Bruker Corporation (NASDAQ: BRKR) today reported its financial
results for the three and six months ended June 30, 2008. On
February 26, 2008, Bruker BioSciences Corporation closed its
acquisition of the Bruker BioSpin Group, and renamed itself Bruker
Corporation. Under US GAAP, this transaction is accounted for as an
acquisition of businesses under common control, and as a result all
one-time transaction costs are expensed in the period in which they
are incurred, rather than being added to goodwill. In addition,
expenses incurred subsequent to the consummation of the
acquisition, such as interest expenses incurred on acquisition
related debt, are not reflected in the financial results of periods
prior to the date of the acquisition, as they typically would be in
pro-forma financials in acquisitions of unrelated parties. After
the closing of the transaction all historical financial statements
are required to be restated by combining the historical
consolidated financial statements of Bruker BioSciences Corporation
with those of the Bruker BioSpin Group. Accordingly, the financial
results for the three and six months ended June 30, 2008 and 2007,
included within this release, represent the combined historical
consolidated financial statements of Bruker BioSciences Corporation
with those of the Bruker BioSpin Group. Financial Results In the
second quarter of 2008, revenue increased 31% to $311.5 million,
compared to revenue of $238.3 million in the second quarter of
2007. Excluding the effects of foreign currency translation, second
quarter 2008 revenue increased by 19% year-over-year. Net income in
the second quarter of 2008 was $21.7 million, or $0.13 per diluted
share, compared to net income of $17.7 million, or $0.11 per
diluted share, in the second quarter of 2007. Included in net
income for the second quarter of 2008 were after-tax charges of
$0.3 million, or $0.00 per diluted share, for expenses related to
the acquisition of the Bruker BioSpin Group. For the six months
ended June 30, 2008, revenue increased 23% to $549.9 million,
compared to revenue of $445.9 million during the six months ended
June 30, 2007. Excluding the effects of foreign currency
translation, revenue for the six months ended June 30, 2008
increased by 13% year-over-year. Net income during the six months
ended June 30, 2008 was $21.0 million, or $0.13 per diluted share,
compared to net income of $32.0 million, or $0.20 per diluted
share, during the six months ended June 30, 2007. Included in GAAP
EPS for the six months ended June 30, 2008 were Bruker BioSpin
acquisition related expenses of ($0.04) per diluted share, foreign
exchange losses of ($0.04) per diluted share, and interest expense
on acquisition related debt of ($0.03) per diluted share, with a
cumulative effect of ($0.11) per diluted share. For comparison,
included in net income for the six months ended June 30, 2007 were
foreign exchange gains of $0.4 million, or $0.00 per diluted share,
and there were no acquisition related charges or acquisition
related interest expense. During the second quarter of 2008, Bruker
repaid $158 million of acquisition related debt. As of June 30,
2008, Bruker Corporation had a net debt position of $110.4 million.
Frank Laukien, President and Chief Executive Officer of Bruker
Corporation, commented:��For the second quarter of 2008, we are
very pleased with our strong revenue growth, as well as our
sequential and year-over-year improvements in net income and EPS.
In the first two quarters of 2008 we experienced significant
quarterly fluctuations in our growth rates and margins, and we
expect these fluctuations to continue going forward. In the first
half of 2008, while our GAAP operating income grew by 7%, our
adjusted operating income, which excludes expenses related to the
acquisition of Bruker BioSpin, grew 22%. However, our adjusted
operating margin as a percentage of revenue was essentially flat,
and therefore, in the third quarter of 2008, we intend to
reaccelerate our gross margin improvement programs and to implement
various streamlining and expense cutting steps with the objective
of obtaining better margin leverage from our top-line growth.� Bill
Knight, Bruker�s Chief Financial Officer, concluded: �While the
present global market environment is more challenging than a year
ago, we are optimistic that our various medium-term growth and
margin initiatives will continue our positive profitability trends
of the last three years. Our goal remains to drive our margins
towards and beyond industry standards, while maintaining rapid
revenue growth.� USE OF NON-GAAP FINANCIAL MEASURES In addition to
the financial measures prepared in accordance with generally
accepted accounting principles (GAAP), we use certain non-GAAP
financial measures, including adjusted operating income, adjusted
operating margin and adjusted EPS. Adjusted operating income and
margin excludes acquisition related charges and adjusted EPS
excludes acquisition related charges, interest expense on
acquisition related debt, and foreign exchange gains and losses. We
believe the inclusion of these non-GAAP measures 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 measures included in this press release are not meant to
be a better presentation or a substitute for results prepared in
accordance with GAAP. EARNINGS CONFERENCE CALL Bruker Corporation
will host an operator-assisted earnings conference call at 9 a.m.
Eastern Daylight Time on Thursday, July 31, 2008. To listen to the
webcast, investors can go to www.bruker.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 by calling 888-339-2688, or
+1-617-847-3007 outside the US and Canada. Investors should refer
to the Bruker Corporation Earnings Call. A telephone replay of the
conference call will be available one hour after the conference
call by dialing 888-286-8010, or +1-617-801-6888 outside the US and
Canada, and then entering replay pass code 76210411. 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 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, changes in governmental regulations,
intellectual property rights, litigation, and exposure to foreign
currency fluctuations. 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, 2007, 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 other than as
required by law. Bruker Corporation CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except per share data) � �
� � Three Months Ended June 30, Six Months Ended June 30, � 2008 �
2007 � 2008 � � 2007 � Product revenue $ 278,849 $ 210,177 $
485,884 $ 391,786 Service revenue 31,733 27,570 61,690 52,757 Other
revenue � 883 � 595 � 2,327 � � 1,335 Total revenue 311,465 238,342
549,901 445,878 � Cost of product revenue 161,931 120,810 266,832
217,459 Cost of service revenue � 20,896 � 17,617 � 41,302 � �
33,956 Total cost of revenue � 182,827 � 138,427 � 308,134 � �
251,415 � Gross profit margin 128,638 99,915 241,767 194,463 �
Operating Expenses: Sales and marketing 46,151 37,029 89,544 72,491
General and administrative 17,178 13,442 33,982 26,855 Research and
development 36,514 27,657 67,719 53,621 Acquisition related charges
� 360 � - � 6,153 � � - Total operating expenses � 100,203 � 78,128
� 197,398 � � 152,967 � Operating income 28,435 21,787 44,369
41,496 � Foreign exchange gains (losses), net 3,263 1,163 (8,956 )
452 Interest and other income (expense), net � 264 � 1,051 � 294 �
� 2,512 � Income before income tax provision and minority interest
in consolidated subsidiaries 31,962 24,001 35,707 44,460 Income tax
provision � 10,196 � 6,284 � 14,466 � � 12,307 � Income before
minority interest in consolidated subsidiaries 21,766 17,717 21,241
32,153 Minority interest in consolidated subsidiaries � 80 � 60 �
240 � � 146 Net income $ 21,686 $ 17,657 $ 21,001 � $ 32,007 � Net
income per share: Basic $ 0.13 $ 0.11 $ 0.13 � $ 0.20 Diluted $
0.13 $ 0.11 $ 0.13 � $ 0.20 � Weighted average shares outstanding:
Basic � 162,440 � 161,728 � 162,371 � � 161,050 Diluted � 165,438 �
164,343 � 165,308 � � 163,731 Bruker Corporation CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands) � � June 30, December
31, � 2008 � 2007 � � ASSETS � Current assets: Cash and short-term
investments $ 131,790 $ 344,554 Accounts receivable, net 164,236
185,217 Inventories 487,503 447,688 Other current assets � 75,697 �
57,238 Total current assets 859,226 1,034,697 � Property and
equipment, net 236,321 207,588 Intangible and other assets � 75,895
� 69,346 � Total assets $ 1,171,442 $ 1,311,631 � LIABILITIES AND
SHAREHOLDERS' EQUITY � Current liabilities: Short-term borrowings $
63,754 $ 35,591 Accounts payable 54,288 52,293 Customer deposits
220,254 233,466 Other current liabilities � 235,455 � 239,841 Total
current liabilities 573,751 561,191 � Long-term debt 178,396 8,605
Other long-term liabilities 109,713 105,445 Minority interest in
subsidiaries 753 538 � Total shareholders' equity � 308,829 �
635,852 � Total liabilities and shareholders' equity $ 1,171,442 $
1,311,631
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