration of statues of 
limitations. The tax provision of $75.1 million during the nine months ended 
June 30, 2016 was driven primarily by the change in a valuation allowance 
against U.S. net deferred tax assets recognized during the second quarter of 
fiscal year 2016. Partially offsetting the valuation allowance provision were 
benefits related to pre-tax losses in the U.S., the reinstatement of the U.S. 
research and development tax credit retroactive to January 1, 2015, and 
reductions of reserves for unrecognized tax benefits resulting from the 
expiration of the statute of limitations. For additional discussion of the 
calculation of our income tax liabilities and further information on the 
valuation allowance, please refer to Note 8, "Income Taxes", in the Notes to 
the unaudited Consolidated Financial Statements included in Item 1 
"Consolidated Financial Statements" of this Form 10-Q.

Equity in Earnings of Equity Method Investments

During the three and nine months ended June 30, 2017, we recorded income of 
$2.5 million and $7.2 million, respectively, from our equity method investments 
as compared to $0.4 million and $1.2 million, respectively, during the 
corresponding periods of the prior fiscal year. The increases in income of $2.2 
million and $6.0 million, respectively, were primarily attributable to 
increases of $1.9 million and $5.8 million, respectively, in income from ULVAC 
Cryogenics, Inc., or UCI, generated during the three and nine months ended June 
30, 2017 as compared to the corresponding periods of the prior fiscal year.

Additionally, we incurred losses of $0.5 million from our investment in 
BioCision during the nine months ended June 30, 2017 compared to $0.7 million 
during the corresponding period of prior fiscal year. Our investment in 
BioCision was settled during the first quarter of fiscal year 2017 as a part of 
the non-cash consideration for the acquisition of Cool Lab on November 28, 
2016. We have traditionally recorded the income and losses related to the 
equity method investment in BioCision one quarter in arrears. During the nine 
months ended June 30, 2017, we recorded two additional months of activity in 
the carrying value of the investment as a result of its settlement. We deemed 
the amount of $0.2 million related to two additional months of activity to be 
insignificant. For additional information on this transaction, please refer to 
Note 4, "Acquisitions", and Note 6, "Equity Method Investments", in the Notes 
to the unaudited Consolidated Financial Statements included in Item 1 
"Consolidated Financial Statements" of this Form 10-Q.

LIQUIDITY AND CAPITAL RESOURCES

A considerable portion of our revenue is dependent on the demand for 
semiconductor capital equipment, which historically has experienced periodic 
downturns. We believe that we have adequate resources to fund our currently 
planned working capital and capital expenditure requirements for the next 
twelve months. The cyclical nature of our served markets and uncertainty in the 
current global economic environment make it difficult for us to predict 
longer-term liquidity requirements with sufficient certainty. We may be unable 
to obtain any additional financing on terms favorable to us, if at all. If 
adequate funds are not available to us on acceptable terms or otherwise, we may 
be unable to successfully develop or enhance products and services, respond to 
competitive pressure or take advantage of acquisition opportunities, any of 
which could have a material adverse effect on our business, financial condition 
and operating results.

Our cash, cash equivalents and marketable securities were $119.7 million as of 
June 30, 2017. Our cash balances are held in numerous locations throughout the 
world, with a substantial majority of those amounts located outside of the 
United States. As of June 30, 2017, we had cash and cash equivalents of $117.1 
million, of which $71.0 million was held outside of the United States. If these 
funds are needed for our U.S. operations, we would be required to accrue tax 
liabilities to repatriate these funds. However, given the amount of our net 
operating loss carryovers in the United States, such repatriation will most 
likely not result in U.S. cash tax payments within the next twelve months. Our 
intent is to permanently reinvest these funds outside of the U.S. and our 
current operating plans do not demonstrate a need to repatriate these funds for 
our U.S. operations. We believe that our current cash balance, access to the 
revolving line of credit, as well as to debt and capital markets along with 
cash flows from operations will satisfy working capital, financing activities, 
and capital expenditure requirements for the next twelve months. We had 
marketable securities of $2.6 million and $6.1 million, respectively, as of 
June 30, 2017 and September 30, 2016. The decrease of $3.6 million was 
primarily attributable to the sale of marketable securities during the third 
quarter of fiscal year 2017 to finance the upcoming acquisition subsequent to 
June 30, 2017. For additional information on this transaction, please refer to 
Note 19, "Subsequent Events" in the Notes to the unaudited Consolidated 
Financial Statements included in Item 1 "Consolidated Financial Statements" of 
this Form 10-Q.

As of June 30, 2017, we had approximately $56.5 million available for borrowing 
under our line of credit with Wells Fargo Bank, N.A. discussed below. There 
were no amounts outstanding pursuant to the line of credit as of June 30, 2017 
and September 30, 2016. The amount of funds available for borrowing under the 
line of credit arrangement may fluctuate each period based on our borrowing 
base availability.

Overview of Cash Flows and Liquidity Nine Months Ended June 30, 2017 Compared 
to Nine Months Ended June 30, 2016

Overview

Cash and cash equivalents and marketable securities were $119.7 million at June 
30, 2017 as compared to $91.2 million at September 30, 2016. The increase in 
cash and cash equivalents and marketable securities of $28.4 million was 
primarily attributable to cash inflows of $61.4 million generated from our 
operating activities, partially offset by cash outflows related to dividend 
payments of $20.9 million made to our shareholders during the first nine months 
of fiscal year 2017, a cash payment of $5.3 million which included $4.8 million 
for the acquisition of Cool Lab and $0.5 million for the settlement of Contact 
consideration, as well as capital expenditure payments of $6.8 million.

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.

Cash flows provided by operating activities were $61.4 million during the nine 
months ended June 30, 2017 as compared to $16.1 million during the 
corresponding period of the prior fiscal year. The increase of $45.3 million in 
cash flows from operating activities was primarily attributable to the 
following factors:

During the nine months ended June 30, 2017 and 2016, we generated net income 
(loss) of $45.2 million and $(80.0) million, respectively, including the impact 
of non-cash related charges of $23.1 million and $100.5 million, respectively, 
which amounted to $68.3 million and $20.5 million, respectively. The non-cash 
charges are listed in the Consolidated Statements of Cash Flows and consist 
primarily of depreciation and amortization, stock-based compensation, 
undistributed earnings of equity method investments, deferred tax provision, as 
well as a gain on settlement of equity method investments. Please refer to the 
"Results of Operations" section above for a detailed discussion of our 
operating results during the nine months ended June 30, 2017 as compared to the 
nine months ended June 30, 2016. The increase in net income is primarily 
attributable to a lower income tax provision of $65.2 million due to the change 
in a valuation allowance against U.S. net deferred tax assets recognized during 
the nine months ended June 30, 2016, higher operating income of $52.9 million, 
higher income generated from our equity method investments of $6.0 million, as 
well as a gain of $1.8 million recognized on the settlement of the equity 
method investment in BioCision included as a part of the non-cash consideration 
for an acquisition of Cool Lab. ·

Our trade accounts receivable, inventories and trade accounts payable used 
$18.0 million in operating cash flows during the nine months ended June 30, 
2017 as compared to $0.3 million generated during the corresponding period of 
the prior fiscal year. The amount of cash flow generated from or used by the 
aggregate of trade accounts receivable, inventories and trade accounts payable 
depends upon how effectively we manage our working capital and can be 
significantly impacted by the timing of customer billings, cash collections and 
vendor payments made during the period, as well as the sales volume driven by 
customer demand. The unfavorable impact of $18.3 million was primarily 
attributable to accounts receivable which resulted in a use of cash of $14.6 
million for the first nine months of fiscal year 2017 compared to a source of 
cash of $2.9 million for the corresponding period of the prior fiscal year. The 
changes in accounts receivable are primarily attributable to the increased 
revenue, the timing of product shipments and the associated billings, as well 
as the timing of customer cash collections. Additionally, the increase in 
inventory balances resulted in a use of cash of $12.9 million during the first 
nine months of fiscal year 2017 as compared to a source of cash of $2.1 million 
for the corresponding period of the prior fiscal year. The increase in 
inventory is primarily to support increased customer demand for the Brooks 
Semiconductor Solutions Group segment and the Brooks Life Science Systems 
segment products during the nine months ended June 30, 2017. The unfavorable 
impacts associated with increased accounts receivable and inventory balances 
were partially offset by a favorable impact of $9.5 million related to an 
increase in accounts payable, which resulted in a source of cash during the 
first nine months of fiscal year 2017 compared to a use of cash of $4.7 million 
during the corresponding period of the prior fiscal year. The favorable impact 
of accounts payable is primarily attributable to an increase in inventory 
levels to support increased volumes and the timing of vendor payments. ·

The timing of payments for prepaid expenses and other assets collectively with 
accrued expenses and other liabilities used $6.7 million in operating cash 
flows during the nine months ended June 30, 2017 as compared to $11.8 million 
during the corresponding period of the prior fiscal year. The favorable impact 
of $5.1 million was primarily attributable to the timing of payments for income 
taxes for vested restricted stock units, as well as costs and other operating 
expenses that provided $13.5 million in cash inflows from operating activities. 
Such cash inflows were partially offset by cash payments of $7.9 million for 
restructuring liabilities. During fiscal year 2017, we initiated a 
restructuring action to streamline service operations in order to optimize the 
cost structure and improve productivity. Prior to fiscal year 2017, we 
initiated a restructuring action within the Brooks Semiconductor Solutions 
Group segment to consolidate our Jena, Germany repair facility into Chelmsford, 
Massachusetts repair operation as a part of our strategy to reduce global 
footprint and streamline the cost structure. Additionally, we initiated a 
restructuring action during fiscal year 2016 to streamline our business 
operations as part of a Company-wide initiative to improve profitability and 
competitiveness which benefited all segments. Accrued restructuring liabilities 
of $1.7 million at June 30, 2017 from these actions are expected to be paid 
within the next twelve months from cash flows generated from operating 
activities. These restructuring plans are expected to result in approximately 
$14.8 million of reduced annual cash spending.

Deferred revenue provided $17.9 million and $7.2 million, respectively, during 
the nine months ended June 30, 2017 and 2016. The favorable impact on our cash 
flows from operating activities in both periods was primarily attributable to 
billings and collections in advance of revenue recognition within our Brooks 
Life Science Systems segment.


Investing Activities

Cash flows from investing activities consist primarily of cash used for 
acquisitions, capital expenditures and purchases of marketable securities, as 
well as cash proceeds generated from sales and maturities of marketable 
securities.

Cash used in investing activities was $9.0 million during the nine months ended 
June 30, 2017 as compared to $10.4 million during the corresponding period of 
the prior fiscal year. Cash used in investing activities of $9.0 million during 
the first nine months of fiscal year 2017 included cash payments of $4.8 
million for the acquisition of Cool Lab and $0.5 million for the settlement of 
contingent consideration related to the acquisition of Contact, as well as $6.8 
million of capital expenditures. These uses of cash were partially offset by 
$3.6 million related to net proceeds from sales and maturities of marketable 
securities during the first nine months of fiscal year 2017.

Cash used in investing activities of $10.4 million during the nine months ended 
June 30, 2016 included primarily a cash payment of $125.5 million for the 
acquisition of BioStorage, $9.4 million of capital expenditures and $1.5 
million of cash disbursements for a loan receivable. These uses of cash were 
partially offset by $126.5 million related to net proceeds from sales and 
maturities of marketable securities.

Capital expenditures are made primarily for increasing capacity, replacing 
equipment, supporting new product development and improving information 
technology infrastructure. Capital expenditures were $6.8 million during the 
first nine months of fiscal year 2017 as compared to $9.4 million during the 
corresponding period of the prior fiscal year. The decrease of $2.6 million was 
primarily attributable to investments made in our information technology assets 
and construction of a new clean room during the first nine months of fiscal 
year 2016.

Financing Activities

Cash used in financing activities was $20.0 million during the nine months 
ended June 30, 2017 as compared to $20.2 million during the corresponding 
period of the prior fiscal year. Cash used in financing activities included 
primarily cash dividend payments of $20.9 million and $20.6 million, 
respectively, made during the nine months ended June 30, 2017 and 2016.

Capital Resources

Line of Credit Facility

We maintain a five-year senior secured revolving line of credit, or line of 
credit, with Wells Fargo Bank, N.A., or Wells Fargo, that provides for up to 
$75.0 million of borrowing capacity, subject to borrowing base availability, as 
defined in the agreement governing the line of credit. As of June 30, 2017, we 
had approximately $56.5 million available for borrowing under the line of 
credit. There were no amounts outstanding under the line of credit as of June 
30, 2017 and September 30, 2016. During the three and nine months ended June 
30, 2017, we incurred less than $0.1 million and $0.1 million, respectively, in 
fees related to the unused portion of the line of credit commitment amount. We 
incurred less than $0.1 million in such fees during each of the three and nine 
months ended June 30, 2016. The line of credit contains certain customary 
representations and warranties, a financial covenant, affirmative and negative 
covenants, as well as events of default. The Company was in compliance with the 
line of credit covenants as of June 30, 2017 and September 30, 2016. We believe 
we will be able to generate sufficient cash in the United States and foreign 
jurisdictions to fund our future operating costs. We secured the revolving line 
of credit as an additional assurance for maintaining liquidity in the United 
States during potentially severe downturns of the cyclical semiconductor 
market, as well as for strategic investments and acquisitions. Please refer to 
Note 11, "Line of Credit" in the Notes to our audited Consolidated Financial 
Statements included in Part II, Item 8 “Financial Statements and Supplementary 
Data” in our Annual Report on Form 10-K for further information on the line of 
credit arrangement.

Shelf Registration Statement

On July 27, 2016, we filed a registration statement on Form S-3 with the SEC to 
sell securities, including common stock, preferred stock, warrants, debt 
securities, depository shares, purchase contracts and purchase units in amounts 
to be determined at the time of an offering. Any such offering, if it does 
occur, may happen in one or more transactions. The specific terms of any 
securities to be sold will be described in supplemental filings with the SEC. 
This registration statement will expire on July 27, 2019.

Employee Stock Purchase Plan

Approximately 877,427 shares of common stock issued under our 1995 Employee 
Stock Purchase Plan, or ESPP, for the purchases made between January 2013 and 
July 2016, at purchase prices ranging from $7.79 to $9.01 per share, were 
inadvertently not registered under federal securities laws. Based on our 
current stock price, we do not expect any ESPP participants who still hold 
shares purchased within the last year to seek rescission. However if we 
determine that ESPP participants are likely to seek rescission in the future, 
we may make a registered rescission offer to repurchase the shares issued under 
the ESPP during fiscal 2016 to the extent they continue to be held by the 
original purchasers. If holders of all of these shares seek to rescind their 
purchases, we could be required to make aggregate payments of up to 
approximately $0.3 million, which includes estimated statutory interest. As of 
June 30, 2017, there were approximately 36,531 shares of common stock issued 
under the ESPP and held by the original purchasers of such shares that may be 
subject to these rescission rights which expire by statute of limitations on 
July 31, 2017.

Dividends

On August 1, 2017, our Board of Directors approved a cash dividend of $0.10 per 
share of our common stock. The total dividend of approximately $7.0 million 
will be paid on September 29, 2017 to shareholders of record at the close of 
business on September 8, 2017. Dividends are declared at the discretion of our 
Board of Directors and depend on actual cash flow from operations, our 
financial condition, capital requirements and any other factors our Board of 
Directors may consider relevant. We intend to pay quarterly cash dividends in 
the future; however, the amount and timing of these dividends may be impacted 
by the cyclical nature of certain markets we serve. We may reduce, delay or 
cancel a quarterly cash dividend based on the severity of a cyclical downturn.


Share Repurchase Program

On September 29, 2015, our Board of Directors approved a share repurchase 
program for up to $50 million worth of our common stock. The timing and amount 
of any shares repurchased will be based on market and business conditions, 
legal requirements and other factors and may be commenced or suspended at any 
time at our discretion. There were no shares repurchased under this program 
during the six months ended June 30, 2017.

Contractual Obligations and Requirements

Our inventory purchase commitments were $112.8 million and $101.4 million, 
respectively, at June 30, 2017 and September 30, 2016. Except as disclosed 
below regarding letters of credit and operating leases, there have been no 
material changes to our contractual obligations set forth under the heading 
“Management’s Discussion and Analysis of Financial Condition and Results of 
Operations - Liquidity and Capital Resources” in the 2016 Annual Report on Form 
10-K.

During the second quarter of fiscal year 2017, we entered into a new lease 
agreement for the existing 85,000 square feet of space in Indianapolis, Indiana 
which accommodates our sample storage, sales and support functions for the 
Brooks Life Science Systems segment. The original lease expires in July 2017. 
The new lease for such space commences on August 1, 2017 and expires on 
September 30, 2023. Additionally, we executed another new lease agreement for 
an additional 13,000 square feet of space within the aforementioned facility 
which commences on March 1, 2019 and expires on September 30, 2023. The new 
leases may be extended at the Company’s option for three additional terms of 
five years each subject to the terms and conditions of the lease. The 
non-cancelable obligations under the new leases total $2.4 million. Capital 
expenditure commitments related to these leases amount to $2.4 million as of 
June 30, 2017.

At June 30, 2017, we had approximately $3.4 million of letters of credit 
outstanding related primarily to customer advances and other performance 
obligations. These arrangements guarantee the refund of advance payments 
received from our customers in the event that the product is not delivered or 
warranty obligations are not fulfilled in accordance with the contract terms. 
These obligations could be called by the beneficiaries at any time before the 
expiration date of the particular letter of credit if we fail to meet certain 
contractual requirements. None of these obligations were called during the nine 
months ended June 30, 2017, and we currently do not anticipate any of these 
obligations to be called in the near future.

Off-Balance Sheet Arrangements

As of June 30, 2017, we did not have any off-balance sheet arrangements, as 
defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a variety of market risks, including changes in interest 
rates affecting the return on our cash and cash equivalents, short-term and 
long-term investments and fluctuations in foreign currency exchange rates.

Interest Rate Exposure

Our cash and cash equivalents consist principally of money market securities 
that are short-term in nature. Our short-term and long-term investments consist 
mostly of highly rated corporate debt securities, U.S. Treasury securities, and 
obligations of U.S. Government Agencies and other municipalities. At June 30, 
2017, there were no marketable securities in net unrealized loss position which 
were included in "Accumulated Other Comprehensive Income" in the unaudited 
Consolidated Balance Sheets included elsewhere in this Quarterly Report on Form 
10-Q. A hypothetical 100 basis point change in interest rates would result in a 
change of less than $0.1 million in interest income earned during each of the 
nine months ended June 30, 2017 and 2016.

Currency Rate Exposure

We have transactions and balances denominated in currencies other than the U.S. 
dollar. Most of these transactions or balances are denominated in Euros, 
British Pounds and a variety of Asian currencies. Sales in currencies other 
than the U.S. dollar were approximately 35% and 34% of our total sales, 
respectively, during the nine months ended June 30, 2017 and 2016. These sales 
were made primarily by our foreign subsidiaries, which have cost structures 
that substantially align with the currency of sale.

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. Such balances were approximately $53.4 million and $34.9 million, 
respectively, at June 30, 2017 and September 30, 2016, and related to the Euro, 
British Pound and a variety of Asian currencies. 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. We also 
utilize forward contracts to mitigate our exposures to currency movement. We 
incurred foreign currency losses of $1.6 million and $1.5 million, 
respectively, during the nine months ended June 30, 2017 and 2016, which 
related to the currency fluctuation on these balances between the time the 
transaction occurred and the ultimate settlement of the transaction. A 
hypothetical 10% change in foreign exchange rates at June 30, 2017 and 2016 
would result in an approximate change of $0.7 million in our net income (loss) 
during each of the nine months ended June 30, 2017 and 2016.