EX-99.1 2 a14-19795_3ex99d1.htm EX-99.1

Exhibit 99.1

 

 

Bruker Reports Third Quarter 2014 Financial Results

 

BILLERICA, Mass.November 6, 2014 — Bruker Corporation (NASDAQ: BRKR) today reported financial results for its third quarter ended September 30, 2014.

 

Bruker’s revenues for the third quarter of 2014 declined by 4.4 percent to $419.8 million, compared to $439.0 million in the third quarter of 2013.  Excluding a 0.8 percent net positive effect from acquisitions & divestitures, and a 0.4 percent negative effect from changes in foreign exchange rates, Bruker reported a year-over-year organic revenue decline of 4.8 percent in the third quarter of 2014.

 

Bruker reported third quarter 2014 GAAP operating income of $4.9 million, or 1.2% of revenues, compared to $31.5 million, or 7.2% of revenues, in the third quarter of 2013.  Third quarter 2014 GAAP earnings per diluted share (EPS) were $0.03, compared to EPS of $0.10 in the third quarter of 2013.

 

On a non-GAAP basis, Bruker reported third quarter 2014 operating income of $35.9 million, or 8.6% of revenues, compared to $47.3 million, or 10.8% of revenues, in the third quarter of 2013.  Third quarter 2014 non-GAAP EPS were $0.14, compared to $0.20 in the third 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 first nine months of 2014, Bruker’s revenues grew 1.1 percent to $1.30 billion, compared to $1.29 billion in the first nine months of 2013.  Excluding a 0.8 percent net positive effect from acquisitions & divestitures, and a 0.7 percent positive benefit from changes in foreign exchange rates, Bruker reported a year-over-year organic revenue decline of 0.4 percent in the first nine months of 2014.

 

Bruker reported GAAP operating income of $60.9 million, or 4.7% of revenues, for the first nine months of 2014, compared to $87.2 million, or 6.8% of revenues, for the first nine months of 2013.  The Company’s GAAP EPS for the first nine months of 2014 were $0.18, compared to $0.27 in the first nine months of 2013.

 

On a non-GAAP basis, Bruker reported operating income of $120.7 million, or 9.3% of revenues, for the first nine months of 2014, compared to $124.2 million, or 9.6% of revenues, for the first nine months of 2013.  Non-GAAP EPS for the first nine months of 2014 were $0.46, and were unchanged from the first nine months of 2013.  Free cash flow for the first nine months of 2014 was $18.3 million, a $46.0 million increase compared to the first nine months of 2013.

 

“We had previously communicated a reduced outlook for the second half of 2014, and particularly for our third quarter,” said Frank Laukien, President and CEO of Bruker.  “In Q3 2014, we experienced weaker than expected demand for NMR products, and from semiconductor, data storage and certain other industrial customers.

 

“Additionally, since the July 2014 announcement of our Chemical & Applied Markets (CAM) division’s restructuring plan, we have completed the divestitures of two CAM product lines.  As a result, our third quarter CAM revenues declined significantly year-over-year, and we expect further declines in the fourth quarter.  We are in the process of integrating our remaining CAM product lines into our Life Science & Clinical division, and we are closing our Fremont, California factory.  We expect to complete these restructuring actions in the first half of 2015.”

 

Laukien continued: “As a result of changes in foreign exchange rates and the factors noted above, we now anticipate full year 2014 revenue to be in a range between $1.81 and $1.84 billion, and non-GAAP EPS to be in

 



 

a range between $0.72 and $0.78.  In addition to our ongoing strategic initiatives, we also expect to implement additional cost reductions in the first half of 2015.”

 

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 Third 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: 10054990.  The replay will be available beginning one hour after the end of the conference through November 13, 2014.

 

About Bruker Corporation

 

Bruker Corporation is a leading provider of high-performance, scientific instruments and solutions for molecular, cellular and materials research, as well as diagnostics, industrial, clinical research and applied analysis. For more information, please visit 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, 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 and our quarterly report on Form 10-Q for the period ended June 30, 2014. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law.

 

-tables follow-

 

Contacts:

Joshua Young

Vice President, Investor Relations

Bruker Corporation

T: +1 (978) 667 – 9580, ext. 1479

joshua.young@Bruker.com

 


 


 

Bruker Corporation

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

 

 

 

September 30,

 

December 31,

 

(in millions)

 

2014

 

2013

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

329.2

 

$

438.7

 

Short-term investments

 

113.1

 

 

Accounts receivable, net

 

268.9

 

307.6

 

Inventories

 

566.8

 

589.8

 

Other current assets

 

121.7

 

95.8

 

Total current assets

 

1,399.7

 

1,431.9

 

 

 

 

 

 

 

Property, plant and equipment, net

 

265.0

 

299.5

 

Intangible and other long-term assets

 

245.9

 

256.9

 

 

 

 

 

 

 

Total assets

 

$

1,910.6

 

$

1,988.3

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of long-term debt

 

$

0.7

 

$

0.7

 

Accounts payable

 

98.5

 

74.8

 

Customer advances

 

210.0

 

258.6

 

Other current liabilities

 

300.8

 

314.5

 

Total current liabilities

 

610.0

 

648.6

 

 

 

 

 

 

 

Long-term debt

 

354.5

 

354.3

 

Other long-term liabilities

 

133.0

 

135.2

 

 

 

 

 

 

 

Total shareholders’ equity

 

813.1

 

850.2

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,910.6

 

$

1,988.3

 

 

FOR FURTHER INFORMATION:

Joshua Young, Vice President of Investor Relations

 

Tel:  +1 (978) 663-3660, ext. 1479

 

Email:  Joshua.Young@bruker.com

 



 

Bruker Corporation

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

(in millions, except per share amounts)

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

419.8

 

$

439.0

 

$

1,300.9

 

$

1,287.3

 

Cost of revenues

 

252.5

 

245.8

 

753.4

 

718.0

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

167.3

 

193.2

 

547.5

 

569.3

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

108.0

 

105.7

 

332.5

 

319.6

 

Research and development

 

42.1

 

45.5

 

132.6

 

141.4

 

Other charges, net

 

12.3

 

10.5

 

21.5

 

21.1

 

Total operating expenses

 

162.4

 

161.7

 

486.6

 

482.1

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

4.9

 

31.5

 

60.9

 

87.2

 

 

 

 

 

 

 

 

 

 

 

Interest and other income (expense), net

 

4.1

 

(4.7

)

(3.1

)

(16.4

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes and noncontrolling interest in consolidated subsidiaries

 

9.0

 

26.8

 

57.8

 

70.8

 

Income tax provision

 

2.7

 

9.9

 

24.7

 

24.9

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

6.3

 

16.9

 

33.1

 

45.9

 

Net income attributable to noncontrolling interests in consolidated subsidiaries

 

0.8

 

0.3

 

2.5

 

1.0

 

Net income attributable to Bruker Corporation

 

$

5.5

 

$

16.6

 

$

30.6

 

$

44.9

 

 

 

 

 

 

 

 

 

 

 

Net income per common share attributable to Bruker Corporation shareholders:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

$

0.10

 

$

0.18

 

$

0.27

 

Diluted

 

$

0.03

 

$

0.10

 

$

0.18

 

$

0.27

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

168.0

 

167.0

 

167.5

 

166.6

 

Diluted

 

169.6

 

168.7

 

169.5

 

168.4

 

 



 

Bruker Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

(in millions)

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

6.3

 

$

16.9

 

$

33.1

 

$

45.9

 

Adjustments to reconcile consolidated net income to cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

17.6

 

15.2

 

47.6

 

45.4

 

Write-down of demonstration inventories to net realizable value

 

7.4

 

8.0

 

22.6

 

24.0

 

Stock-based compensation expense

 

2.1

 

1.6

 

7.1

 

4.8

 

Deferred income taxes

 

(0.3

)

(5.5

)

 

(8.1

)

Gain on disposal of product line

 

(8.7

)

 

(9.0

)

(0.9

)

Other non-cash expenses, net

 

9.6

 

0.9

 

11.1

 

1.2

 

Changes in operating assets and liabilities, net of acquisitions and divestitures:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(7.4

)

11.2

 

21.5

 

(9.7

)

Inventories

 

(8.5

)

(13.0

)

(46.9

)

(34.9

)

Accounts payable and accrued expenses

 

15.8

 

19.8

 

24.7

 

5.7

 

Income taxes payable, net

 

(7.6

)

(9.7

)

(14.8

)

(27.6

)

Deferred revenue

 

0.3

 

(3.7

)

2.2

 

1.3

 

Customer advances

 

(0.3

)

3.0

 

(35.1

)

(18.9

)

Other changes in operating assets and liabilities, net

 

(12.8

)

(6.2

)

(19.1

)

(14.6

)

Net cash provided by operating activities

 

13.5

 

38.5

 

45.0

 

13.6

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

(53.0

)

 

(120.8

)

 

Cash paid for acquisitions, net of cash acquired

 

(3.9

)

(9.5

)

(3.9

)

(11.6

)

Proceeds from disposal of product line

 

12.1

 

 

12.8

 

0.5

 

Purchases of property, plant and equipment

 

(9.9

)

(10.2

)

(26.7

)

(41.3

)

Proceeds from sales of property, plant and equipment

 

1.8

 

0.2

 

2.9

 

0.8

 

Net cash used in investing activities

 

(52.9

)

(19.5

)

(135.7

)

(51.6

)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from revolving lines of credit

 

 

19.5

 

 

19.5

 

Repayment of other debt, net

 

(0.2

)

(0.3

)

(0.7

)

(0.8

)

Proceeds from issuance of common stock, net

 

2.5

 

3.5

 

7.3

 

8.0

 

Changes in restricted cash

 

0.7

 

(0.6

)

0.7

 

(1.3

)

Cash payments to noncontrolling interest

 

 

 

(1.1

)

(0.6

)

Net cash provided by financing activities

 

3.0

 

22.1

 

6.2

 

24.8

 

Effect of exchange rate changes on cash and cash equivalents

 

(24.2

)

14.8

 

(25.0

)

9.4

 

Net change in cash and cash equivalents

 

(60.6

)

55.9

 

(109.5

)

(3.8

)

Cash and cash equivalents at beginning of period

 

389.8

 

250.9

 

438.7

 

310.6

 

Cash and cash equivalents at end of period

 

$

329.2

 

$

306.8

 

$

329.2

 

$

306.8

 

 



 

Bruker Corporation

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES* (unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

(in millions, except per share amounts)

 

2014

 

2013

 

2014

 

2013

 

Reconciliation of Non-GAAP Operating Income, Non-GAAP Profit Before Tax, Non-GAAP Net Income, and Non-GAAP EPS

 

 

 

 

 

 

 

 

 

GAAP Operating Income

 

$

4.9

 

$

31.5

 

$

60.9

 

$

87.2

 

Non-GAAP Adjustments:

 

 

 

 

 

 

 

 

 

Restructuring Costs

 

16.2

 

8.6

 

29.3

 

13.6

 

Acquisition-Related Costs

 

1.4

 

1.3

 

3.0

 

2.2

 

Purchased Intangible Amortization

 

5.1

 

5.1

 

15.1

 

15.3

 

Other Costs

 

8.3

 

0.8

 

12.4

 

5.9

 

Total Non-GAAP Adjustments:

 

$

31.0

 

$

15.8

 

$

59.8

 

$

37.0

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Operating Income

 

$

35.9

 

$

47.3

 

$

120.7

 

$

124.2

 

Non-GAAP Operating Margin

 

8.6

%

10.8

%

9.3

%

9.6

%

 

 

 

 

 

 

 

 

 

 

Non-GAAP Interest & Other Income (Expense), net

 

(2.2

)

(4.7

)

(9.7

)

(18.8

)

Non-GAAP Profit Before Tax

 

33.7

 

42.6

 

111.0

 

105.4

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Income Tax Provision

 

(9.1

)

(8.5

)

(31.1

)

(27.3

)

Non-GAAP Tax Rate

 

27.0

%

20.0

%

28.0

%

25.9

%

 

 

 

 

 

 

 

 

 

 

Minority Interest

 

(0.8

)

(0.3

)

(2.5

)

(1.0

)

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net Income Attributable to Bruker

 

23.8

 

33.8

 

77.4

 

77.1

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding (Diluted)

 

169.6

 

168.7

 

169.5

 

168.4

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Earnings Per Share

 

$

0.14

 

$

0.20

 

$

0.46

 

$

0.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP and Non-GAAP Gross Profit

 

 

 

 

 

 

 

 

 

GAAP Gross Profit

 

$

167.3

 

$

193.2

 

$

547.5

 

$

569.3

 

Non-GAAP Adjustments:

 

 

 

 

 

 

 

 

 

Restructuring Costs

 

13.4

 

 

22.3

 

 

Acquisition-Related Costs

 

0.2

 

0.2

 

0.9

 

0.6

 

Purchased Intangible Amortization

 

4.6

 

4.8

 

13.8

 

14.3

 

Total Non-GAAP Adjustments:

 

18.2

 

5.0

 

37.0

 

14.9

 

Non-GAAP Gross Profit

 

$

185.5

 

$

198.2

 

$

584.5

 

$

584.2

 

Non-GAAP Gross Margin

 

44.2

%

45.1

%

44.9

%

45.4

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP and Non-GAAP Interest & Other Income (Expense), net

 

 

 

 

 

 

 

 

 

GAAP Interest & Other Income (Expense), net

 

$

4.1

 

$

(4.7

)

$

(3.1

)

$

(16.4

)

Non-GAAP Adjustments:

 

 

 

 

 

 

 

 

 

Insurance Settlement

 

 

 

 

(1.5

)

Sale of Product Line

 

(8.7

)

 

(9.0

)

(0.9

)

Other

 

2.4

 

 

2.4

 

 

Total Non-GAAP Adjustments:

 

(6.3

)

 

(6.6

)

(2.4

)

Non-GAAP Interest & Other Income (Expense), net

 

$

(2.2

)

$

(4.7

)

$

(9.7

)

$

(18.8

)

 


*  Please refer to our press release for a full explanation for the use of non-GAAP measures.