Shareholders' Equity

9 Months Ended

Sep. 30, 2021

Shareholders' Equity

Shareholders' Equity

12. Shareholders’ Equity

Share Repurchase Program

In May 2019, the Company’s Board of Directors approved a stock repurchase plan (the “2019 Repurchase Program”) authorizing the purchase of common stock in the amount of up to $300.0 million from time to time, in amounts, at prices, and at such times as management deems appropriate, subject to market conditions, legal requirements and other considerations. During the nine months ended September 30, 2021, the Company repurchased a total of 555,602 shares at an aggregate cost of $34.5 million under the 2019 Repurchase Program. We completed the 2019 Repurchase Program in April 2021, after reaching the maximum cumulative spend.

In May 2021, the Company’s Board of Directors approved a stock repurchase plan (the “2021 Repurchase Program”) authorizing the purchase of common stock in the amount of up to $500.0 million from time to time over a two-year period, in amounts, at prices, and at such times as management deems appropriate, subject to market conditions, legal requirements and other considerations. During the nine months ended September 30, 2021, the Company purchased a total of 530,703 shares at an aggregate cost of $36.6 million under the 2021 Repurchase Program. No shares were purchased during the three months ended September 30, 2021. At September 30, 2021, $463.4 million remained available for future purchases under the 2021 Repurchase Program.

Accumulated Other Comprehensive Income (Loss)

The following is a summary of comprehensive income (dollars in millions):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Consolidated net income	$	88.1		$	55.3		$	204.6		$	90.1
Foreign currency translation adjustments		(26.6	)		38.9			(80.2	)		42.8
Derivatives designated as hedging instruments, net of tax		10.5			(30.3	)		59.3			(37.7	)
Pension liability adjustments, net of tax		1.1			0.1			4.4			14.9
Net comprehensive income		73.1			64.0			188.1			110.1
Less: Comprehensive income attributable to noncontrolling interests		0.7			1.4			0.9			1.5
Less: Comprehensive loss attributable to redeemable noncontrolling interest		—			—			—			(0.5	)
Comprehensive income attributable to Bruker Corporation	$	72.4		$	62.6		$	187.2		$	109.1

The following is a summary of the components of accumulated other comprehensive income, net of tax (dollars in millions):

	Foreign Currency Translation			Derivatives Designated as Hedging Instruments			Pension Liability Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2020	$	140.9		$	(91.5	)	$	(45.7	)	$	3.7
Other comprehensive (loss) income before reclassifications, net of tax		(78.1	)		59.3			2.2			(16.6	)
Realized loss on amounts reclassified from other comprehensive income, net of tax		—			—			2.2			2.2
Net current period other comprehensive (loss) income		(78.1	)		59.3			4.4			(14.4	)
Balance at September 30, 2021	$	62.8		$	(32.2	)	$	(41.3	)	$	(10.7	)

Stock-Based Compensation

The Company recorded stock-based compensation expense as follows in the unaudited condensed consolidated statements of income and comprehensive income (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Costs of product revenue	$	0.6	$	0.6	$	1.6	$	1.5
Selling, general and administrative		2.6		2.9		7.6		6.9
Research and development		0.6		0.6		1.6		1.5
Total stock-based compensation	$	3.8	$	4.1	$	10.8	$	9.9

In addition to the awards above, the Company recorded stock-based compensation expense within other charges, net of $0.3 million in the three months ended September 30, 2021 and 2020, and $1.1 million and $1.0 million in the nine months ended September 30, 2021 and 2020, respectively, related to the 2018 acquisition of Mestrelab.

At September 30, 2021, the Company expects to recognize pre-tax stock-based compensation expense of $3.3 million associated with outstanding stock option awards granted under the Company’s stock plans over the weighted average remaining service period of 2.7 years. The Company also expects to recognize additional pre-tax stock-based compensation expense of $30.5 million associated with outstanding restricted stock units granted under the Company’s 2016 Incentive Compensation Plan over the weighted average remaining service period of 2.6 years.

Stock options to purchase the Company’s common stock are periodically awarded to executive officers and other employees of the Company subject to a vesting period of three to four years. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions regarding volatility, expected life, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below:

	Nine months ended
	September 30,
	2021			2020
Risk-free interest rates		0.62	%		0.23	%
Expected life		4.43 years			5.14 years
Volatility		34	%		34	%
Expected dividend yield		0.20	%		0.37	%

Stock option activity was as follows:

	Shares Subject to Options			Weighted Average Option Price		Weighted Average Remaining Contractual Term (Yrs)		Aggregate Intrinsic Value (in millions) (b)
Outstanding at December 31, 2020		1,856,176		$	25.32
Granted		79,632		$	85.10
Exercised		(515,692	)	$	20.40
Forfeited/Expired		—		$	—
Outstanding at September 30, 2021		1,420,116		$	30.45		4.3	$	68.2
Exercisable at September 30, 2021		1,158,452		$	24.66		3.8	$	61.9
Exercisable and expected to vest at September 30, 2021 (a)		1,384,099		$	29.68		4.2	$	67.5

(a) Represents the number of vested options at September 30, 2021, plus the number of unvested options at September 30, 2021 that are ultimately expected to vest based on our estimated forfeiture rate.

(b) The aggregate intrinsic value is based on the positive difference between the exercise price of the underlying options and the quoted price of our common stock on September 30, 2021.

The total intrinsic value of options exercised was $31.8 million and $2.2 million for the nine months ended September 30, 2021 and 2020, respectively.

Restricted stock unit activity was as follows:

	Shares Subject to Restriction			Weighted Average Grant Date Value
Outstanding at December 31, 2020		805,052		$	39.63
Granted		216,692		$	78.01
Vested		(329,840	)	$	37.07
Forfeited		(19,043	)	$	43.52
Outstanding at September 30, 2021		672,861		$	53.14

The total fair value of restricted stock units vested was $26.6 million and $12.8 million for the nine months ended September 30, 2021 and 2020, respectively.