BRUKER CORP
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
BRKR$61.31+5.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0000950170-24-094832
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000950170-24-123298
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 55 previous paragraphs and 138 current paragraphs.
40 unchanged; 13 reworded; 82 added; 2 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 3 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (82)
Current report
Non-GAAP Financial Measures
Current report
We define our non-GAAP financial measures as follows:
Current report
Non-GAAP gross profit margin as GAAP gross profit margin excluding the impact of non-GAAP adjustments.
Current report
Non-GAAP operating margin as GAAP operating margin excluding the impact of non-GAAP adjustments.
Current report
RESULTS OF OPERATIONS
Current report
Three Months Ended September 30, 2024, compared to the Three Months Ended September 30, 2023
Current report
Consolidated Results
Current report
The following table presents our results (in millions):
Current report
Revenue
Current report
The following table presents revenue, change in revenue and revenue growth by reportable segment (in millions):
Current report
(a)
Current report
Revenue increases were driven by growing demand for our differentiated instruments and solutions. For the three months ended September 30, 2024, the BSI BioSpin Segment recorded significant revenue primarily from to the sale of two GHz-class NMR systems, and with acquisition growth from the Chemspeed acquisition. The increase in revenue in the BSI CALID Segment for the three months ended September 30, 2024, relates primarily to the ELITechGroup acquisition and modest revenue growth across industrial and applied segments. The BSI NANO Segment revenue increase for the three months ended September 30, 2024, was driven by the NanoString acquisition and strong demand in its semiconductor metrology market.
Current report
Geographically in the three months ended September 30, 2024, our North American revenue grew 14.8% from academic & government and biopharma markets, Asia Pacific revenue increased by 14.4%, and European revenue increased by 15.0% compared to the same period in 2023, which was driven by the industrial market.
Current report
Gross Profit
Current report
Gross profit increased and gross profit margin decreased in the three months ended September 30, 2024, as compared to the same period in 2023, a result of increased revenue offset by restructuring and acquisitions costs, and an increase in purchased intangible amortization.
Current report
Selling, General and Administrative
Current report
Our selling, general and administrative expenses for the three months ended September 30, 2024, increased to 26.6% of total revenue, from 23.9% of total revenue for the comparable period in 2023. The increase as a percentage of revenue was a result of planned investments in sales and marketing and operating expenses from newly acquired acquisitions compared to the same period in 2023.
Current report
Research and Development
Current report
Our research and development expenses for the three months ended September 30, 2024 increased to 11.3% of total revenue from 9.6% of total revenue for the comparable period in 2023. The increase as a percentage of revenue is a result of our increased investment in research and development capabilities from newly acquired acquisitions.
Current report
Other charges, net for the three months ended September 30, 2024, consisted primarily of $9.0 million of professional fees incurred in connection with investigations as well as ongoing litigation related to the acquisitions of BCA and NanoString; and $6.8 million of acquisition-related charges which relate mainly to transaction costs on potential and consummated acquisitions, integration costs of newly acquired entities, and stock-based compensation expense related to the fair value changes of hybrid instruments.
Current report
Other charges, net for the three months ended September 30, 2023, consisted primarily of $3.7 million of restructuring costs for several smaller reorganizations, as well as $2.2 million of costs associated with our global information technology (“IT”) transformation activities that consist of a multi-year project aimed at updating and integrating our global enterprise resource planning and human resource information system, and $1.6 million of acquisition-related charges.
Current report
Operating Income
Current report
The following table presents operating income and operating margins on revenue by reportable segment (in millions):
Current report
(a)
Current report
Represents corporate costs and eliminations not allocated to the reportable segments. Unallocated costs include general and administrative expenses not directly incurred by the segments such as professional fees incurred for the quarterly reviews and annual audit of the consolidated financial statements, personnel costs of corporate accounting, finance, legal and IT resources, and other expense items.
Current report
Our operating income and operating income margin decreased in the three months ended September 30, 2024, as compared to the same period in 2023, due to higher revenue offset by profitability decrease related to acquisitions and an increase in purchase intangible amortization across the BSI BioSpin, BSI CALID and BSI NANO segments.
Current report
The increase in interest and other income (expense), net in the three months ended September 30, 2024, as compared to the same period in 2023 was primarily due to higher interest expense of $11.6 million due to increased borrowings, and impairment of certain minority investments of $4.4 million.
Current report
Income Tax Provision
Current report
The 2024 and 2023 effective tax rates were estimated using projected annual pre-tax income on a jurisdictional basis. Expected tax benefits, including tax credits and incentives, the impact of changes to valuation allowances and the effect of jurisdictional differences in statutory tax rates were also considered in the calculation.
Current report
The effective tax rates for the three months ended September 30, 2024, and 2023 were 26.8% and 25.8%, respectively. The increase in the Company's effective tax rate was primarily due to changes in jurisdictional mix and net unfavorable discrete activities.
Current report
Equity in Income of Unconsolidated Investees, net of tax
Current report
Equity in Income of Unconsolidated Investees, net of tax represents the Company's proportional share of the earnings or losses as reported by equity-method investees.
Current report
Net Income Attributable to Noncontrolling Interests
Current report
The net income attributable to noncontrolling interests represented the minority shareholders’ proportionate share of the net income recorded by our majority-owned subsidiaries.
Current report
Consolidated Results
Current report
Nine months Ended September 30, 2024, compared to the Nine months Ended September 30, 2023
Current report
The following table presents our results (in millions):
Current report
Revenue
Current report
The following table presents revenue, change in revenue and revenue growth by reportable segment (in millions):
Showing the first 40 of 82 passages. Open the source sections for the rest.
Removed paragraphs (2)
Previous report
Non-GAAP Measures
Previous report
Our non-GAAP gross profit margin increased in the three months ended June 30, 2024, as compared to the same period in 2023, as result of product mix and volume leverage partially offset by net unfavorable impact of foreign exchange rate movements, and costs contributed by acquisitions compared to 2023.
Reworded paragraphs (13)
Previous wording
Actual results may differ from those referred to in any forward-looking statements due to a number of factors, including, but not limited to, the risks described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and in this Quarterly Report on Form 10-Q, including the factors presented on page 35-36. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law.
Current wording
Actual results may differ from those referred to in any forward-looking statements due to a number of factors, including, but not limited to, the risks described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and in this Quarterly Report on Form 10-Q. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law.
Previous wording
Although our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, we believe that describing revenue and expenses, excluding the effects of foreign currency, acquisitions and divestitures, as well as certain other charges, net, provides meaningful supplemental information regarding our performance. We rely internally on certain measures that are not calculated according to GAAP. These measures are organic revenue, free cash flow, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income and non-GAAP operating margin. Our management believes that these financial measures provide relevant and useful information that is widely used by equity analysts, investors and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance.
Current wording
Although our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, we believe that describing revenue and expenses, excluding the effects of foreign currency, acquisitions and divestitures, as well as certain other charges, net, provides meaningful supplemental information regarding our performance. We rely internally on certain measures that are not calculated according to GAAP. These measures include non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating margin, and free cash flow.
Previous wording
We define free cash flow as GAAP 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 which is available for, among other things, investments in our business, acquisitions, share repurchases, dividends and repayment of debt.
Current wording
Our management believes that these financial measures provide relevant and useful information that is widely used by equity analysts, investors and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance and are useful measures to evaluate our continuing business. Additionally, management believes 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 which is available for, among other things, investments in our business, acquisitions, share repurchases, dividends and repayment of debt.
Previous wording
We define the term organic revenue as GAAP revenue excluding the effect of foreign currency translation changes and the effect of acquisitions and divestitures. We define the term non-GAAP gross profit as GAAP gross profit with certain non-GAAP measures excluded and non-GAAP gross profit margin as GAAP gross profit margin with certain non-GAAP measures excluded. We define the term non-GAAP operating income as GAAP operating income with certain non-GAAP measures excluded and non-GAAP operating margin as GAAP operating margin with certain non-GAAP measures excluded. These non-GAAP measures exclude costs related to restructuring actions, acquisition and related integration expenses, amortization of acquired intangible assets, costs associated with our global information technology transition initiatives, and other non-operational costs, and we believe these are useful measures to evaluate our continuing business.
Current wording
Non-GAAP gross profit as GAAP gross profit excluding costs related to restructuring actions, acquisition and related integration expenses, amortization of acquired intangible assets, costs associated with our global information technology transition initiatives, and other non-operational costs (“non-GAAP adjustments”).
Previous wording
During the first six months of 2024, Bruker acquired Elitech, Nanostring and Chemspeed. These businesses extend our capabilities in molecular diagnostics and life science analytical instruments focused on spatial biology, respectively. The Chemspeed acquisition brings to Bruker new capabilities in lab automation. The Elitech business will be integrated in the BSI CALD segment, the Nanostring acquisition will be integrated into the BSI Nano segment and the Chemspeed business will be integrated into the BSI BioSpin segment.
Current wording
During the first nine months of 2024, Bruker acquired ELITech, Nanostring and Chemspeed. ELITech and Nanostring extend our capabilities in molecular diagnostics and life science analytical instruments. The Chemspeed acquisition brings to Bruker new capabilities in lab automation. The ELITech business will be integrated in the BSI CALD segment, the Nanostring acquisition will be integrated into the BSI NANO segment and the Chemspeed business will be integrated into the BSI BioSpin segment.
Previous wording
Revenue for the six months ended June 30, 2024, increased by $155.2 million, or 11.4%, to $1,522.4 million, compared to $1,367.2 million for the comparable period in 2023. Approximately 7.4% of the revenue growth during the six months ended June 30, 2024, was attributed to acquisitions, and offset by a decrease of 0.5% from unfavorable foreign exchange rate movements. Excluding the unfavorable effects of foreign exchange rate movements and our recent acquisitions, our organic revenue, a non-GAAP measure, increased 4.5%. Revenue increases were driven by demand for our differentiated high-value scientific instruments and life science solutions compared to the same period in 2023.
Current wording
Revenue for the three months ended September 30, 2024, increased by $121.6 million, or 16.4%, to $864.4 million, compared to $742.8 million for the comparable period in 2023. Approximately 12.5% of the revenue growth during the three months ended September 30, 2024 was attributed to acquisitions, and another 0.7% from favorable foreign exchange rate movements. Excluding the favorable effects of foreign exchange rate movements and our recent acquisitions, our organic revenue, a non-GAAP measure, increased 3.1%. Revenue increases were driven by demand for our differentiated high-value scientific instruments and life science solutions compared to the same period in 2023.
Previous wording
Revenue for the three months ended June 30, 2024, increased by $118.8 million, or 17.4%, to $800.7 million, compared to $681.9 million for the comparable period in 2023. Approximately 11.1% of the revenue growth during the three months ended June 30, 2024, was attributed to acquisitions, and was offset by a decrease of 1.1% from unfavorable foreign exchange rate movements. Excluding the unfavorable effects of foreign exchange rate movements and our recent acquisitions, our organic revenue, a non-GAAP measure, increased 7.4%. Revenue increases were driven by demand for our differentiated high-value scientific instruments and life science solutions compared to the same period in 2023.
Current wording
Revenue for the nine months ended September 30, 2024, increased by $276.8 million, or 13.1%, to $2,386.8 million, compared to $2,110.0 million for the comparable period in 2023. Approximately 9.2% of the revenue growth during the nine months ended September 30, 2024, was attributed to acquisitions, and was offset by a decrease of 0.1% from unfavorable foreign exchange rate movements. Excluding the unfavorable effects of foreign exchange rate movements and our recent acquisitions, our organic revenue, a non-GAAP measure, increased 4.0%. Revenue increases were driven by demand for our differentiated high-value scientific instruments and life science solutions compared to the same period in 2023.
Previous wording
Our gross profit margin decreased to 48.0% during the three months ended June 30, 2024, as compared to 49.9% in the same period in 2023, as a result of product mix, acquisition related costs, increases in purchased intangible amortization related to acquisitions in the period, and unfavorable foreign exchange rate movements.
Current wording
Our gross profit margin decreased to 48.4% during the three months ended September 30, 2024, as compared to 51.5% in the same period in 2023, as a result of product mix, acquisition related costs, increases in purchased intangible amortization related to acquisitions in the period, slightly offset by favorable foreign exchange rate movements.
Previous wording
Our gross profit margin decreased to 48.4% during the six months ended June 30, 2024, as compared to 51.2% in the same period in 2023, as a result of product mix, acquisition related costs, increases in purchased intangible amortization related to acquisitions in the period, and unfavorable foreign exchange rate movements.
Current wording
Our gross profit margin decreased to 48.4% during the nine months ended September 30, 2024, as compared to 51.3% in the same period in 2023, as a result of product mix, acquisition related costs, increases in purchased intangible amortization and step up inventory costs related to acquisitions in the period, and unfavorable foreign exchange rate movements.
Previous wording
Our income tax provision in the three months ended June 30, 2024, and 2023 was $16.1 million and $19.9 million, respectively, representing effective tax rates of 67.4% and 25.7%, respectively. Our income tax provision in the six months ended June 30, 2024, and 2023 was $35.9 million and $49.8 million, respectively, representing effective tax rates of 37.6% and 27.1%, respectively. The increase in the Company's effective tax rate was primarily due to change in jurisdictional mix, and the impact of valuation allowance recorded on capital loss carryforwards related to the impairment charges on strategic investments.
Current wording
Our income tax provision in the three months ended September 30, 2024, and 2023 was $14.8 million and $30.8 million, respectively, representing effective tax rates of 26.8% and 25.8%, respectively. Our income tax provision in the nine months ended September 30, 2024, and 2023 was $50.7 million and $80.6 million, respectively, representing effective tax rates of 33.6% and 26.6%, respectively. The increase in the Company's effective tax rate was primarily due to changes in jurisdictional mix and net unfavorable discrete items.
Previous wording
Diluted earnings per share for the three months ended June 30, 2024, was $0.05, a decrease of $0.34 compared to $0.39 per share in the same period in 2023. Diluted earnings per share for the six months ended June 30, 2024, was $0.40, a decrease of $0.52 compared to $0.91 per share in the same period in 2023. The decrease in diluted earnings per share in both the three and six months ended June 30, 2024, was driven primarily by net income, which decreased compared to the same periods in the prior year related to mix of profitability from acquisitions and acquisition related expenses.
Current wording
Diluted earnings per share for the three months ended September 30, 2024, was $0.27, a decrease of $0.33 compared to $0.60 per share in the same period in 2023. Diluted earnings per share for the nine months ended September 30, 2024, was $0.67, a decrease of $0.83 compared to $1.50 per share in the same period in 2023. The decrease in diluted earnings per share in both the three and nine months ended September 30, 2024, was driven primarily by net income, which decreased compared to the same periods in the prior year related to mix of profitability from acquisitions and acquisition related expenses.
Previous wording
Our non-GAAP gross profit margin decreased in the six months ended June 30, 2024, as compared to the same period in 2023. The decrease in non-GAAP gross margin was primarily due to acquisitions.
Current wording
Our non-GAAP gross profit margin decreased in the three and nine months ended September 30, 2024, as compared to the same period in 2023. The decrease in non-GAAP gross margin was primarily due to acquisitions.
Previous wording
Our non-GAAP operating margin decreased in the three and six months ended June 30, 2024 as compared to the same period in 2023 primarily due to acquisitions and unfavorable foreign exchange rate movements. We also increased sales and marketing activities and investments in our research and development capabilities, as compared to 2023.
Current wording
Our non-GAAP operating margin decreased in the three and nine months ended September 30, 2024 as compared to the same period in 2023 primarily due to acquisitions and unfavorable foreign exchange rate movements. We also increased sales and marketing activities and investments in our research and development capabilities, as compared to 2023.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report — wording carried from elsewhere
Non-GAAP operating income as GAAP operating income excluding non-GAAP adjustments.
Current report — wording carried from elsewhere
Free cash flow as GAAP net cash provided by operating activities less additions to property, plant, and equipment.