Bruker Corporation (NASDAQ: BRKR) today reported financial
results for the first quarter ended March 31, 2011.
First Quarter 2011 Highlights
- Revenue increased 29% year-over-year to
$357.0 million, or by 26% on a currency-adjusted basis
- Adjusted operating income increased by
27% year-over-year to $37.6 million
- Adjusted EPS increased by $0.03
year-over-over to $0.14
- New order bookings increased more than
40% year-over-year, with organic bookings growth of greater than
20% year-over-year
- Moved GC business in The Netherlands to
new Bruker factory in January 2011
- Moved GC-MS business in California to
new Bruker factory in early April 2011
- Introduced more than 16 new products at
Pittcon 2011 and other conferences
- Closed acquisition of Bruker’s new
radiation detection business in January 2011
- Closed acquisition of Michrom liquid
chromatography and ion source technology company on April 1,
2011
Financial Results
In the first quarter of 2011, GAAP revenue was $357.0 million,
an increase of 29% compared to revenue of $277.7 million in the
first quarter of 2010. Excluding the effects of foreign currency
translation, first quarter revenue increased by 26% year-over-year.
Adjusted operating income in the first quarter of 2011 was $37.6
million, compared to $29.5 million in the first quarter of 2010, an
increase of 27%.
GAAP net income in the first quarter of 2011 was $11.3 million,
or $0.07 per diluted share, compared to GAAP net income of $16.1
million, or $0.10 per diluted share, in the first quarter of 2010.
Included in Bruker's first quarter 2011 GAAP net income were
acquisition related inventory step-ups and other acquisition costs
of $6.3 million, non-cash amortization of $3.7 million and
stock-based compensation charges of $1.5 million. Adjusted net
income in the first quarter of 2011 was $22.8 million, or $0.14 per
diluted share, compared to adjusted net income of $18.3 million, or
$0.11 per diluted share, in the first quarter of 2010.
Bruker Scientific Instruments (BSI) Segment
In the first quarter of 2011, BSI revenue was $335.8 million, an
increase of 29% compared to revenue of $260.3 million in the first
quarter of 2010. Excluding the effects of foreign currency
translation, BSI revenue in the first quarter increased by 27%
year-over-year. Adjusted operating income for BSI increased by 31%
in the first quarter of 2011, with an adjusted operating margin of
11.7%, compared to 11.6% in the first quarter of 2010. Adjusted EPS
for the BSI segment in the first quarter of 2011 was $0.16 per
diluted share, compared to $0.11 per diluted share in the first
quarter of 2010.
Bruker Energy & Supercon Technologies (BEST)
Segment
In the first quarter of 2011, BEST revenue was $24.0 million, an
increase of 16% compared to revenue of $20.7 million in the first
quarter of 2010. Excluding the effects of foreign currency
translation, BEST revenue in the first quarter increased by 17%
year-over-year. In the first quarter of 2011, BEST had an adjusted
operating loss of ($0.5) million, compared to an adjusted operating
loss of ($0.3) million in the first quarter of 2010. Adjusted net
loss per diluted share for the BEST segment in the first quarter of
2011 was ($0.01), compared to ($0.00) in the first quarter of
2010.
Comment and Outlook
Frank Laukien, Bruker’s President and CEO, commented: “We are
pleased with our first quarter 2011 results, as we delivered solid
growth in revenue, adjusted operating margins and earnings
year-over-year. Overall our end markets are healthy, and with our
2010 and recent new product introductions and strategic
acquisitions, we have further diversified our end markets. As a
result, our first quarter 2011 new order bookings have increased by
more than 40% over the first quarter of 2010, and we ended the
first quarter of 2011 with a new record in backlog. Bruker is very
well positioned to continue executing its strategy of rapid,
profitable growth and high return on invested capital.”
Brian Monahan, Chief Financial Officer of Bruker Corporation,
added: “During the first quarter of 2011, we accelerated our
strategic investments in research and development, as well as in
marketing and sales for our new Chemical & Applied Markets
(CAM) division. These investments were predominantly in countries
where we were not able to tax-benefit these losses, putting
pressure on our first quarter 2011 tax rate. The high GAAP tax
rate, combined with foreign exchange losses, negatively affected
our EPS by approximately $0.03 in the first quarter of 2011. As a
result of our strong revenue, bookings and adjusted operating
income momentum, and expected improved tax rate for the remainder
of 2011, we confirm our financial goals for the full year
2011.”
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 EPS,
adjusted operating income and adjusted operating margin, which
exclude acquisition-related and restructuring and other charges. We
exclude the above items because they are outside our normal
operations and/or, in certain cases, are difficult to forecast
accurately for future periods. We believe that the use of 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.
For example:
We exclude certain acquisition-related charges or credits and
associated tax effects, including charges for the sale of
inventories revalued at the date of acquisition, significant
transaction costs such as legal fees and credits associated with
bargain purchases. We exclude these costs because we do not believe
they are indicative of our normal operating costs.
We exclude charges and tax effects associated with restructuring
and business divestiture activities, such as reducing overhead and
consolidating facilities. We believe that the costs related to
these restructuring and business divestiture activities are not
indicative of our normal operating costs.
We exclude the expense and tax effects associated with the
amortization of acquisition-related intangible assets because a
significant portion of the purchase price for acquisitions may be
allocated to intangible assets that have lives of 3 to 10 years. We
also exclude charges for non-cash stock-based compensation.
Exclusion of these non-cash expenses allows comparisons of
operating results that are consistent over time for both our newly
acquired and long-held businesses.
We exclude certain gains/losses associated with significant tax
audits or events which cannot be expected to occur with regularity
or predictability and that we believe are not indicative of typical
gains and losses.
Bruker’s management uses these non-GAAP measures, in addition to
GAAP financial measures, as the basis for measuring the company’s
core operating performance and comparing such performance to that
of prior periods and to the performance of our competitors. Such
measures are also used by management in their financial and
operating decision-making and for compensation purposes.
The non-GAAP financial measures of Bruker’s results of
operations included in this press release are not meant to be
considered superior to or a substitute for Bruker’s results of
operations prepared in accordance with GAAP. Reconciliations of
such non-GAAP financial measures to the most directly comparable
GAAP financial measures are set forth in the accompanying
tables.
EARNINGS CONFERENCE CALL
Bruker Corporation will host an operator-assisted earnings
conference call at 9:00 a.m. Eastern Daylight Time on Thursday,
April 28, 2011. To listen to the webcast, investors can go to
http://ir.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 800-688-0796, or +1-617-614-4070
outside the US and Canada. Investors should refer to the Bruker
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 +1-617-801-6888 outside the
US and Canada, and then entering replay pass code 83821504. For
more information, please visit http://ir.bruker.com.
CAUTIONARY STATEMENT OF BRUKER CORPORATION
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 risks and
uncertainties that could cause actual results to differ materially
from those projected, including, but not limited to, risks and
uncertainties relating to adverse changes in conditions in the
global economy and volatility in the capital markets, 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, realization of
anticipated benefits from economic stimulus programs, intellectual
property rights, litigation, and exposure to foreign currency
fluctuations and other risk factors discussed from time to time in
our filings with the Securities and Exchange Commission. 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, 2010, our most
recent quarterly reports on Form 10-Q and our current reports on
Form 8-K. We expressly disclaim any intent or obligation to update
these forward-looking statements other than as required by law.
CAUTIONARY STATEMENT OF BEST
This press release contains forward-looking statements. All
statements other than statements of historical facts contained in
this press release, including statements regarding our future
results of operations and financial position, business strategy and
plans and objectives of management for future operations, are
forward-looking statements. In many cases, you can identify
forward-looking statements by terms such as "may," "will,"
"should," "expect," "plan," "anticipate," "could," "intend,"
"target," "project," "contemplate," "believe," "estimate,"
"predict," "potential," "continue" or other similar words.
These forward-looking statements are predictions, not
guarantees. These statements relate to future events or our future
financial performance and involve known and unknown risks,
uncertainties and other important factors that may cause our actual
results, levels of activity, performance or achievements to
materially differ from any future results, levels of activity,
performance or achievements expressed or implied by these
forward-looking statements. Risks and uncertainties that could
cause actual results to differ materially from those projected,
include, but are not limited to, the integration of businesses we
have acquired or may acquire in the future, changing technologies,
product development, 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. Because forward-looking statements are inherently
subject to risks and uncertainties, some of which cannot be
predicted or quantified, you should not rely on these
forward-looking statements as guarantees of future events.
The forward-looking statements in this press release represent
our views as of the date of this press release. We anticipate that
subsequent events and developments may cause our views to change.
However, while we may elect to update these forward-looking
statements at some point in the future, we have no current
intention of doing so except to the extent required by applicable
law. You should, therefore, not rely on these forward-looking
statements as representing our views as of any date subsequent to
the date of this press release.
Bruker Corporation
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (unaudited)
Three Months Ended (in millions, except per
share amounts) March 31, 2011
2010 Revenues $ 357.0 $ 277.7
Cost of revenues 191.9 151.4
Gross profit 165.1 126.3 Operating Expenses: Selling,
general and administrative 88.7 65.6 Research and development 44.7
32.8 Amortization of acquisition-related intangible assets 3.9 0.5
Other charges, net 2.1 0.5 Total
operating expenses 139.4 99.4
Operating income 25.7 26.9 Interest and other income
(expense), net (5.0 ) (0.3 )
Income before income taxes and
noncontrolling interest in consolidated subsidiaries
20.7 26.6 Income tax provision 9.0 10.6
Consolidated net income 11.7 16.0
Net income (loss) attributable to
noncontrolling interests in consolidated subsidiaries
0.4 (0.1 ) Net income attributable to Bruker
Corporation $ 11.3 $ 16.1
Net income per common share attributable
to Bruker Corporation shareholders:
Basic and diluted $ 0.07 $ 0.10 Weighted
average common shares outstanding: Basic 165.1
164.1 Diluted 166.7 165.6
Reconciliation of adjusted operating
income, net income and earnings per share forthe three
months ended March 31, 2011 and 2010 (unaudited) (a) (b)
(in millions, except per share amounts) Three
Months Ended March 31, 2011
2010 Reconciliation of Adjusted Operating
Income GAAP operating income (a) $ 25.7 $ 26.9 Cost of revenues
charges/(credits) (c) 4.1 - Stock-based compensation expense (d)
1.8 1.6 Amortization of acquisition-related intangible assets (d)
3.9 0.5 Other charges (e) 2.1 0.5
Adjusted operating income $ 37.6 $ 29.5 Adjusted
operating margins 10.5 % 10.6 %
Reconciliation of
Adjusted Net Income GAAP net income (a) $ 11.3 $ 16.1 Cost of
revenues charges/(credits) (c) 4.1 - Stock-based compensation
expense (d) 1.5 1.3 Amortization of acquisition-related intangible
assets (d) 3.7 0.4 Other charges (e) 2.2 0.5
Adjusted net income $ 22.8 $ 18.3
Reconciliation of Adjusted Earnings Per Share GAAP
earnings per share (a) $ 0.07 $ 0.10 Cost of revenues
charges/(credits) (c) 0.03 - Stock-based compensation expense (d)
0.01 0.01 Amortization of acquisition-related intangible assets (d)
0.02 - Other charges (e) 0.01 -
Adjusted earnings per share $ 0.14 $ 0.11
(a) “GAAP” (reported) results were determined in accordance with
U.S. generally accepted accounting principles (GAAP)
(b) Adjusted results are non-GAAP measures and for income
measures exclude certain charges to cost of revenues (see note c
for details); amortization of acquisition-related intangible assets
and stock-based compensation (see note d for details);
restructuring and other charges (see note e for details); and the
tax consequences of the preceding items
(c) Reported results in 2011 include charges for the sale of
inventories revalued at the date of acquisition.
(d) Reported results in 2011 and 2010 include non-cash charges
for the amortization of acquisition-related intangible assets and
stock-based compensation
(e) Reported results within other charges in 2011 include $2.2
million of various costs incurred in connection with acquisitions
and in 2010 other charges include $0.5 million related to
acquisitions and restructuring charges.
The charges described in notes c, d and e have been tax effected
using enacted tax rates in the jurisdiction in which the charge was
recorded.
Reconciliation of BSI and BEST
reportable segments to the consolidated results ofBruker
Corporation for the three months ended March 31, 2011 and
2010(unaudited) (a) (b)
Segment Data Bruker
(in millions, except per share amounts) Bruker
Energy & Corporate, Consolidated
Scientific Supercon Adjustments Bruker
Three Months Ended March 31, 2011: Instruments
Technologies & Eliminations Corporation
Revenue $ 335.8 $ 24.0 $ (2.8 ) $ 357.0 Gross profit
- GAAP $ 161.5 $ 4.9 $ (1.3 ) $ 165.1 Cost of revenues charges (c)
4.1 - - 4.1 Stock-based compensation expense (d) 0.3
- - 0.3 Gross profit -
adjusted $ 165.9 $ 4.9 $ (1.3 ) $ 169.5 Gross profit margin -
adjusted 49.4 % 20.4 % 47.5 % Operating income (loss) - GAAP
$ 27.7 $ (0.7 ) $ (1.3 ) $ 25.7 Cost of revenues charges (c) 4.1 -
- 4.1 Stock-based compensation expense (d) 1.7 0.1 - 1.8
Amortization of acquisition-related intangible assets (d) 3.8 0.1 -
3.9 Other charges (e) 2.1 - -
2.1 Operating income (loss) - adjusted $ 39.4
$ (0.5 ) $ (1.3 ) $ 37.6 Operating margin - adjusted 11.7 % (2.1 %)
10.5 %
Net income (loss) attributable to Bruker
Corporation - GAAP
$ 14.1 $ (1.8 ) $ (1.0 ) $ 11.3 Cost of revenues charges (c) 4.1 -
- 4.1 Stock-based compensation expense (d) 1.4 0.1 - 1.5
Amortization of acquisition-related intangible assets (d) 3.6 0.1 -
3.7 Other charges (e) 2.2 - -
2.2
Net income (loss) attributable to Bruker
Corporation - adjusted
$ 25.4 $ (1.6 ) $ (1.0 ) $ 22.8
Diluted net income (loss) per common share
attributable to Bruker Corporation - GAAP
$ 0.09 $ (0.01 ) $ (0.01 ) $ 0.07 Cost of revenues charges (c) 0.03
- - 0.03 Stock-based compensation expense (d) 0.01 - - 0.01
Amortization of acquisition-related intangible assets (d) 0.02 - -
0.02 Other charges (e) 0.01 - -
0.01
Diluted net income (loss) per common share
attributable to Bruker Corporation - adjusted
$ 0.16 $ (0.01 ) $ (0.01 ) $ 0.14 Weighted average shares
outstanding: 166.7 165.1 165.1 166.7
Three Months Ended
March 31, 2010: Revenue $ 260.3 $ 20.7 $ (3.3 ) $ 277.7
Gross profit - GAAP $ 122.5 $ 4.1 $ (0.3 ) $ 126.3
Stock-based compensation expense (d) 0.2 -
- 0.2 Gross profit - adjusted $
122.7 $ 4.1 $ (0.3 ) $ 126.5 Gross profit margin - adjusted 47.1 %
19.8 % 45.6 % Operating income (loss) - GAAP $ 27.7 $ (0.5 )
$ (0.3 ) $ 26.9 Stock-based compensation expense (d) 1.5 0.1 - 1.6
Amortization of acquisition-related intangible assets (d) 0.4 0.1 -
0.5 Other charges, net (e) 0.5 -
- 0.5 Operating income (loss) - adjusted $
30.1 $ (0.3 ) $ (0.3 ) $ 29.5 Operating margin - adjusted 11.6 %
(1.4 %) 10.6 %
Net income (loss) attributable to Bruker
Corporation - GAAP
$ 17.2 $ (0.8 ) $ (0.3 ) $ 16.1 Stock-based compensation expense
(d) 1.2 0.1 - 1.3 Amortization of acquisition-related intangible
assets (d) 0.3 0.1 - 0.4 Other charges, net (e) 0.5
- - 0.5
Net income (loss) attributable to Bruker
Corporation - adjusted
$ 19.2 $ (0.6 ) $ (0.3 ) $ 18.3
Diluted net income (loss) per common share
attributable to Bruker Corporation - GAAP
$ 0.10 $ (0.00 ) $ (0.00 ) $ 0.10 Stock-based compensation expense
(d) 0.01 - - 0.01 Amortization of acquisition-related intangible
assets (d) - - - - Other charges, net (e) - -
- -
Diluted net income (loss) per common share
attributable to Bruker Corporation - adjusted
$ 0.11 $ (0.00 ) $ (0.00 ) $ 0.11 Weighted average shares
outstanding: 165.6 164.1 164.1 165.6
Bruker Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions) March 31, December
31, 2011 2010
ASSETS
Current assets: Cash, cash equivalents and restricted cash $ 196.3
$ 233.3 Accounts receivable, net 250.5 232.9 Inventories 571.6
511.0 Other current assets 97.4 73.9 Total current
assets 1,115.8 1,051.1 Property, plant and equipment, net
246.8 233.7 Intangible and other long-term assets 261.3
265.0 Total assets $ 1,623.9 $ 1,549.8
LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities:
Short-term borrowings, including current
portion of long-term debt
$ 216.4 $ 214.4 Accounts payable 81.0 64.0 Customer advances 264.0
242.2 Other current liabilities 309.9 310.9 Total
current liabilities 871.3 831.5 Long-term debt 79.0 86.6
Other long-term liabilities 102.1 104.3 Total shareholders'
equity 571.5 527.4 Total liabilities and
shareholders' equity $ 1,623.9 $ 1,549.8
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