Bruker Corporation (NASDAQ: BRKR) today reported financial
results for its first quarter ended March 31, 2015.
Bruker’s revenues for the first quarter of 2015 were $353.5
million, a decline of 16.6 percent compared to the first quarter of
2014. Excluding a 2.6 percent net negative effect from acquisitions
& divestitures, and an 11.0 percent negative effect from
changes in foreign exchange rates, Bruker reported a year-over-year
organic revenue decline of 3.0 percent in the first quarter of
2015.
First quarter 2015 GAAP earnings per diluted share (EPS) were
$0.04, compared to GAAP EPS of $0.05 in the first quarter of 2014.
Bruker reported first quarter 2015 non-GAAP EPS of $0.14, compared
to $0.11 in the first quarter of 2014. A reconciliation of GAAP to
non-GAAP financial measures is provided in the Company’s financial
tables accompanying this press release.
“Our first quarter 2015 revenues were lower due to foreign
exchange rates, divestitures, and a decline in our nuclear magnetic
resonance (NMR) business as a result of weaker NMR demand in 2014,”
said Frank Laukien, President and CEO of Bruker. “Despite the lower
revenues, we are pleased to report higher non-GAAP operating
margins, an increase in non-GAAP EPS and improved free cash flow.
Our lower spending and improved profit margins are the result of
our ongoing restructuring programs and the product line
divestitures we completed in our Chemical & Applied Markets
(CAM) division last year. On a currency-adjusted basis, we
experienced healthy order growth in the first quarter of 2015, with
strength in our NMR business.”
Laukien continued: “We continue to make good progress with our
profitable growth initiative. Bruker has recently launched and
received orders for important new products in adjacent markets and
for emerging applications. Examples include key orders for our
next-generation explosives trace detection (ETD) systems for
airport security; the launch of our next-generation GigaHertz NMR
technology for studying the biological functions and pathogenesis
of intrinsically disordered proteins (IDPs); FDA clearance of our
expanded MALDI Biotyper claim in the United States; and the
European launch of our new, high-end MALDI Biotypersmart
system and of our CE-marked MALDI Sepsityper solution for rapid
microbial identification from positive blood cultures.”
2015 Financial Outlook
Bruker is maintaining its current financial outlook for 2015.
The Company expects to generate organic revenue growth of
approximately one percent, and expects to increase its non-GAAP
operating margin by more than 100 basis points compared to 2014.
Non-GAAP EPS is expected to be flat in 2015, compared to 2014.
Quarterly Earnings Call
Bruker will host a conference call and webcast to discuss its
financial results, business outlook, and related corporate and
financial matters at 4:45 p.m. Eastern Standard Time today. To
listen to the webcast, investors can go to http://ir.bruker.com and
click on the “Events & Presentations” hyperlink. A slide
presentation that will be referenced during the webcast will be
posted to the Company’s website shortly before the webcast begins.
Investors can also listen to the earnings webcast via telephone by
dialing 1-877-270-2148 or +1-412-902-6510, and referencing
“Bruker’s First Quarter 2015 Earnings Conference Call”. A telephone
replay of the conference call will be available by dialing
1-877-344-7529 or +1-412-317-0088 and entering conference
number: 10064935. The replay will be available beginning one hour
after the end of the conference through May 14, 2015.
About Bruker Corporation
For more than 50 years, Bruker has enabled scientists to make
breakthrough discoveries and develop new applications that improve
the quality of human life. Bruker’s high-performance scientific
research instruments and high-value analytical solutions enable
scientists to explore life and materials at molecular, cellular and
microscopic levels.
In close cooperation with our customers, Bruker is enabling
innovation, productivity and customer success in life science
molecular research, in applied and pharma applications, and in
microscopy, nano-analysis and industrial applications, as well as
in cell biology, preclinical imaging, clinical research,
microbiology and molecular diagnostics. For more information,
please visit: http://www.bruker.com.
Use of Non-GAAP Financial Measures
The non-GAAP financial measures used by Bruker Corporation in
this press release are non-GAAP gross profit; non-GAAP gross profit
margin; non-GAAP operating income; non-GAAP operating margin;
non-GAAP interest and other income (expense) net; non-GAAP profit
before tax; non-GAAP tax rate; non-GAAP net income; non-GAAP
earnings per share; and free cash flow. These non-GAAP measures
exclude costs related to restructuring costs, acquisition and
related integration expenses, amortization of acquired intangible
assets and other costs that are non-recurring in nature. There are
limitations in using non-GAAP financial measures as they are not
prepared in accordance with U.S. generally accepted accounting
principles and may be different from non-GAAP financial measures
used by other companies.
We believe that the non-GAAP financial measures provide useful
and supplementary information to investors regarding our quarterly
and annual performance. It is our belief that these non-GAAP
financial measures are particularly important as Bruker implements
restructuring initiatives to expand operating margins. The
financial impact of these activities, particularly restructuring
activities, can be large and may adversely affect the comparability
of our results from period-to-period. We define free cash flow as
net cash provided by operating activities less additions to
property, plant, and equipment. We believe free cash flow is a
useful measure to evaluate our business as it indicates the amount
of cash generated after additions to property, plant, and equipment
that is available for, among other things, strategic acquisitions,
investments in our business, and repayment of debt.
We regularly use non-GAAP financial measures internally to
understand, manage, and evaluate our business results and make
operating decisions. We also measure our employees and compensate
them, in part, based on such non-GAAP measures. For the same
reasons, we also use this information for our forecasting
activities.
Non-GAAP financial measures should not be considered as a
substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. The non-GAAP financial measures
are meant to supplement, and to be viewed in conjunction with, GAAP
financial measures. They are limited in value because they exclude
charges that have a material effect on our reported results and,
therefore, should not be relied upon as the sole financial measures
to evaluate our financial results. Investors are encouraged to
review the reconciliation of the financial measures to their most
directly comparable GAAP financial measures as provided in the
tables accompanying this press release.
Forward Looking Statements
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, our ability to successfully implement our restructuring
initiatives, 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, 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, 2014. We
expressly disclaim any intent or obligation to update these
forward-looking statements other than as required by law.
-tables follow-
Bruker Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in millions) March 31, December 31,
2015 2014 ASSETS
Current assets: Cash and cash equivalents $ 334.5 $ 319.5
Short-term investments 157.8 178.0 Accounts receivable, net 227.6
293.2 Inventories 473.9 477.4 Other current assets 111.0
98.2 Total current assets 1,304.8 1,366.3 Property,
plant and equipment, net 228.7 249.9 Intangibles, net and other
long-term assets 239.2 248.6 Total assets $
1,772.7 $ 1,864.8
LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities: Current portion of long-term
debt $ 0.7 $ 0.8 Accounts payable 87.1 76.0 Customer advances 185.6
189.5 Other current liabilities 267.1 316.4 Total
current liabilities 540.5 582.7 Long-term debt 353.9 354.2
Other long-term liabilities 156.7 156.2 Total shareholders'
equity 721.6 771.7 Total liabilities and
shareholders' equity $ 1,772.7 $ 1,864.8
Bruker
Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) Three
Months Ended (in millions, except per share amounts)
March 31, 2015 2014
Revenues $ 353.5 $ 423.7 Cost of revenues
193.3 244.0 Gross profit 160.2 179.7
Operating expenses: Selling, general and administrative 94.6
109.5 Research and development 37.2 46.0 Other charges, net
13.2 3.6 Total operating expenses 145.0
159.1 Operating income 15.2 20.6
Interest and other income (expense), net (3.5 ) (4.9
) Income before income taxes and noncontrolling interest in
consolidated subsidiaries 11.7 15.7 Income tax provision 4.8
5.7 Consolidated net income 6.9 10.0
Net income attributable to noncontrolling interests in consolidated
subsidiaries 0.4 1.3 Net income
attributable to Bruker Corporation $ 6.5 $ 8.7
Net income per common share attributable to Bruker Corporation
shareholders: Basic $ 0.04 $ 0.05 Diluted $ 0.04
$ 0.05 Weighted average common shares
outstanding: Basic 168.3 167.3 Diluted
169.7 169.4
Bruker Corporation CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in
millions) Three Months Ended March 31,
2015 2014 Cash flows from
operating activities: Consolidated net income $ 6.9 $ 10.0
Adjustments to reconcile consolidated net income to cash flows from
operating activities: Depreciation and amortization 13.5 15.2
Write-down of demonstration inventories to net realizable value 5.0
7.6 Stock-based compensation expense 2.2 2.0 Deferred income taxes
(3.7 ) 0.3 Gain on disposal of product line - (0.3 ) Other non-cash
expenses, net 7.3 1.0 Changes in operating assets and liabilities,
net of acquisitions and divestitures: Accounts receivable 51.5 12.8
Inventories (36.6 ) (38.0 ) Accounts payable and accrued expenses
(6.8 ) 21.9 Income taxes payable, net (6.9 ) (6.0 ) Deferred
revenue (3.1 ) 5.0 Customer advances 8.9 (7.6 ) Other changes in
operating assets and liabilities, net (11.2 ) (5.4 )
Net cash provided by operating activities 27.0
18.5 Cash flows from investing activities: Purchases
of short-term investments (21.5 ) - Maturity of short-term
investments 21.5 - Proceeds from disposal of product line - 0.7
Purchases of property, plant and equipment (5.7 ) (9.2 ) Proceeds
from sales of property, plant and equipment -
0.6 Net cash used in investing activities (5.7 )
(7.9 ) Cash flows from financing activities:
Repayment of other debt, net (0.1 ) (0.2 ) Proceeds from issuance
of common stock, net 3.3 3.0 Payment of contingent consideration
(2.1 ) - Changes in restricted cash 0.8 (0.3 ) Excess tax benefit
related to stock option awards 2.2 -
Net cash provided by financing activities 4.1
2.5 Effect of exchange rate changes on cash and cash
equivalents (10.4 ) 2.2 Net change in cash and
cash equivalents 15.0 15.3 Cash and cash equivalents at beginning
of period 319.5 438.7 Cash and cash
equivalents at end of period $ 334.5 $ 454.0
Bruker Corporation
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES*
(unaudited) (in millions, except per share
amounts) Three Months Ended March 31, 2015
2014
Reconciliation of Non-GAAP Operating
Income, Non-GAAPProfit Before Tax, Non-GAAP Net Income, and
Non-GAAP EPS
GAAP Operating Income $ 15.2 $ 20.6 Non-GAAP
Adjustments: Restructuring Costs 3.3 2.4 Acquisition-Related Costs
0.2 1.1 Purchased Intangible Amortization 5.2 5.2 Other Costs
11.9 2.8 Total Non-GAAP Adjustments: $
20.6 $ 11.5
Non-GAAP Operating Income $
35.8 $ 32.1 Non-GAAP Operating Margin 10.1 % 7.6 % Non-GAAP
Interest & Other Income (Expense), net (3.5 ) (5.2 )
Non-GAAP Profit Before Tax 32.3 26.9 Non-GAAP Income
Tax Provision (8.8 ) (6.9 ) Non-GAAP Tax Rate 27.2 % 25.5 %
Minority Interest (0.4 ) (1.3 )
Non-GAAP Net Income
Attributable to Bruker 23.1 18.7 Weighted Average Shares
Outstanding (Diluted) 169.7 169.4
Non-GAAP
Earnings Per Share $ 0.14 $ 0.11
Reconciliation of GAAP and Non-GAAP Gross Profit
GAAP Gross
Profit $ 160.2 $ 179.7 Non-GAAP Adjustments: Restructuring
Costs 2.0 2.2 Acquisition-Related Costs 0.2 0.5 Purchased
Intangible Amortization 4.7 4.8 Total
Non-GAAP Adjustments: 6.9 7.5
Non-GAAP Gross Profit $ 167.1 $ 187.2 Non-GAAP Gross Margin
47.3 % 44.2
%
Reconciliation of GAAP and Non-GAAP Interest & Other Income
(Expense), net
GAAP Interest & Other Income (Expense),
net $ (3.5 ) $ (4.9 ) Non-GAAP Adjustments: Sale of Product
Line - (0.3 )
Non-GAAP Interest & Other
Income (Expense), net $ (3.5 )
$ (5.2 )
* Please refer to our press
release for a full explanation for the use of non-GAAP
measures.
Bruker CorporationJoshua Young, +1 978–667–9580, ext. 1479Vice
President, Investor Relationsjoshua.young@Bruker.com
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