Bruker Corporation (NASDAQ: BRKR) today reported financial
results for its fourth quarter and full year ended December 31,
2014.
Bruker’s revenues for the fourth quarter of 2014 were $508.0
million, a decline of 8.0 percent compared to the fourth quarter of
2013. Excluding a 1.3 percent net negative effect from acquisitions
& divestitures, and a 6.2 percent negative effect from changes
in foreign exchange rates, Bruker reported a year-over-year organic
revenue decline of 0.5 percent in the fourth quarter of 2014.
Bruker reported fourth quarter 2014 GAAP operating income of
$44.5 million, compared to $61.0 million in the fourth quarter of
2013. Fourth quarter 2014 GAAP earnings per diluted share (EPS)
were $0.15, compared to EPS of $0.21 in the fourth quarter of
2013.
On a non-GAAP basis, Bruker reported fourth quarter 2014
operating income of $63.7 million, compared to $81.3 million in the
fourth quarter of 2013. Fourth quarter 2014 non-GAAP EPS were
$0.30, compared to $0.31 in the fourth quarter of 2013. A
reconciliation of GAAP to non-GAAP financial measures is provided
in the Company’s financial tables accompanying this press
release.
For the full year 2014, Bruker’s revenues declined 1.7 percent
to $1.81 billion, compared to $1.84 billion for the full year 2013.
Excluding a 0.1 percent net positive effect from acquisitions &
divestitures, and a 1.4 percent negative effect from changes in
foreign exchange rates, Bruker reported a year-over-year organic
revenue decline of 0.4 percent for the full year 2014.
Bruker reported GAAP operating income of $105.4 million for the
full year 2014, compared to $148.2 million in 2013. The Company’s
GAAP EPS for 2014 were $0.33, compared to $0.48 for 2013.
On a non-GAAP basis, Bruker reported operating income of $184.4
million for the full year 2014, compared to $205.5 million for
2013. Non-GAAP EPS for 2014 were $0.75, compared to $0.77 for
2013.
“Our fourth quarter performance was in-line with our
expectations. We experienced soft demand in our Nuclear Magnetic
Resonance and X-Ray businesses for most of 2014, and changes in
foreign exchange rates continued to negatively impact our revenues
and earnings,” said Frank Laukien, President and CEO of Bruker. “In
the second half of 2014, we implemented programs to improve our
financial performance, including the divestitures of two Chemical
& Applied Markets (CAM) division product lines, the transfer of
the remaining CAM product lines into the Daltonics division, and
the closure of CAM’s Fremont, California manufacturing site.
“Looking ahead, we are further expanding our operational
initiatives in 2015, with a focus on optimizing the cost structure
and manufacturing footprint of our Bruker BioSpin Group. While we
expect that currency will continue to negatively affect our
revenues and earnings, we believe that we can increase our full
year 2015 operating margin as a result of the initiatives that we
have executed over the last two years.”
Bruker will provide a 2015 revenue and earnings outlook on its
conference call scheduled at 4:45 p.m. ET today.
“Over the past year, we have strengthened Bruker’s foundation by
improving key business processes, implementing new systems, and
building new organizational and functional capabilities,” said
Charles Wagner, Chief Financial Officer of Bruker. “Although market
weakness and currency headwinds have hampered our ability to
translate this progress into improved financial performance, we
remain convinced that we are taking the right actions to achieve
operational and commercial excellence, to expand our margins, and
to drive long-term value for our stakeholders.”
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 Fourth Quarter 2014 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: 10059457. The replay will be available beginning
one hour after the end of the conference through February 27,
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, 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, 2013 and our
quarterly report on Form 10-Q for the period ended September 30,
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) December 31,
December 31, 2014 2013 ASSETS
Current assets: Cash and cash equivalents $ 319.5 $ 438.7
Short-term investments 178.0 - Accounts receivable, net 293.2 307.6
Inventories 477.4 589.8 Other current assets 98.2
95.8 Total current assets 1,366.3 1,431.9 Property, plant
and equipment, net 249.9 299.5 Intangible and other long-term
assets 248.6 256.9 Total assets $ 1,864.8 $
1,988.3
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Current portion of long-term debt $ 0.8 $ 0.7
Accounts payable 76.0 74.8 Customer advances 189.5 258.6 Other
current liabilities 316.4 314.5 Total current
liabilities 582.7 648.6 Long-term debt 354.2 354.3 Other
long-term liabilities 156.2 135.2 Total shareholders' equity
771.7 850.2 Total liabilities and
shareholders' equity $ 1,864.8 $ 1,988.3
Bruker Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended Twelve Months Ended (in
millions, except per share amounts) December 31,
December 31, 2014 2013
2014 2013
Revenues $ 508.0 $ 552.1 $ 1,808.9 $ 1,839.4 Cost of revenues
292.2 316.2 1,045.6
1,034.2 Gross profit 215.8 235.9 763.3 805.2
Operating expenses: Selling, general and administrative
118.5 118.3 451.0 437.9 Research and development 41.6 49.1 174.2
190.5 Impairment of assets 4.6 - 11.5 - Other charges, net
6.6 7.5 21.2 28.6
Total operating expenses 171.3 174.9
657.9 657.0 Operating income
44.5 61.0 105.4 148.2 Interest and other income (expense),
net (1.0 ) (7.2 ) (4.1 ) (23.6 )
Income before income taxes and noncontrolling interest in
consolidated subsidiaries 43.5 53.8 101.3 124.6 Income tax
provision 17.0 17.9 41.7
42.8 Consolidated net income 26.5 35.9 59.6
81.8 Net income attributable to noncontrolling interests in
consolidated subsidiaries 0.4 0.7
2.9 1.7 Net income attributable to
Bruker Corporation $ 26.1 $ 35.2 $ 56.7 $ 80.1
Net income per common share attributable to Bruker
Corporation shareholders: Basic $ 0.16 $ 0.21 $ 0.34
$ 0.48 Diluted $ 0.15 $ 0.21 $ 0.33
$ 0.48 Weighted average common shares
outstanding: Basic 168.2 167.2
167.8 166.5 Diluted 169.6
169.0 169.5 168.5
Bruker Corporation CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (unaudited)
(in millions) Three Months
Ended December 31, Twelve Months Ended December 31,
2014 2013
2014 2013 Cash flows from
operating activities: Consolidated net income $ 26.5 $ 35.9 $ 59.6
$ 81.8 Adjustments to reconcile consolidated net income to cash
flows from operating activities: Depreciation and amortization 12.1
15.9 59.7 61.3 Write-down of demonstration inventories to net
realizable value 5.6 8.7 28.2 32.7 Impairment of assets 4.6 - 11.5
- Stock-based compensation expense 2.3 1.8 9.4 6.6 Deferred income
taxes (9.2 ) 15.5 (9.2 ) 7.4 Gain on disposal of product line 0.7 -
(8.3 ) (0.9 ) Other non-cash expenses, net (1.5 ) 0.9 2.7 2.1
Changes in operating assets and liabilities, net of acquisitions
and divestitures: Accounts receivable (36.0 ) (9.6 ) (14.5 ) (19.3
) Inventories 51.5 40.6 4.6 5.7 Accounts payable and accrued
expenses (15.7 ) 1.3 9.0 7.0 Income taxes payable, net 20.4 (1.1 )
5.6 (28.7 ) Deferred revenue 10.7 3.3 12.9 4.6 Customer advances
(13.1 ) 6.8 (48.2 ) (12.1 ) Other changes in operating assets and
liabilities, net 10.4 11.4 (8.7
) (3.2 ) Net cash provided by operating activities
69.3 131.4 114.3 145.0
Cash flows from investing activities: Purchases of
short-term investments (90.8 ) - (211.6 ) - Maturity of short-term
investments 19.0 - 19.0 Cash paid for acquisitions, net of cash
acquired - - (3.9 ) (11.6 ) Proceeds from disposal of product line
12.5 - 25.3 0.5 Purchases of property, plant and equipment (7.1 )
(9.0 ) (33.8 ) (50.3 ) Proceeds from sales of property, plant and
equipment 0.2 0.6 3.1
1.4 Net cash used in investing activities
(66.2 ) (8.4 ) (201.9 ) (60.0 ) Cash
flows from financing activities: Proceeds from revolving lines of
credit - - - 19.5 Repayment of other debt, net (0.1 ) (0.8 ) (0.8 )
(1.6 ) Proceeds from issuance of common stock, net 0.6 0.2 7.9 8.2
Changes in restricted cash - 2.3 0.7 1.0 Cash payments to
noncontrolling interest - - (1.1
) (0.6 ) Net cash provided by financing activities
0.5 1.7 6.7 26.5
Effect of exchange rate changes on cash and cash equivalents
(13.3 ) 7.2 (38.3 ) 16.6 Net
change in cash and cash equivalents (9.7 ) 131.9 (119.2 ) 128.1
Cash and cash equivalents at beginning of period 329.2
306.8 438.7 310.6
Cash and cash equivalents at end of period $ 319.5 $ 438.7
$ 319.5 $ 438.7
Bruker Corporation
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES* (unaudited)
(in millions, except per share
amounts)
Three Months Ended December 31,
Twelve Months Ended December
31,
2014
2013
2014
2013
Reconciliation of Non-GAAP Operating
Income, Non-GAAPProfit Before Tax, Non-GAAP Net Income, and
Non-GAAP EPS
GAAP Operating Income $ 44.5 $ 61.0 $ 105.4 $ 148.2
Non-GAAP Adjustments: Restructuring Costs 6.8 11.7 36.1 25.3
Acquisition-Related Costs 1.0 2.3 4.0 4.5 Purchased Intangible
Amortization 5.1 5.4 20.2 20.7 Other Costs 6.3
0.9 18.7 6.8 Total Non-GAAP
Adjustments: $ 19.2 $ 20.3 $ 79.0 $ 57.3
Non-GAAP Operating Income $ 63.7 $ 81.3 $
184.4 $ 205.5 Non-GAAP Operating Margin 12.5 % 14.7 % 10.2 % 11.2 %
Non-GAAP Interest & Other Income (Expense), net (0.3 )
(7.2 ) (10.0 ) (26.0 )
Non-GAAP Profit Before Tax 63.4 74.1
174.4 179.5 Non-GAAP Income Tax Provision (12.7 ) (21.2 )
(43.8 ) (48.5 ) Non-GAAP Tax Rate 20.0 % 28.6 % 25.1 % 27.0 %
Minority Interest (0.4 ) (0.7 ) (2.9 ) (1.7 )
Non-GAAP Net Income Attributable to Bruker 50.3 52.2 127.7
129.3 Weighted Average Shares Outstanding (Diluted) 169.6
169.0 169.5 168.5
Non-GAAP Earnings
Per Share $ 0.30 $ 0.31 $ 0.75 $ 0.77
Reconciliation of GAAP
and Non-GAAP Gross Profit
GAAP Gross Profit $ 215.8 $ 235.9
$ 763.3 $ 805.2 Non-GAAP Adjustments: Restructuring Costs 2.7 7.1
25.0 7.1 Acquisition-Related Costs 0.2 0.3 1.1 0.9 Purchased
Intangible Amortization 4.5 5.0
18.3 19.3 Total Non-GAAP Adjustments:
7.4 12.4 44.4 27.3
Non-GAAP Gross Profit $ 223.2 $ 248.3 $ 807.7 $ 832.5
Non-GAAP Gross Margin 43.9 %
45.0 % 44.7 % 45.3
%
Reconciliation of GAAP and Non-GAAP
Interest & Other Income (Expense), net
GAAP Interest &
Other Income (Expense), net $ (1.0 ) $ (7.2 ) $ (4.1 ) $ (23.6
) Non-GAAP Adjustments: Insurance Settlement - - - (1.5 ) Sale of
Product Line 0.7 - (8.3 ) (0.9 ) Other - -
2.4 - Total Non-GAAP
Adjustments: 0.7 - (5.9 )
(2.4 )
Non-GAAP Interest & Other Income (Expense), net
$ (0.3 ) $ (7.2 )
$ (10.0 ) $ (26.0 )
* 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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