Bruker Corporation (NASDAQ: BRKR) today reported financial
results for its first quarter ended March 31, 2013.
Revenues for the first quarter of 2013 declined by 3.0 percent
to $393.4 million, compared to $405.6 million in Q1 2012. Excluding
a 1.5 percent negative effect from changes in foreign exchange
rates and a 0.4 percent net negative effect from acquisitions and
divestitures, Bruker’s revenues declined year-over-year by 1.1
percent in the first quarter of 2013.
Bruker reported first quarter 2013 GAAP operating income of
$12.2 million, or 3.1% of revenues, compared to $34.4 million, or
8.5% of revenues in the first quarter 2012. First quarter 2013 GAAP
earnings per diluted share (EPS) were $0.03, compared to EPS of
$0.09 in the first quarter of 2012.
On a non-GAAP basis, Bruker reported first quarter 2013 non-GAAP
operating income of $23.6 million, or 6.0% of revenues, compared to
$43.6 million, or 10.7% of revenues, in Q1 of 2012. First quarter
2013 non-GAAP EPS were $0.08, compared to $0.14 in the first
quarter of 2012. A reconciliation of GAAP to non-GAAP financial
measures is provided in the Company’s financial tables accompanying
this press release.
“Our first quarter performance was adversely affected by changes
in foreign exchange rates, weakness in the semiconductor and data
storage industries, and temporary operational issues,” said Frank
Laukien, President and CEO of Bruker. “While we are disappointed
with our slow start to the year, our first quarter bookings grew
year-over-year, and we believe we can regain momentum in the
remaining quarters of 2013. As a result, excluding the effects of
currency, our full year 2013 outlook for organic revenue growth
remains unchanged.”
From a segment perspective, Bruker Scientific Instruments (BSI)
reported an organic revenue decline of 1.0 percent in the first
quarter of 2013, while Bruker’s Energy and Superconducting
Technologies (BEST) segment reported organic revenue growth of 3.4
percent, both year-over-year.
“Our first quarter 2013 performance was adversely affected by
changes in foreign exchange rates, particularly the steep drop in
the Japanese Yen,” said Charles Wagner, Chief Financial Officer of
Bruker. “Our business in Japan represents approximately ten percent
of our revenue, but only a small portion of our expenses.
Consequently, these rate changes not only lowered our revenue, but
also disproportionately reduced our profitability in the first
quarter. We remain focused on delivering the savings from the
productivity initiatives we announced previously. During Q1, we
accomplished two significant divestiture and outsourcing milestones
related to these programs, and we continue to develop other
opportunities to improve our operational efficiency.”
Bruker is updating its guidance for 2013 primarily as a result
of weakness in the Japanese Yen. The Company expects to see a
reduction of reported revenue growth rates by approximately 2
percent due to the recent Yen depreciation. This reduction is
expected to result in reported revenue growth of 2 to 3 percent for
the full year 2013. Bruker now expects to report full year 2013
non-GAAP EPS of between $0.80 and $0.83, a reduction of $0.08 from
previous guidance, also due primarily to the weaker Yen.
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
1-866-900-5380 or +1-706-758-6539, and referencing conference code:
49670707. A telephone replay of the conference call will be
available for two days, beginning approximately one hour after the
conference call concludes, and can be accessed by dialing
1-855-859-2056 or +1-404-537-3406, and then entering replay
passcode 49670707.
Use of Non-GAAP Financial Measures
The non-GAAP financial measures used for 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 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, and 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 BALANCE SHEETS
(unaudited) (in millions)
March 31, December 31, 2013 2012
ASSETS
Current assets: Cash and cash equivalents $ 269.4 $ 310.6 Accounts
receivable, net 273.4 289.3 Inventories 621.7 611.5 Other current
assets 113.0 98.3 Total current assets 1,277.5
1,309.7 Property, plant and equipment, net 279.7 283.6
Intangible and other long-term assets 254.7 263.1
Total assets $ 1,811.9 $ 1,856.4
LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Current
portion of long-term debt $ 1.1 $ 1.3 Accounts payable 75.8 69.6
Customer advances 263.1 267.3 Other current liabilities
303.2 343.6 Total current liabilities 643.2 681.8
Long-term debt 335.5 335.9 Other long-term liabilities 140.6 129.0
Total shareholders' equity 692.6 709.7
Total liabilities and shareholders' equity $ 1,811.9 $ 1,856.4
Bruker Corporation CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended (in millions, except per share
amounts) March 31, 2013 2012
Revenues $ 393.4 $ 405.6 Cost of revenues 218.9
215.2 Gross profit 174.5 190.4
Operating Expenses: Selling, general and administrative 106.8 104.4
Research and development 49.4 48.2 Other charges, net 6.1
3.4 Total operating expenses 162.3
156.0 Operating income 12.2 34.4
Interest and other income (expense), net (3.9 ) (7.5
)
Income before income taxes and
noncontrolling interest in consolidated subsidiaries
8.3 26.9 Income tax provision 2.6 11.8
Consolidated net income 5.7 15.1
Net income attributable to noncontrolling
interests in consolidated subsidiaries
0.3 - Net income attributable to Bruker
Corporation $ 5.4 $ 15.1 Net income per common
share attributable to Bruker Corporation shareholders: Basic $ 0.03
$ 0.09 Diluted $ 0.03 $ 0.09
Weighted average common shares outstanding: Basic 166.4
165.7 Diluted 168.1 166.9
Bruker Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in millions) Three Months
Ended March 31, 2013 2012 Cash flows from
operating activities: Consolidated net income $ 5.7 $ 15.1
Adjustments to reconcile consolidated net
income to cash flows from operating activities:
Depreciation and amortization 15.2 13.6 Write-down of demonstration
inventories to net realizable value 7.8 6.8 Stock-based
compensation expense 1.8 1.9 Deferred income taxes (2.6 ) (1.3 )
Other non-cash expenses, net (1.2 ) 2.0 Changes in operating assets
and liabilities, net of acquisitions: Accounts receivable 8.7 28.9
Inventories (37.0 ) (52.5 ) Accounts payable and accrued expenses
(7.8 ) (8.8 ) Income taxes payable (4.0 ) (14.3 ) Deferred revenue
2.9 (3.7 ) Customer advances 3.7 25.7 Other changes in operating
assets and liabilities, net (11.4 ) (8.6 ) Net cash
provided by (used in) operating activities (18.2 )
4.8 Cash flows from investing activities: Cash paid
for acquisitions, net of cash acquired (0.8 ) (21.7 ) Disposal of
product line 0.5 - Purchases of property, plant and equipment (14.6
) (11.6 ) Sales of property, plant and equipment 0.6
0.8 Net cash used in investing activities
(14.3 ) (32.5 ) 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 (0.7 )
(7.8 ) Payment of deferred financing costs - (1.4 ) Proceeds from
issuance of common stock, net 4.1 1.8 Changes in restricted cash
(3.1 ) (1.3 ) Net cash provided by financing
activities 0.3 14.8 Effect of exchange
rate changes on cash and cash equivalents (9.0 ) (3.6
) Net change in cash and cash equivalents (41.2 ) (16.5 ) Cash and
cash equivalents at beginning of period 310.6
246.0 Cash and cash equivalents at end of period $ 269.4
$ 229.5
Bruker Corporation
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES*
(unaudited) (in millions, except
per share amounts) Three Months Ended March 31,
2013 2012
Reconciliation to Non-GAAP Operating
Income, Non-GAAPInterest & Other Income (Expense), net,
Non-GAAP Profit BeforeTax, Non-GAAP Net Income, and Non-GAAP
EPS
GAAP Operating Income $ 12.2 $ 34.4 Non-GAAP
Adjustments: Restructuring Costs 3.2 - Acquisition-Related Costs
0.6 0.7 Purchased Intangible Amortization 5.1 5.1 Other Costs
2.5 3.4 Total Non-GAAP Adjustments: $
11.4 $ 9.2
Non-GAAP Operating Income $
23.6 $ 43.6 Non-GAAP Operating Margin 6.0 % 10.7 %
GAAP
Interest & Other Income (Expense), net (3.9 ) (7.5 )
Non-GAAP Adjustments: Gain on disposal of product line (0.9
) -
Non-GAAP Interest & Other Income
(Expense), net $ (4.8 ) $ (7.5 )
Non-GAAP Profit Before
Tax 18.8 36.1 Income Tax Provision (5.1 ) (12.3 )
Non-GAAP Tax Rate 27.1 % 34.1 % Minority Interest (0.3 ) -
Non-GAAP Net Income Attributable to Bruker 13.4 23.8
Weighted Average Shares Outstanding (Diluted) 168.1 166.9
Non-GAAP Earnings Per Share $ 0.08 $
0.14
Reconciliation of GAAP to Non-GAAP Gross Profit
GAAP Gross
Profit $ 174.5 $ 190.4 Non-GAAP Adjustments:
Acquisition-Related Costs 0.2 0.7 Purchased Intangible Amortization
4.8 4.3 Total Non-GAAP Adjustments: $
5.0 $ 5.0
Non-GAAP Gross Profit $ 179.5 $
195.4 Non-GAAP Gross Margin 45.6 %
48.2 %
* Please refer to our press release for a full explanation for
the use of non-GAAP measures.
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