Bruker Corporation (NASDAQ:BRKR) today reported financial results
for the first quarter 2008, ended on March 31, 2008. On February
26, 2008, Bruker BioSciences Corporation closed its acquisition of
the Bruker BioSpin Group, and renamed itself Bruker Corporation.
Under US GAAP, this transaction is accounted for as an acquisition
of businesses under common control, and as a result all one-time
transaction costs are expensed in the period in which they are
incurred, rather than being added to goodwill. In addition,
expenses incurred subsequent to the consummation of the
acquisition, such as interest expenses incurred on acquisition
related debt, are not reflected in the financial results of periods
prior to the date of the acquisition, as they typically would be in
pro-forma financials in acquisitions of unrelated parties. After
the closing of the transaction all historical financial statements
are required to be restated by combining the historical
consolidated financial statements of Bruker BioSciences Corporation
with those of the Bruker BioSpin Group. Accordingly, the financial
results for the first quarters of 2008 and of 2007 included within
this release have been restated to combine the historical
consolidated financial statements of Bruker BioSciences Corporation
with those of the Bruker BioSpin Group for both full quarters. In
the first quarter of 2008, revenue increased 14.9% to $238.4
million, compared to revenue of $207.5 million in the first quarter
of 2007. Foreign currency translation contributed 9.9% to this
revenue growth rate. GAAP operating income for the first quarter of
2008 was $15.9 million, compared to $19.7 million in the first
quarter of 2007. Included in GAAP operating income in the first
quarter of 2008 were acquisition related charges of $5.8 million,
which, if excluded, would result in a 10.2% increase in operating
income over the first quarter of 2007. GAAP diluted earnings (loss)
per share were ($0.00) in the first quarter of 2008, compared to
$0.09 in the first quarter of 2007. Included in GAAP EPS for the
first quarter of 2008 were previously announced foreign exchange
losses of ($0.06) per diluted share, Bruker BioSpin acquisition
related expenses of ($0.04) per diluted share, and interest expense
on acquisition related debt of ($0.01) per diluted share, with a
cumulative effect of ($0.10) per diluted share. For comparison,
included in net income for the first quarter of 2007 were foreign
exchange losses of ($0.7 million), or ($0.00) per diluted share,
and there were no acquisition related charges or interest expense.
Cash flow from operations in the first quarter of 2008 was $22.3
million, compared to $21.7 million in the first quarter of 2007. As
of March 31, 2008, Bruker Corporation had a net debt position of
$101 million. �The acquisition of the Bruker BioSpin Group in
February was a transformational event for our company, and we are
very excited about the introduction of several novel and truly
innovative products and solutions at Pittcon 2008,� said Frank
Laukien, President and CEO. �We are in the early stages of
integrating the new combined Bruker group. Despite uncertain
economic conditions we expect in the medium term to realize revenue
synergies through cross-selling opportunities and integrated
solutions development, and we are also planning further gross
margin improvements and expense leveraging through sourcing
efficiencies, shared functions and operational streamlining.�
William Knight, Chief Financial Officer, commented: �In the first
quarter our operational performance was below our internal goals,
but within the range of quarterly fluctuations that we expect to
see with the combined new business. Our bottom line was negatively
impacted by foreign exchange losses, as well as by acquisition
related charges and interest expense, which resulted in a reduction
in our earnings by ($0.10) per diluted share. We are working to
reduce interest expenses and the effects of foreign currency
fluctuations in the future, and as part of these initiatives we
have already repaid approximately $55 million of the debt incurred
to acquire the Bruker BioSpin Group in April, and have plans in
place to repay an additional $80 million this week.� USE OF
NON-GAAP FINANCIAL MEASURES In addition to the financial measures
prepared in accordance with generally accepted accounting
principles (GAAP), we use certain non-GAAP financial measures,
including adjusted operating income and adjusted EPS. Adjusted
operating income excludes acquisition related charges and adjusted
EPS excludes acquisition related charges, interest expense on
acquisition related debt, and foreign exchange losses. We believe
the inclusion of these non-GAAP measures helps investors to gain a
better understanding of our core operating results and future
prospects, consistent with how management measures and forecasts
the Company�s performance, especially when comparing such results
to previous periods or forecasts. However, the non-GAAP financial
measures included in this press release are not meant to be a
better presentation or a substitute for results prepared in
accordance with GAAP. EARNINGS CONFERENCE CALL Bruker Corporation
will host an operator-assisted earnings conference call at 8 a.m.
Eastern Daylight Time on Monday, May 5, 2008. To listen to the
webcast, investors can go to www.bruker.com and click on the live
web broadcast symbol. The webcast will be available through the
Company web site for 30 days. Investors can also listen and
participate on the telephone in the US and Canada by calling
888-339-2688, or 617-847-3007 outside the US and Canada. Investors
should refer to the Bruker Corporation Earnings Call. A telephone
replay of the conference call will be available one hour after the
conference call by dialing 888-286-8010 in the US and Canada, or
617-801-6888 outside the US and Canada, and then entering replay
pass code 94254806. CAUTIONARY STATEMENT Any statements contained
in this press release that do not describe historical facts may
constitute forward-looking statements as that term is defined in
the Private Securities Litigation Reform Act of 1995. Any
forward-looking statements contained herein are based on current
expectations, but are subject to a number of risks and
uncertainties. The factors that could cause actual future results
to differ materially from current expectations include, but are not
limited to, risks and uncertainties relating to the integration of
businesses we have acquired or may acquire in the future, changing
technologies, product development and market acceptance of our
products, the cost and pricing of our products, manufacturing,
competition, dependence on collaborative partners and key
suppliers, capital spending and government funding policies,
changes in governmental regulations, intellectual property rights,
litigation, and exposure to foreign currency fluctuations. These
and other factors are identified and described in more detail in
our filings with the SEC, including, without limitation, our annual
report on Form 10-K for the year ended December 31, 2007, our most
recent quarterly reports on Form 10-Q and our current reports on
Form 8-K. We disclaim any intent or obligation to update these
forward-looking statements other than as required by law. Bruker
Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in
thousands, except per share data) � � � � Three Months Ended March
31, � 2008 � � 2007 � � Product revenue $ 207,035 $ 181,609 Service
revenue 29,957 25,187 Other revenue � 1,444 � � 740 � Total revenue
238,436 207,536 � Cost of product revenue 104,901 96,649 Cost of
service revenue � 20,406 � � 16,339 � Total cost of revenue �
125,307 � � 112,988 � � Gross profit margin 113,129 94,548 �
Operating Expenses: Sales and marketing 43,393 35,462 General and
administrative 16,804 13,413 Research and development 31,205 25,964
Acquisition related charges � 5,793 � � - � Total operating
expenses � 97,195 � � 74,839 � � Operating income 15,934 19,709 �
Foreign exchange losses, net (12,219 ) (711 ) Interest and other
income (expense), net � 30 � � 1,461 � � Income before income tax
provision and minority interest in consolidated subsidiaries 3,745
20,459 Income tax provision � 4,270 � � 6,023 � � Income before
minority interest in consolidated subsidiaries (525 ) 14,436
Minority interest in consolidated subsidiaries � 160 � � 86 � Net
income (loss) $ (685 ) $ 14,350 � � Net income (loss) per share:
Basic $ (0.00 ) $ 0.09 � Diluted $ (0.00 ) $ 0.09 � � Weighted
average shares outstanding: Basic � 162,303 � � 160,365 � Diluted �
162,303 � � 162,906 � Bruker Corporation CONDENSED CONSOLIDATED
BALANCE SHEETS (in thousands) � � � � � � March 31, 2008 December
31, 2007 � ASSETS � Current assets: Cash and short-term investments
$ 321,282 $ 344,554 Accounts receivable, net 165,081 185,217
Inventories 511,597 447,688 Other current assets � 88,500 � 57,238
Total current assets 1,086,460 1,034,697 � Property and equipment,
net 231,541 207,588 Intangible and other assets � 79,428 � 69,346 �
Total assets $ 1,397,429 $ 1,311,631 � LIABILITIES AND
SHAREHOLDERS' EQUITY � Current liabilities: Short-term borrowings $
253,096 $ 35,591 Accounts payable 59,210 52,293 Customer deposits
275,241 233,466 Other current liabilities � 244,064 � 239,841 Total
current liabilities 831,611 561,191 � Long-term debt 169,428 6,394
Other long-term liabilities 106,005 107,656 Minority interest in
subsidiaries 672 538 � Total shareholders' equity � 289,713 �
635,852 � Total liabilities and shareholders' equity $ 1,397,429 $
1,311,631
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