- Q1 2020 revenue decline of 8.1% year-over-year, organic
revenue decline of 7.9%
- Q1 2020 GAAP EPS of $0.07, compared to $0.20 in Q1 2019;
non-GAAP EPS of $0.14, compared to $0.28 in Q1 2019
- COVID-19 disruption expected to negatively affect Q2 2020
financial results
Bruker Corporation (Nasdaq: BRKR) today announced financial
results for its first quarter ended March 31, 2020.
First Quarter 2020 Financial Results
Bruker’s revenues for the first quarter of 2020 were $424.0
million, an 8.1% decline compared to the first quarter of 2019. In
the first quarter of 2020, on an organic basis, Bruker’s revenue
declined 7.9% year-over-year, growth from acquisitions was 0.9%,
while foreign currency translation had a negative effect of 1.1%.
The reported and organic revenue declines were primarily due to
COVID-19 related disruptions and included an approximately 30%
year-over-year revenue decline in China.
First quarter 2020 GAAP operating income was $16.4 million,
compared to $41.9 million in the first quarter of 2019,
representing GAAP operating margins of 3.9% and 9.1%, respectively.
Non-GAAP operating income was $32.2 million in the first quarter of
2020, compared to $62.3 million in the first quarter of 2019.
Bruker’s first quarter 2020 non-GAAP operating margin was 7.6%,
compared to 13.5% in the first quarter of 2019.
First quarter 2020 GAAP diluted earnings per share (EPS) were
$0.07, compared to $0.20 in the first quarter of 2019. First
quarter 2020 non-GAAP diluted EPS were $0.14, compared to $0.28 in
the first quarter of 2019. The year-over-year declines in the
Company’s GAAP and non-GAAP operating income, operating margins and
diluted EPS were primarily due to lower revenues associated with
COVID-19 disruptions.
A reconciliation of non-GAAP to GAAP financial measures is
provided in the tables accompanying this press release.
Frank H. Laukien, President and CEO of Bruker, commented:
“Bruker is a healthy, essential company, and our life science tools
and diagnostics markets are quite resilient. In 2020, we continue
to navigate the COVID-19 disruptions by focusing on (1) the health
and safety of our employees, customers and partners, (2)
maintaining business continuity and service levels for our
customers, (3) executing prudent temporary cost reductions, and (4)
delivering enabling research and diagnostic products to help fight
the pandemic, and to support other essential priorities of our
society. We intend to maintain our important Project Accelerate and
Operational Excellence investments to strengthen Bruker for the
long term.”
Dr. Laukien continued: “Our first quarter 2020 results reflect
the initial impact of the COVID-19 pandemic, and we expect a more
pronounced year-over-year revenue decline in the second quarter.
However, we believe that the long-term funding trends in life
science, biopharma and basic medical research, as well as in
infectious disease diagnostics, are going to be strong as a result
of the COVID-19 pandemic. We believe Bruker is well positioned for
a gradually improving business environment in the second half of
2020, and a recovery in 2021. Moreover, Bruker continues to have a
strong balance sheet and a very solid liquidity position.”
Fiscal Year 2020 (FY 2020) Guidance Remains Suspended
On March 27, 2020, Bruker suspended its FY 2020 financial
guidance due to the uncertain business conditions created by
COVID-19. Bruker anticipates that the pandemic will have a more
significant negative impact on the Company’s second quarter 2020
financial results.
Quarterly Earnings Call
Bruker will host a conference call and webcast to discuss its
financial results, business outlook, and related corporate and
financial matters today, May 6, at 4:30 p.m. Eastern Daylight Time.
To listen to the webcast, investors can go to https://ir.bruker.com
and click on the “Q1 2020 Earnings Webcast” hyperlink. A slide
presentation that will be referenced during the webcast will be
posted to our Investor Relations website shortly before the webcast
begins. Investors can also listen to the earnings webcast via
telephone by dialing 1-888-437-2685 (US toll free) or
+1-412-317-6702 (international) and referencing “Bruker’s First
Quarter 2020 Earnings Conference Call”. A telephone replay of the
conference call will be available by dialing 1-877-344-7529 (US
toll free) or +1-412-317-0088 (international) and entering
conference number 10143194. The replay will be available beginning
one hour after the end of the conference call through June 6,
2020.
About Bruker Corporation (Nasdaq: BRKR)
Bruker is enabling scientists to make breakthrough discoveries
and develop new applications that improve the quality of human
life. Bruker’s high-performance scientific instruments and
high-value analytical and diagnostic solutions enable scientists to
explore life and materials at molecular, cellular and microscopic
levels. In close cooperation with our customers, Bruker is enabling
innovation, improved productivity and customer success in life
science molecular research, in applied and pharma applications, in
microscopy and nanoanalysis, and in industrial applications, as
well as in cell biology, preclinical imaging, clinical phenomics
and proteomics research and clinical microbiology. For more
information, please visit: www.bruker.com.
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with U.S. generally accepted
accounting principles (GAAP), we use the following non-GAAP
financial measures: non-GAAP gross profit; non-GAAP gross profit
margin; non-GAAP operating income; non-GAAP operating profit;
non-GAAP operating margin; non-GAAP SG&A expense; non-GAAP
profit before tax; non-GAAP tax rate; non-GAAP net income and
non-GAAP earnings per share. These non-GAAP measures exclude costs
related to restructuring actions, acquisition and related
integration expenses, amortization of acquired intangible assets
and other non-operational costs.
We also may refer to organic revenue growth or decline and free
cash flow, which are also non-GAAP financial measures. We define
the term organic revenue as GAAP revenue excluding the effect of
changes in foreign currency translation rates and the effect of
acquisitions and divestitures, and believe it is a useful measure
to evaluate our continuing business. 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 because it indicates the
amount of cash generated after additions to property, plant, and
equipment that is available for, among other things, acquisitions,
investments in our business, repayment of debt and return of
capital to shareholders.
The presentation of these non-GAAP financial measures is not
intended to be a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP and may
be different from non-GAAP financial measures used by other
companies, and therefore, may not be comparable among companies. We
believe these non-GAAP financial measures provide meaningful
supplemental information regarding our performance, however we urge
investors to review the reconciliation of these financial measures
to the comparable GAAP financial measures included in the
accompanying tables, and not to rely on any single financial
measure to evaluate our business. Specifically, management believes
that the non-GAAP measures mentioned above provide relevant and
useful information which is widely used by analysts, investors and
competitors in our industry, as well as by our management, in
assessing both consolidated and business unit performance.
We use these non-GAAP financial measures to evaluate our
period-over-period operating performance because our management
believes this provides a more comparable measure of our continuing
business by adjusting for certain items that are not reflective of
the underlying performance of our business. These measures may also
be useful to investors in evaluating the underlying operating
performance of our business and forecasting future results. We
regularly use these 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 certain non-GAAP measures and use this
information for our planning and forecasting activities.
Additional information relating to the non-GAAP financial
measures used in this press release and reconciliations to the most
directly comparable GAAP financial measures is provided in the
tables accompanying this press release following our GAAP financial
statements.
Forward Looking Statements
Any statements contained in this press release which do not
describe historical facts may constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including statements regarding management’s expectations
for future financial and operational performance and business
outlook; the impact of the COVID-19 coronavirus; future funding
trends in certain industries, including life sciences; and
statements found under the “Use of Non-GAAP Financial Measures”
section of this release. 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 indicated, including, but not limited to,
risks and uncertainties relating to continued adverse changes in
conditions in the global economy and volatility in the capital
markets, the impact of the COVID-19 coronavirus outbreak and our
ability to recover from its effects, the integration and assumption
of liabilities of businesses we have acquired or may acquire in the
future, fluctuations in foreign currency exchange rates, our
material weaknesses in internal controls, 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, loss of key personnel, dependence on collaborative
partners, key suppliers and contract manufacturers, capital
spending and government funding policies, changes in governmental
regulations, the use and protection of intellectual property
rights, litigation, and other risk factors discussed from time to
time in our filings with the Securities and Exchange Commission, or
SEC. 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,
2019. 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 (in millions)
March 31,
December 31,
2020
2019
ASSETS
Current assets: Cash and cash equivalents
$
795.5
$
678.3
Short-term investments
56.2
6.6
Accounts receivable, net
325.5
362.2
Inventories
625.5
577.2
Other current assets
187.3
172.0
Total current assets
1,990.0
1,796.3
Property, plant and equipment, net
318.6
306.1
Operating lease assets
62.3
65.6
Intangibles, net and other long-term assets
591.0
603.5
Total assets
$
2,961.9
$
2,771.5
LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Current portion of long-term debt
$
95.8
$
0.5
Accounts payable
127.0
118.4
Customer advances
141.8
137.9
Other current liabilities
401.2
388.8
Total current liabilities
765.8
645.6
Long-term debt
914.8
812.8
Operating lease liabilities
44.3
47.0
Other long-term liabilities
312.4
327.9
Redeemable noncontrolling interest
-
21.1
Total shareholders' equity
924.6
917.1
Total liabilities and shareholders' equity
$
2,961.9
$
2,771.5
Bruker Corporation CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Three Months Ended
(in millions, except per share amounts)
March 31,
2020
2019
Revenues
$
424.0
$
461.4
Cost of revenues
231.7
246.7
Gross profit
192.3
214.7
Operating expenses: Selling, general and administrative
121.2
120.1
Research and development
48.5
46.4
Other charges, net
6.2
6.3
Total operating expenses
175.9
172.8
Operating income
16.4
41.9
Interest and other income (expense), net
(2.9
)
(3.5
)
Income before income taxes and noncontrolling interest in
consolidated subsidiaries
13.5
38.4
Income tax provision
2.9
7.7
Consolidated net income (loss)
10.6
30.7
Net income attributable to noncontrolling interests in consolidated
subsidiaries
0.1
(0.1
)
Net income (loss) attributable to Bruker Corporation
$
10.5
$
30.8
Net income (loss) per common share attributable to Bruker
Corporation shareholders: Basic
$
0.07
$
0.20
Diluted
$
0.07
$
0.20
Weighted average common shares outstanding: Basic
154.2
156.7
Diluted
155.4
157.9
Bruker Corporation CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three Months Ended
(in millions)
March 31,
2020
2019
Cash flows from operating activities: Consolidated net income
(loss)
$
10.6
$
30.7
Adjustments to reconcile consolidated net income to cash flows from
operating activities: Depreciation and amortization
19.0
19.0
Stock-based compensation expense
3.3
3.1
Deferred income taxes
1.1
(0.2
)
Other non-cash expenses, net
11.7
4.5
Changes in operating assets and liabilities, net of acquisitions
and divestitures: Accounts receivable
29.5
(6.0
)
Inventories
(61.0
)
(43.2
)
Accounts payable and accrued expenses
19.1
11.0
Income taxes payable, net
(15.0
)
(7.9
)
Deferred revenue
20.6
13.9
Customer advances
16.5
6.5
Other changes in operating assets and liabilities, net
(20.4
)
(17.2
)
Net cash provided by operating activities
35.0
14.2
Cash flows from investing activities: Purchases of
short-term investments
(50.0
)
-
Cash paid for acquisitions, net of cash acquired
(22.0
)
(16.1
)
Purchases of property, plant and equipment
(30.5
)
(10.6
)
Net proceeds from cross-currency swap agreements
1.9
-
Net cash used in investing activities
(100.6
)
(26.7
)
Cash flows from financing activities: Repayment of revolving
lines of credit
-
(25.9
)
Proceeds from revolving lines of credit
197.5
40.6
Repayment of 2012 Note Purchase Agreement
-
(15.0
)
Proceeds (Repayment) of other debt, net
0.9
(4.3
)
Proceeds from issuance of common stock, net
0.6
3.1
Payment of contingent consideration
(0.3
)
(1.0
)
Payment of dividends to common stockholders
(6.2
)
(6.3
)
Cash Payments to noncontrolling interest
(1.2
)
-
Net cash provided by (used in) financing activities
191.3
(8.8
)
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
(8.7
)
(2.4
)
Net change in cash, cash equivalents and restricted cash
117.0
(23.7
)
Cash, cash equivalents and restricted cash at beginning of period
681.9
326.3
Cash, cash equivalents and restricted cash at end of period
$
798.9
$
302.6
Bruker Corporation RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES (unaudited) (in millions,
except per share amounts)
Three Months Ended March
31,
2020
2019
Reconciliation of Non-GAAP Operating Income, Non-GAAP Profit Before
Tax, Non-GAAP Net Income, and Non-GAAP EPS
GAAP Operating
Income
$
16.4
$
41.9
Non-GAAP Adjustments: Restructuring Costs
2.3
4.0
Acquisition-Related Costs
(1.1
)
4.9
Purchased Intangible Amortization
8.7
10.1
Other Costs
5.9
1.4
Total Non-GAAP Adjustments:
$
15.8
$
20.4
Non-GAAP Operating Income
$
32.2
$
62.3
Non-GAAP Operating Margin
7.6
%
13.5
%
Non-GAAP Interest & Other Expense, net
(2.9
)
(3.5
)
Non-GAAP Profit Before Tax
29.3
58.8
Non-GAAP Income Tax Provision
(7.0
)
(14.4
)
Non-GAAP Tax Rate
23.9
%
24.5
%
Minority Interest
(0.1
)
0.1
Non-GAAP Net Income Attributable to Bruker
22.2
44.5
Weighted Average Shares Outstanding (Diluted)
155.4
157.9
Non-GAAP Earnings Per Share
$
0.14
$
0.28
Reconciliation of GAAP and Non-GAAP Gross Profit
GAAP Gross Profit
$
192.3
$
214.7
Non-GAAP Adjustments: Restructuring Costs
0.8
2.8
Acquisition-Related Costs
-
1.2
Purchased Intangible Amortization
4.9
6.8
Other Costs
0.1
-
Total Non-GAAP Adjustments:
5.8
10.8
Non-GAAP Gross Profit
$
198.1
$
225.5
Non-GAAP Gross Margin
46.7
%
48.9
%
Reconciliation of GAAP and Non-GAAP Selling, General and
Administrative (SG&A) Expenses
GAAP SG&A Expenses
$
121.2
$
120.1
Non-GAAP Adjustments: Purchased Intangible Amortization
3.8
3.3
Non-GAAP SG&A Expenses
$
117.4
$
116.8
Reconciliation of GAAP and Non-GAAP Tax Rate
GAAP Tax
Rate
21.5
%
20.1
%
Non-GAAP Adjustments: Tax Impact of Non-GAAP Adjustments
-0.2
%
-0.4
%
U.S. Tax Reform - Toll Charge
0.0
%
4.2
%
Other Discrete Items
2.6
%
0.6
%
Total Non-GAAP Adjustments:
2.4
%
4.4
%
Non-GAAP Tax Rate
23.9
%
24.5
%
Reconciliation of GAAP and Non-GAAP Earnings Per Share
(Diluted)
GAAP Earnings Per Share (Diluted)
$
0.07
$
0.20
Non-GAAP Adjustments: Restructuring Costs
0.01
0.03
Acquisition-Related Costs
(0.01
)
0.03
Purchased Intangible Amortization
0.06
0.06
Other Costs
0.04
0.01
Income Tax Rate Differential
(0.03
)
(0.05
)
Total Non-GAAP Adjustments:
0.07
0.08
Non-GAAP Earnings Per Share (Diluted)
$
0.14
$
0.28
Reconciliation of GAAP Operating Cash Flow and Non-GAAP Free
Cash Flow
GAAP Operating Cash Flow
$
35.0
$
14.2
Non-GAAP Adjustments: Purchases of property, plant and equipment
(30.5
)
(10.6
)
Non-GAAP Free Cash Flow
$
4.5
$
3.6
Days Inventory Outstanding is calculated as follows: GAAP
Average Inventory balance divided by (GAAP Revenue less Non-GAAP
Gross Profit (defined above))
Days Payable Outstanding is calculated as follows: GAAP Average
Accounts Payable balance divided by (GAAP Revenue less Non-GAAP
Gross Profit (defined above) plus the Change in GAAP Inventory
balance)
Days Sales Outstanding is calculated as follows: GAAP Average
Accounts Receivable balance divided by GAAP Revenue
Bruker Corporation REVENUE (unaudited) (in
millions)
Three Months Ended March
31,
2020
2019
Revenue by Group: Bruker BioSpin
$
120.9
$
127.8
Bruker CALID
140.5
148.2
Bruker Nano
120.1
140.8
BEST
46.2
47.8
Eliminations
(3.7
)
(3.2
)
Total Revenue
$
424.0
$
461.4
Revenue by End Customer Geography: United States
$
109.4
$
117.6
Europe
144.9
155.1
Asia Pacific
137.2
152.2
Other
32.5
36.5
Total Revenue
$
424.0
$
461.4
Reconciliation of GAAP Reported Revenue Growth to Organic
Revenue Growth
Total Bruker
GAAP Revenue as of Prior Comparable Period
$
461.4
$
431.7
Non-GAAP Adjustments: Acquisitions and divestitures
4.3
26.0
Organic
(36.2
)
23.5
Currency
(5.5
)
(19.8
)
Total Non-GAAP Adjustments:
(37.4
)
29.7
Non-GAAP Revenue
$
424.0
$
461.4
Revenue Growth
-8.1
%
6.9
%
Organic Revenue Growth
-7.9
%
5.5
%
Reconciliation of GAAP Reported Revenue Growth to Organic
Revenue Growth
Bruker Scientific Instruments
(1)
GAAP Revenue as of Prior Comparable Period
$
416.8
$
387.0
Non-GAAP Adjustments: Acquisitions and divestitures
3.3
26.0
Organic
(34.3
)
21.1
Currency
(4.3
)
(17.3
)
Total Non-GAAP Adjustments:
(35.3
)
29.8
Non-GAAP Revenue
$
381.5
$
416.8
Revenue Growth
-8.5
%
7.7
%
Organic Revenue Growth
-8.2
%
5.5
%
Reconciliation of GAAP Reported Revenue Growth to Organic
Revenue Growth
BEST, net of Intercompany
Eliminations
GAAP Revenue as of Prior Comparable Period
$
44.6
$
44.7
Non-GAAP Adjustments: Acquisitions and divestitures
1.0
-
Organic
(1.9
)
2.4
Currency
(1.2
)
(2.5
)
Total Non-GAAP Adjustments:
(2.1
)
(0.1
)
Non-GAAP Revenue
$
42.5
$
44.6
Revenue Growth
-4.7
%
-0.2
%
Organic Revenue Growth
-4.3
%
5.4
%
(1) Bruker Scientific Instruments (BSI) revenue reflects the sum
of the BSI Life Science and BSI Nano Segments as presented in our
2019 Form 10-K.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200506005981/en/
Miroslava Minkova Director, Investor Relations & Corporate
Development Bruker Corporation T: +1 (978) 663–3660, ext. 1479 E:
Investor.Relations@bruker.com
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