BRKR Bruker Corporation

Bruker BioSciences Corporation (NASDAQ: BRKR) today reported third quarter 2005 revenue of $70.7 million, a 6.4% increase from revenue of $66.5 million in the third quarter of 2004. For the nine months ended September 30, 2005, revenue increased 9.2% to $217.0 million, compared to $198.8 million for the same period last year. Revenue growth during the three and nine months ended September 30, 2005 included favorable foreign currency effects of 0.4% and 2.5%, respectively. Third quarter 2005 operating income was $2.9 million, compared to an operating loss of ($0.1) million in the third quarter of 2004. Net income in the third quarter of 2005 was $1.1 million, or $0.01 per diluted share, compared to a net loss of ($3.1) million, or ($0.03) per diluted share, in the third quarter of 2004. For the nine months ended September 30, 2005, operating income was $6.4 million, and net income was $1.8 million, or $0.02 per diluted share, compared to an operating loss of ($3.7) million, and a net loss of ($7.0) million, or ($0.08) per diluted share, for the comparable period in 2004. During the third quarter 2005, positive operating cash flow of $3.9 million increased our cash position to $95.3 million. For the nine months ended September 30, 2005, we had positive operating cash flow of $25.6 million. Commenting on the quarter, Frank Laukien, President and CEO, said: "We continue to make progress with our various on-going gross margin improvement initiatives and continued expense control, which resulted in improved profitability during the third quarter, both year-over-year and sequentially. I also believe we are well positioned in the markets we serve with our customer-oriented culture, strong technology and IP base, and performance-leading products. This year, we have continued to invest in new products and integrated bio-analytical solutions, as well as in additional marketing and customer support capabilities. In 2006, we also expect top- and bottom-line contributions from our recently announced X-ray software and microanalysis acquisitions, which are expected to close in the near future." William Knight, Chief Financial Officer, commented: "Improvements in our profitability remain our top priority and these efforts continue to result in improved operating and net income. I am pleased with our results in the third quarter, and view our third quarter and year-to-date financial performance as part of a successful turn-around and clear positive trend, as we continue our progress towards our longer term financial goals. I am also encouraged by our positive operating cash flow of $25 million during the first three quarters of 2005, and our strengthened balance sheet with significant reductions in accounts receivables, inventory and outstanding debt balances. OPERATING BUSINESSES Set forth below is selected financial information for Bruker BioSciences' two operating businesses: Bruker Daltonics (life-science mass spectrometry and NBC detection business) and Bruker AXS (x-ray analysis business): BRUKER DALTONICS In the third quarter of 2005, revenue for the Bruker Daltonics business increased 8.0% to $36.9 million, from $34.2 million in the third quarter of 2004. For the nine months ended September 30, 2005, revenue for the Bruker Daltonics business increased 8.4% to $117.0 million, from $107.9 million for the same period last year. For the nine months ended September 30, 2005, Bruker Daltonics' revenue was derived 70% from life-science mass spectrometry systems, 10% from substance detection systems, and 20% from after-market sales. EBITDA was $4.2 million for the third quarter of 2005, compared to $2.6 million for the third quarter of 2004. EBITDA was $10.8 million for the nine months ended September 30, 2005, compared to $5.5 million for the same period last year. BRUKER AXS In the third quarter of 2005, revenue for the Bruker AXS business increased 5.2% to $33.9 million, from $32.3 million in the third quarter of 2004. For the nine months ended September 30, 2005, revenue for the Bruker AXS business increased 10.6% to $100.5 million, from $90.9 million for the same period last year. For the nine months ended September 30, 2005, Bruker AXS' revenue was derived 75% from systems sales and 25% from after-market sales. EBITDA was $1.5 million in the third quarter of 2005, compared to $0.1 million in the third quarter of 2004. EBITDA was $4.6 million for the nine months ended September 30, 2005, compared to ($0.8) million for the same period last year. USE OF NON-GAAP FINANCIAL MEASURES In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use the non-GAAP measure of EBITDA. EBITDA is defined as US GAAP operating income (loss) excluding depreciation and amortization expense. We believe that the inclusion of this non-GAAP measure 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. However, the non-GAAP financial measure included in this press release is not meant to be a better presentation or a substitute for results of operations prepared in accordance with GAAP. Reconciliations of this non-GAAP financial measure to the most directly comparable GAAP financial measures are set forth in the accompanying tables. EARNINGS CONFERENCE CALL Bruker BioSciences will host an operator-assisted earnings conference call at 5 p.m. Eastern Standard Time on Wednesday, November 2, 2005. To listen to the webcast, investors can go to www.bruker-biosciences.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 888-339-2688, or 617-847-3007 outside the US and Canada. Investors should refer to the Bruker BioSciences Quarterly 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 617-801-6888 outside the US and Canada, and then entering replay pass code 39147513. ABOUT BRUKER BIOSCIENCES Bruker BioSciences Corporation, headquartered in Billerica, Massachusetts, is the publicly traded parent company of Bruker Daltonics Inc. and Bruker AXS Inc. Bruker AXS is a leading developer and provider of life science and advanced materials research tools based on x-ray technology. Bruker Daltonics is a leading developer and provider of innovative life science tools based on mass spectrometry. Bruker Daltonics also offers a broad line of nuclear, biological and chemical (NBC) detection products for defense and homeland security. For more information, please visit www.bruker-biosciences.com. CAUTIONARY STATEMENT 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 a number of risks and uncertainties. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, risks and uncertainties relating to the Company's reorganization strategies, integration risks, failure of conditions, technological approaches, product development, market acceptance, cost and pricing of the Company's products, exposure to currency fluctuations, changes in governmental regulations, capital spending and government funding policies, FDA and other regulatory approvals to the extent applicable, competition, the intellectual property of others, patent protection and litigation. These and other factors are identified and described in more detail in our filings with the SEC, including, without limitation, our respective annual reports on Form 10-K for the year ended December 31, 2004, our most recent quarterly reports on Form 10-Q, and our current reports on Form 8-K. We disclaim any intent or obligation to update these forward-looking statements. Condensed consolidated statements of operations, operating business information, and balance sheets follow for Bruker BioSciences Corporation. -0- *T Bruker BioSciences Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Product revenue $ 61,062 $ 58,413 $188,609 $174,707 Service revenue 8,747 7,430 26,479 22,855 Other revenue 928 634 1,928 1,216 --------- --------- --------- --------- Total revenue 70,737 66,477 217,016 198,778 Cost of product revenue 35,452 32,960 107,992 103,815 Cost of service revenue 4,866 4,570 16,681 14,205 --------- --------- --------- --------- Total cost of revenue 40,318 37,530 124,673 118,020 --------- --------- --------- --------- Gross profit margin 30,419 28,947 92,343 80,758 Operating Expenses: Sales and marketing 11,845 12,952 37,382 38,816 General and administrative 5,677 5,257 16,632 14,515 Research and development 9,969 10,824 31,951 31,091 --------- --------- --------- --------- Total operating expenses 27,491 29,033 85,965 84,422 --------- --------- --------- --------- Operating income (loss) 2,928 (86) 6,378 (3,664) Interest and other income (expense), net 577 (1,902) 1,001 (2,768) --------- --------- --------- --------- Income (loss) before income tax provision and minority interest in consolidated subsidiaries 3,505 (1,988) 7,379 (6,432) Income tax provision 2,398 955 5,468 395 --------- --------- --------- --------- Income (loss) before minority interest in consolidated subsidiaries 1,107 (2,943) 1,911 (6,827) Minority interest in consolidated subsidiaries 28 115 131 145 --------- --------- --------- --------- Net income (loss) $ 1,079 $ (3,058) $ 1,780 $ (6,972) ========= ========= ========= ========= Net income (loss) per share: Basic $ 0.01 $ (0.03) $ 0.02 $ (0.08) ========= ========= ========= ========= Diluted $ 0.01 $ (0.03) $ 0.02 $ (0.08) ========= ========= ========= ========= Weighted average shares outstanding: Basic 89,476 89,456 89,473 88,156 ========= ========= ========= ========= Diluted 89,669 89,456 89,620 88,156 ========= ========= ========= ========= Bruker BioSciences Corporation BRUKER DALTONICS SELECTED OPERATING BUSINESS INFORMATION (in thousands) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Total revenue $ 36,949 $ 34,218 $116,954 $107,928 ========= ========= ========= ========= Operating income $ 2,946 $ 1,532 $ 6,894 $ 1,784 Depreciation and amortization 1,269 1,020 3,930 3,728 ---------- --------- --------- --------- EBITDA $ 4,215 $ 2,552 $ 10,824 $ 5,512 ========= ========= ========= ========= Bruker BioSciences Corporation BRUKER AXS SELECTED OPERATING BUSINESS INFORMATION (in thousands) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Total revenue $ 33,938 $ 32,259 $100,520 $ 90,851 ========= ========= ========= ========= Operating income (loss) $ 595 $ (775) $ 1,836 $ (3,541) Depreciation and amortization 930 912 2,722 2,760 ---------- --------- --------- --------- EBITDA $ 1,525 $ 137 $ 4,558 $ (781) ========= ========= ========= ========= Bruker BioSciences Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2005 2004 ------------- ------------- (unaudited) ASSETS Current assets: Cash and short-term investments $ 95,337 $ 77,691 Accounts receivable, net 49,370 57,792 Due from affiliated companies 5,920 9,530 Inventories 99,309 107,748 Other current assets 13,103 18,530 ------------- ------------- Total current assets 263,039 271,291 Property and equipment, net 73,472 84,990 Intangible and other assets 14,835 15,266 ------------- ------------- Total assets $ 351,346 $ 371,547 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 10,960 $ 12,205 Accounts payable 14,804 22,652 Due to affiliated companies 2,857 3,026 Other current liabilities 80,070 73,277 ------------- ------------- Total current liabilities 108,691 111,160 Long-term debt 21,821 27,763 Other long-term liabilities 13,593 15,156 Minority interest in subsidiaries 324 193 Total shareholders' equity 206,917 217,275 ------------- ------------- Total liabilities and shareholders' equity $ 351,346 $ 371,547 ============= ============= *T