Bruker Corporation (NASDAQ: BRKR) today reported financial
results for its second quarter ended June 30, 2013.
Revenues for the second quarter of 2013 grew by 8.1 percent to
$454.9 million, compared to $420.7 million in the second quarter of
2012. Excluding a 0.8 percent negative effect from changes in
foreign exchange rates and a 0.6 percent net negative effect from
acquisitions and divestitures, Bruker generated organic revenue
growth of 9.5 percent in the second quarter of 2013.
Bruker reported second quarter 2013 GAAP operating income of
$43.5 million, or 9.6% of revenues, compared to $22.1 million, or
5.3% of revenues in the second quarter of 2012. Second quarter 2013
GAAP earnings per diluted share (EPS) were $0.14, compared to EPS
of $0.06 in the second quarter of 2012.
On a non-GAAP basis, Bruker reported second quarter 2013
operating income of $53.3 million, or 11.7% of revenues, compared
to $33.0 million, or 7.8% of revenues, in the second quarter of
2012. Second quarter 2013 non-GAAP EPS were $0.18, compared to
$0.12 in the second quarter of 2012. A reconciliation of GAAP to
non-GAAP financial measures is provided in the Company’s financial
tables accompanying this press release.
For the first six months of 2013, Bruker’s revenues grew 2.7
percent to $848.3 million, compared to $826.3 million in the first
six months of 2012. Excluding a 1.1 percent unfavorable impact from
changes in foreign exchange rates and a 0.5 percent net negative
effect from acquisitions and divestitures, the Company generated
4.3 percent organic revenue growth for the first six months of
2013.
Bruker reported GAAP operating income of $55.7 million, or 6.6%
of revenues, for the first six months of 2013, compared to $56.5
million, or 6.8% of revenues, for the first six months of 2012. The
Company’s GAAP EPS for the first six months of 2013 were $0.17,
compared to $0.15 in the first six months of 2012.
On a non-GAAP basis, Bruker reported operating income of $76.9
million, or 9.1% of revenues, for the first six months of 2013,
compared to $76.6 million, or 9.3% of revenues, for the first six
months of 2012. Non-GAAP EPS for the first six months of 2013 were
$0.26, which was unchanged from the first six months of 2012.
“Our growth and profitability rebounded in the second quarter,
after a weak first quarter of 2013,” said Frank Laukien, President
and CEO of Bruker. “We continue to experience significant
variability in our businesses and markets, with weakness in some
key markets partially offset by diversified pockets of growth. At
the mid-point of the year, we believe we are on track to deliver
our full-year 2013 guidance for revenue growth and EPS, and we
remain focused on implementing programs that will drive operational
improvement and profitable growth.”
From a segment perspective, Bruker Scientific Instruments (BSI)
reported organic year-over-year revenue growth of 7.7 percent in
the second quarter of 2013, while Bruker’s Energy and
Superconducting Technologies (BEST) segment reported organic
revenue growth of 40.0 percent. BEST’s revenue and operating margin
performance in the second quarter of 2013 reflects $5.7 million of
license milestone revenue related to the previously announced
Rosatom contract.
“Bruker’s strong growth in second quarter operating
profitability was the result of controlled operating spending and a
return to revenue growth after a slow start to the year,” said
Charles Wagner, Chief Financial Officer of Bruker. “For the first
six months of 2013, our non-GAAP operating margin was slightly
lower year-over-year due primarily to the negative effects of
foreign currency. As we move into the second half of the year, we
are focused on delivering the benefits from the productivity
initiatives we announced earlier in the year, as well as
identifying new programs to improve our profitability in the
future.”
Bruker is maintaining its updated financial guidance for 2013,
issued on May 2, 2013. The Company expects to generate reported
revenue growth of 2 to 3 percent for the full year 2013. Full year
2013 non-GAAP EPS is expected to be in the range of $0.80 to $0.83,
with a significant portion of the earnings occurring in the fourth
quarter.
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 Time today. To listen to the
webcast, investors can go to http://ir.bruker.com and click on the
live webcast 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 2nd
Quarter 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: 10030762.
The replay will be available beginning one hour after the end of
the conference through August 2, 2013 at 5:00 pm ET.
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 initiates
restructuring activities 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, 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, the outcome of any actions that may be taken by
government agencies in connection with FCPA compliance matters we
have disclosed to them, 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, 2012, our most recent quarterly report 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.
Bruker Corporation CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited)
Three Months Ended Six
Months Ended (in millions, except per share amounts)
June 30, June 30, 2013 2012 2013
2012 Revenues $ 454.9 $ 420.7 $ 848.3 $ 826.3 Cost of
revenues 253.3 232.5 472.2
447.7 Gross profit 201.6 188.2 376.1
378.6 Operating Expenses: Selling, general and
administrative 107.1 110.6 213.9 215.0 Research and development
46.5 51.9 95.9 100.1 Other charges 4.5 3.6
10.6 7.0 Total operating
expenses 158.1 166.1 320.4
322.1 Operating income 43.5 22.1 55.7
56.5 Interest and other income (expense), net (7.8 )
(2.8 ) (11.7 ) (10.3 )
Income before income taxes and
noncontrolling interest in consolidated subsidiaries
35.7 19.3 44.0 46.2 Income tax provision 12.4
9.4 15.0 21.2
Consolidated net income 23.3 9.9 29.0 25.0
Net income attributable to noncontrolling
interests in consolidated subsidiaries
0.4 - 0.7 -
Net income attributable to Bruker Corporation $ 22.9 $ 9.9
$ 28.3 $ 25.0
Net income per common share attributable
to Bruker Corporation shareholders:
Basic $ 0.14 $ 0.06 $ 0.17 $ 0.15
Diluted $ 0.14 $ 0.06 $ 0.17 $ 0.15
Weighted average common shares outstanding: Basic
166.8 166.0 166.6 165.9
Diluted 168.4 167.1 168.2
167.0
Bruker Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in millions) June
30, December 31, 2013 2012
ASSETS
Current assets: Cash and cash equivalents $ 250.9 $ 310.6 Accounts
receivable, net 300.5 289.3 Inventories 601.8 611.5 Other current
assets 110.6 98.3
Total current assets
1,263.8 1,309.7 Property, plant and equipment, net 287.8
283.6 Intangible and other long-term assets 250.2
263.1 Total assets $ 1,801.8 $ 1,856.4
LIABILITIES
AND SHAREHOLDERS' EQUITY Current liabilities: Current
portion of long-term debt $ 1.1 $ 1.3 Accounts payable 69.5 69.6
Customer advances 237.6 267.3 Other current liabilities
294.6 343.6 Total current liabilities 602.8 681.8
Long-term debt 335.4 335.9 Other long-term liabilities 140.9 129.0
Total shareholders' equity 722.7 709.7
Total liabilities and shareholders' equity $ 1,801.8 $ 1,856.4
Bruker Corporation CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)
(in
millions) Three Months Ended June 30, Six Months
Ended June 30, 2013 2012 2013 2012
Cash flows from operating activities: Consolidated net income $
23.3 $ 9.9 $ 29.0 $ 25.0
Adjustments to reconcile consolidated net
income to cash flows from operating activities:
Depreciation and amortization 15.0 15.0 30.2 28.6 Write-down of
demonstration inventories to net realizable value 8.2 7.3 16.0 14.1
Stock-based compensation expense 1.4 1.9 3.2 3.8 Deferred income
taxes - 0.9 (2.6 ) (0.4 ) Other non-cash expenses, net 0.6 (0.9 )
(0.6 ) 1.1 Changes in operating assets and liabilities, net of
acquisitions: Accounts receivable (29.6 ) 7.7 (20.9 ) 36.6
Inventories 15.1 (6.1 ) (21.9 ) (58.6 ) Accounts payable and
accrued expenses (6.3 ) 4.5 (14.1 ) (4.3 ) Income taxes payable
(8.9 ) (1.2 ) (12.9 ) (15.5 ) Deferred revenue 2.1 (2.1 ) 5.0 (5.8
) Customer advances (25.6 ) (3.5 ) (21.9 ) 22.2 Other changes in
operating assets and liabilities, net (2.0 ) 3.7
(13.4 ) (4.9 ) Net cash provided by (used) in
operating activities (6.7 ) 37.1 (24.9
) 41.9 Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired (1.3 ) - (2.1 )
(21.7 ) Disposal of product line - - 0.5 - Purchases of property,
plant and equipment (16.5 ) (18.8 ) (31.1 ) (30.4 ) Sales of
property, plant and equipment - 0.9
0.6 1.7 Net cash used in investing
activities (17.8 ) (17.9 ) (32.1 )
(50.4 ) Cash flows from financing activities: Repayments of
revolving lines of credit - - - (216.5 ) Proceeds from Note
Purchase Agreement - - - 240.0 Repayment of other debt, net 0.2 1.5
(0.5 ) (6.3 ) Payment of deferred financing costs - - - (1.4 )
Proceeds from issuance of common stock, net 0.4 1.6 4.5 3.4 Changes
in restricted cash 1.8 0.2 (1.3 ) (1.1 ) Cash payments to
noncontrolling interest - (0.6 ) -
(0.6 ) Net cash provided by financing activities
2.4 2.7 2.7 17.5
Effect of exchange rate changes on cash and cash equivalents
3.6 (11.1 ) (5.4 ) (14.7 ) Net
change in cash and cash equivalents (18.5 ) 10.8 (59.7 ) (5.7 )
Cash and cash equivalents at beginning of period 269.4
229.5 310.6 246.0
Cash and cash equivalents at end of period $ 250.9 $ 240.3
$ 250.9 $ 240.3
Bruker
Corporation RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES* (unaudited)
(in millions, except per share
amounts) Three Months Ended June 30, Six Months Ended
June 30, 2013 2012 2013 2012
Reconciliation to Non-GAAP Operating
Income, Non-GAAPProfit Before Tax, Non-GAAP Net Income, and
Non-GAAP EPS
GAAP Operating Income $ 43.5 $ 22.1 $ 55.7 $ 56.5
Non-GAAP Adjustments: Restructuring Costs 1.8 0.1 5.0 0.3
Acquisition-Related Costs 0.3 2.4 0.9 3.2 Purchased Intangible
Amortization 5.1 5.6 10.2 10.7 Other Costs 2.6
2.8 5.1 5.9 Total Non-GAAP
Adjustments: $ 9.8 $ 10.9 $ 21.2 $ 20.1
Non-GAAP Operating Income $ 53.3 $ 33.0 $ 76.9 $ 76.6
Non-GAAP Operating Margin 11.7 % 7.8 % 9.1 % 9.3 % Interest
& Other Income (Expense), net (9.3 ) (2.8 ) (14.1 ) (10.3 )
Non-GAAP Profit Before Tax 44.0 30.2 62.8 66.3 Income
Tax Provision (13.7 ) (9.7 ) (18.8 ) (22.1 ) Non-GAAP Tax Rate 31.1
% 32.1 % 29.9 % 33.3 % Minority Interest (0.4 ) - (0.7 ) 0.0
Non-GAAP Net Income Attributable to Bruker 29.9 20.5
43.3 44.2 Weighted Average Shares Outstanding (Diluted)
168.4 167.1 168.2 167.0
Non-GAAP
Earnings Per Share $ 0.18 $ 0.12 $ 0.26 $
0.26
Reconciliation of GAAP to Non-GAAP Gross Profit
GAAP Gross
Profit $ 201.6 $ 188.2 $ 376.1 $ 378.6 Non-GAAP Adjustments:
Restructuring Costs - 0.1 - 0.3 Acquisition-Related Costs 0.2 1.6
0.4 2.0 Purchased Intangible Amortization 4.7 4.7 9.5 9.0 Other
Costs - - - 0.1
Total Non-GAAP Adjustments: 4.9 6.4
9.9 11.4
Non-GAAP Gross
Profit $ 206.50 $ 194.60 $ 386.00 $ 390.00 Non-GAAP Gross
Margin 45.4 % 46.3
% 45.5 % 47.2 %
Reconciliation of GAAP to
Non-GAAP Interest & Other Income (Expense), net
GAAP
Interest & Other Income (Expense), net $ (7.8 ) $ (2.8 ) $
(11.7 ) $ (10.3 ) Non-GAAP Adjustments: Insurance Settlement (1.5 )
- (1.5 ) - Sale of Product Line - -
(0.9 ) - Total Non-GAAP Adjustments:
(1.5 ) - (2.4 ) -
Non-GAAP
Interest & Other Income (Expense), net
$ (9.3 ) $ (2.8 ) $ (14.1 )
$ (10.3 ) * Please refer to our press
release for a full explanation for the use of non-GAAP measures.
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