Bruker Corporation (NASDAQ: BRKR) today reported financial
results for its first quarter ended March 31, 2014.
Bruker’s revenues for the first quarter of 2014 grew by 7.7
percent to $423.7 million, compared to $393.4 million in the first
quarter of 2013. Excluding a 1.1 percent net positive effect from
acquisitions and divestitures, Bruker reported year-over-year
organic revenue growth of 6.6 percent in the first quarter of 2014.
Changes in foreign exchange rates had a negligible effect on
revenues during the quarter.
Bruker reported first quarter 2014 GAAP operating income of
$20.6 million, or 4.9% of revenues, compared to $12.2 million, or
3.1% of revenues, in the first quarter of 2013. First quarter 2014
GAAP earnings per diluted share (EPS) were $0.05, compared to EPS
of $0.03 in the first quarter of 2013.
On a non-GAAP basis, Bruker reported first quarter 2014
operating income of $32.1 million, or 7.6% of revenues, compared to
$23.6 million, or 6.0% of revenues, in the first quarter of 2013.
First quarter 2014 non-GAAP EPS were $0.11, compared to $0.08 in
the first quarter of 2013. Free cash flow in the first quarter of
2014 was $9.3 million, a $42.1 million increase compared to ($32.8)
million in the first quarter of 2013. A reconciliation of GAAP to
non-GAAP financial measures is provided in the Company’s financial
tables accompanying this press release.
“Our year is off to a reasonable start, with year-over-year
revenue growth and non-GAAP operating margin expansion compared to
a relatively weak first quarter of 2013,” said Frank Laukien,
President and CEO of Bruker. “Our research, applied and clinical
markets are healthy, whereas our industrial markets grew slowly
after declining last year. Looking ahead, we remain on track to
deliver our full-year 2014 guidance, but we may see variability in
our quarterly results.”
Bruker is maintaining its full year 2014 guidance of
year-over-year revenue growth of 3 to 4 percent and non-GAAP
earnings per share growth of 10 to 14 percent.
“Good revenue growth combined with control over operating
expenses enabled us to deliver solid operating margin expansion in
the first quarter compared to Q1 2013,” said Charles Wagner, Chief
Financial Officer of Bruker. “We generated growth in all of our
Groups and drove year-over-year improvements in working capital and
free cash flow. Our focus for the remainder of the year will be on
continuing to transform our supply chain and launching initiatives
that will further lower our production costs.”
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 Daylight 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 First 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: 10045335. The replay will be available beginning one hour
after the end of the conference through May 13, 2014 at 9:00 a.m.
EDT.
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, 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, 2013. 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) March 31, December 31, 2014
2013 ASSETS Current assets: Cash and
cash equivalents $ 454.0 $ 438.7 Accounts receivable, net 295.0
307.6 Inventories 620.5 589.8 Other current assets 107.2
95.8
Total current assets
1,476.7 1,431.9 Property, plant and equipment, net 296.7
299.5 Intangible and other long-term assets 254.3
256.9 Total assets $ 2,027.7 $ 1,988.3
LIABILITIES
AND SHAREHOLDERS' EQUITY Current liabilities: Current
portion of long-term debt $ 0.7 $ 0.7 Accounts payable 116.4 74.8
Customer advances 251.2 258.6 Other current liabilities
302.8 314.5 Total current liabilities 671.1 648.6
Long-term debt 354.1 354.3 Other long-term liabilities 134.2 135.2
Total shareholders' equity 868.3 850.2
Total liabilities and shareholders' equity $ 2,027.7 $ 1,988.3
Bruker Corporation CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended (in millions, except per share
amounts) March 31, 2014 2013
Revenues $ 423.7 $ 393.4 Cost of revenues 244.0
218.9 Gross profit 179.7 174.5
Operating expenses: Selling, general and administrative 109.5 106.8
Research and development 46.0 49.4 Other charges, net 3.6
6.1 Total operating expenses 159.1
162.3 Operating income 20.6 12.2
Interest and other income (expense), net (4.9 ) (3.9
)
Income before income taxes and
noncontrolling interest in consolidated subsidiaries
15.7 8.3 Income tax provision 5.7 2.6
Consolidated net income 10.0 5.7
Net income attributable to noncontrolling
interests in consolidated subsidiaries
1.3 0.3 Net income attributable to
Bruker Corporation $ 8.7 $ 5.4
Net income per common share attributable
to Bruker Corporation shareholders:
Basic $ 0.05 $ 0.03 Diluted $ 0.05 $ 0.03
Weighted average common shares outstanding: Basic
167.3 166.4 Diluted 169.4
168.1
Bruker Corporation CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in millions) Three Months Ended March
31, 2014 2013 Cash flows from operating
activities: Consolidated net income $ 10.0 $ 5.7 Adjustments to
reconcile consolidated net income to cash flows from operating
activities: Depreciation and amortization 15.2 15.2 Write-down of
demonstration inventories to net realizable value 7.6 7.8
Stock-based compensation expense 2.0 1.8 Deferred income taxes 0.3
(2.6 ) Gain on disposal of product line (0.3 ) (0.9 ) Other
non-cash expenses, net 1.0 (0.3 ) Changes in operating assets and
liabilities, net of acquisitions: Accounts receivable 12.7 8.7
Inventories (37.9 ) (37.0 ) Accounts payable and accrued expenses
21.9 (7.8 ) Income taxes payable 2.0 (4.0 ) Deferred revenue 5.0
2.9 Customer advances (7.6 ) 3.7 Other changes in operating assets
and liabilities, net (13.4 ) (11.4 ) Net cash
provided by (used in) operating activities 18.5
(18.2 ) Cash flows from investing activities: Cash
paid for acquisitions, net of cash acquired - (0.8 ) Disposal of
product line 0.7 0.5 Purchases of property, plant and equipment
(9.2 ) (14.6 ) Sales of property, plant and equipment 0.6
0.6 Net cash used in investing activities
(7.9 ) (14.3 ) Cash flows from financing
activities: Repayment of other debt, net (0.2 ) (0.7 ) Proceeds
from issuance of common stock, net 3.0 4.1 Changes in restricted
cash (0.3 ) (3.1 ) Net cash provided by financing
activities 2.5 0.3 Effect of exchange
rate changes on cash and cash equivalents 2.2
(9.0 ) Net change in cash and cash equivalents 15.3 (41.2 ) Cash
and cash equivalents at beginning of period 438.7
310.6 Cash and cash equivalents at end of period $
454.0 $ 269.4
Bruker Corporation
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES*
(unaudited) (in millions, except
per share amounts) Three Months Ended March 31,
2014 2013 Reconciliation of Non-GAAP Operating
Income, Non-GAAP Profit Before Tax, Non-GAAP Net Income, and
Non-GAAP EPS
GAAP Operating Income $ 20.6 $ 12.2
Non-GAAP Adjustments: Restructuring Costs 2.4 3.2
Acquisition-Related Costs 1.1 0.6 Purchased Intangible Amortization
5.2 5.1 Other Costs 2.8 2.5 Total
Non-GAAP Adjustments: $ 11.5 $ 11.4
Non-GAAP Operating Income $ 32.1 $ 23.6 Non-GAAP Operating
Margin 7.6 % 6.0 % Non-GAAP Interest & Other Income
(Expense), net (5.2 ) (4.8 )
Non-GAAP Profit Before Tax 26.9
18.8 Non-GAAP Income Tax Provision (6.9 ) (5.1 ) Non-GAAP
Tax Rate 25.5 % 27.1 % Minority Interest (1.3 ) (0.3 )
Non-GAAP Net Income Attributable to Bruker 18.7 13.4
Weighted Average Shares Outstanding (Diluted) 169.4 168.1
Non-GAAP Earnings Per Share $ 0.11 $
0.08
Reconciliation of GAAP and Non-GAAP Gross Profit
GAAP Gross
Profit $ 179.7 $ 174.5 Non-GAAP Adjustments: Restructuring
Costs 2.2 - Acquisition-Related Costs 0.5 0.2 Purchased Intangible
Amortization 4.8 4.8 Total Non-GAAP
Adjustments: 7.5 5.0
Non-GAAP Gross
Profit $ 187.2 $ 179.5 Non-GAAP Gross Margin
44.2 % 45.6 %
Reconciliation of GAAP and Non-GAAP
Interest & Other Income (Expense), net
GAAP Interest &
Other Income (Expense), net $ (4.9 ) $ (3.9 ) Non-GAAP
Adjustments: Sale of Product Line (0.3 ) (0.9 )
Non-GAAP Interest & Other Income (Expense), net
$ (5.2 ) $ (4.8 )
* 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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