Bruker Corporation (NASDAQ:BRKR) today reported financial results for the fourth quarter and year ended December 31, 2007, now including the results of the Bruker BioSpin Group.
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, after the closing of the transaction all historical consolidated balance sheets, statements of operations, statements of cash flows and notes to the consolidated financial statements in future filings with the Securities and Exchange Commission will be restated by combining the historical consolidated financial statements of Bruker Corporation with those of the Bruker BioSpin Group. The information contained herein will discuss the combined financial results of Bruker Corporation, as it legally exists since the closing on February 26, 2008, and which now include the financial results of the Bruker BioSpin Group (“Combined”). These will be compared in some categories to the historical, standalone financial results of Bruker BioSciences Corporation, as it legally existed on December 31, 2007 (“Standalone”).
Combined Financial Results of Bruker Corporation
In the fourth quarter of 2007, Combined revenue increased by 31% to $343.1 million, compared to Combined revenue of $261.5 million in the fourth quarter of 2006. Excluding the effects of foreign currency translation, Combined fourth quarter 2007 revenue increased by 22% year-over-year. Combined fourth quarter 2007 revenue of $343.1 million was 87% higher than Standalone fourth quarter 2007 revenue of $183.7 million, as previously reported by Bruker BioSciences Corporation.
Combined net income in the fourth quarter of 2007 increased to $37.0 million, or $0.22 per diluted share, compared to Combined net income of $35.6 million, or $0.22 per diluted share, in the fourth quarter of 2006. Included in Combined GAAP net income for the fourth quarter of 2007 were after-tax charges of $6.9 million, or $0.04 per diluted share, for expenses related to the acquisition of the Bruker BioSpin Group.
Combined fourth quarter 2007 net income of $37.0 million was 164% higher than Standalone fourth quarter 2007 net income of $14.0 million, as previously reported by Bruker BioSciences Corporation. Combined fourth quarter 2007 earnings per diluted share of $0.22 were 69% higher than Standalone fourth quarter 2007 earnings per diluted share of $0.13, as previously reported by Bruker BioSciences Corporation.
For the full year 2007, Combined revenue increased by 21% to $1,032.4 million, compared to Combined revenue of $851.0 million for the full year 2006. Excluding the effects of foreign currency translation, Combined 2007 revenue increased by 15% year-over-year, including 1% growth from acquisitions, and organic growth of 14%. Combined 2007 revenue was 89% higher than Standalone 2007 revenue of $547.6 million, as previously reported by Bruker BioSciences Corporation.
Combined net income in 2007 increased 30% to $97.2 million, or $0.59 per diluted share, compared to Combined net income of $74.8 million, or $0.47 per diluted share, in 2006. Included in Combined GAAP net income for 2007 were after-tax charges of $7.4 million, or $0.05 per diluted share, for expenses related to the acquisition of the Bruker BioSpin Group. For comparison, included in Combined GAAP net income for the year 2006 were after-tax charges of $5.0 million, or $0.03 per diluted share, for expenses related to the acquisition of Bruker Optics, which was completed on July 1, 2006.
Combined 2007 net income of $97.2 million was 208% higher than the Standalone 2007 net income of $31.5 million, as previously reported by Bruker BioSciences Corporation. Combined 2007 earnings per diluted share of $0.59 were 97% higher than the Standalone 2007 earnings per diluted share of $0.30, as previously reported by Bruker BioSciences Corporation.
Combined cash flow from operations in 2007 was $127.1 million, compared to $82.8 million in 2006. Combined free cash flow, defined as operating cash flow less capital expenditures, was $101.8 million during 2007, compared to $61.7 million during 2006. As of December 31, 2007, the Combined Bruker Corporation had net cash of $290.4 million.
Comment and Outlook
Frank Laukien, President and CEO, commented: “The addition of the Bruker BioSpin Group to Bruker Corporation represents a significant step-up in our combined financial performance. We are extremely pleased that our overall rapid growth has enabled the Combined Bruker to cross the billion-dollar-revenue threshold already in 2007, with Combined, currency-adjusted 2007 revenue growth of 15%. Moreover, we have reached new levels of profitability and cash flow with Combined 2007 Bruker net income of $97 million and free cash flow of $102 million. Our Combined 2007 GAAP EPS of $0.59 was nearly twice the previously reported Standalone 2007 EPS of $0.30 of Bruker BioSciences Corporation.”
Bill Knight, CFO, continued with an outlook for the year 2008: “Our markets in 2007 were strong, yet going forward there is considerable economic uncertainty. Under the assumption that the overall market conditions we face will not deteriorate significantly, our financial goals for the full year 2008 include:
- revenue growth greater than 8%,
- operating margins greater than 14%, excluding expenses associated with the acquisition of the Bruker BioSpin Group,
- net income margins greater than 9%, excluding expenses associated with the acquisition of the Bruker BioSpin Group, and
- improved balance sheet metrics and operating cash flows.
It should be kept in mind that with the addition of the Bruker BioSpin Group, we expect that quarterly fluctuations in our financial results will increase.”
EARNINGS CONFERENCE CALL
Bruker Corporation will host an operator-assisted earnings conference call at 8 a.m. Eastern Time on Monday, March 17, 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 in the US and Canada by calling 888-339-2688, or 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 in the US and Canada, or 617-801-6888 outside the US and Canada, and then entering replay pass code 13763010.
ABOUT BRUKER CORPORATION (NASDAQ:BRKR)
As of February 26, 2008, Bruker Corporation has become the parent company of the entire Bruker group of companies. Bruker Corporation now operates in two segments, the life science and analytical (LSA) systems segment, and the international advanced superconductor (IAS) segment. For more information, please visit www.bruker.com.
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, 2006, 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 (including Bruker BioSpin Group) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||||
| Product revenue | $ | 303,875 | $ | 233,845 | $ | 913,238 | $ | 758,532 | |||||||||||
| Service revenue | 37,758 | 25,938 | 115,419 | 87,873 | |||||||||||||||
| Other revenue | 1,438 | 1,762 | 3,791 | 4,602 | |||||||||||||||
| Total revenue | 343,071 | 261,545 | 1,032,448 | 851,007 | |||||||||||||||
| Cost of product revenue | 157,207 | 115,539 | 489,246 | 399,182 | |||||||||||||||
| Cost of service revenue | 24,407 | 15,991 | 73,591 | 53,207 | |||||||||||||||
| Total cost of revenue | 181,614 | 131,530 | 562,837 | 452,389 | |||||||||||||||
| Gross profit margin | 161,457 | 130,015 | 469,611 | 398,618 | |||||||||||||||
Operating Expenses: | |||||||||||||||||||
| Sales and marketing | 45,965 | 39,069 | 156,783 | 131,393 | |||||||||||||||
| General and administrative | 17,165 | 14,739 | 59,600 | 51,853 | |||||||||||||||
| Research and development | 30,289 | 27,227 | 110,751 | 102,611 | |||||||||||||||
| Acquisition related charges | 6,868 | (105 | ) | 7,412 | 5,724 | ||||||||||||||
| Total operating expenses | 100,287 | 80,930 | 334,546 | 291,581 | |||||||||||||||
| Operating income | 61,170 | 49,085 | 135,065 | 107,037 | |||||||||||||||
| Interest and other income (expense), net | 1,206 | (1,493 | ) | 5,750 | 4,716 | ||||||||||||||
Income before income tax provision and minority interest in consolidated subsidiaries | 62,376 | 47,592 | 140,815 | 111,753 | |||||||||||||||
| Income tax provision | 25,378 | 12,043 | 43,278 | 36,927 | |||||||||||||||
Income before minority interest in consolidated subsidiaries | 36,998 | 35,549 | 97,537 | 74,826 | |||||||||||||||
| Minority interest in consolidated subsidiaries | 44 | (67 | ) | 299 | 8 | ||||||||||||||
| Net income | $ | 36,954 | $ | 35,616 | $ | 97,238 | $ | 74,818 | |||||||||||
| Net income per share: | |||||||||||||||||||
| Basic | $ | 0.23 | $ | 0.22 | $ | 0.60 | $ | 0.47 | |||||||||||
| Diluted | $ | 0.22 | $ | 0.22 | $ | 0.59 | $ | 0.47 | |||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||
| Basic | 162,053 | 159,046 | 161,247 | 159,057 | |||||||||||||||
| Diluted | 164,725 | 160,915 | 164,314 | 160,106 | |||||||||||||||
Bruker Corporation (including Bruker BioSpin Group) | ||||||||||
| December 31, | December 31, | |||||||||
| 2007 | 2006 | |||||||||
ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and short-term investments | $ | 344,504 | $ | 325,689 | ||||||
| Accounts receivable, net | 185,217 | 147,693 | ||||||||
| Inventories | 447,688 | 408,892 | ||||||||
| Other current assets | 57,288 | 46,306 | ||||||||
| Total current assets | 1,034,697 | 928,580 | ||||||||
| Property and equipment, net | 207,588 | 190,442 | ||||||||
| Intangible and other assets | 69,346 | 57,558 | ||||||||
| Total assets | $ | 1,311,631 | $ | 1,176,580 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Short-term borrowings | $ | 34,846 | $ | 27,190 | ||||||
| Accounts payable | 52,293 | 46,407 | ||||||||
| Other current liabilities | 474,052 | 430,821 | ||||||||
| Total current liabilities | 561,191 | 504,418 | ||||||||
| Long-term debt | 6,394 | 26,995 | ||||||||
| Other long-term liabilities | 107,656 | 71,648 | ||||||||
| Minority interest in subsidiaries | 538 | 239 | ||||||||
| Total shareholders' equity | 635,852 | 573,280 | ||||||||
| Total liabilities and shareholders' equity | $ | 1,311,631 | $ | 1,176,580 | ||||||
Contacts:
Michael Willett, +1-978-663-3660, ext. 1411
Investor
Relations Officer
michael.willett@bruker.com
