Full Press Release Details
Bruker Announces Final Fourth Quarter
and Fiscal Year 2019 Financial Results
BILLERICA, Massachusetts - March 27, 2020
- Bruker Corporation (Nasdaq: BRKR) today announced final audited financial results for the fourth quarter and fiscal
year 2019, and the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The Company's
Audit Committee with the assistance of independent, external legal counsel and independent forensic accountants has concluded
its internal investigation into an allegation related to the Company's year-end close, primarily related to income tax matters,
including the effective income tax rate for 2019 and the related income tax balance sheet accounts. With today's Form 10-K
filing, Bruker is now current with its SEC reporting obligations and in compliance with its Nasdaq continued listing requirements.
Bruker's final operating results for the fourth quarter
and fiscal year 2019, including revenue and operating income were unchanged from the preliminary operating results reported in
Bruker's press release and 8-K filing, dated February 18, 2020.
Fourth Quarter 2019 Financial Results
As previously announced on February 18, 2020, Bruker's
revenues for the fourth quarter of 2019 were $599.9 million, an increase of 8.4% compared to the fourth quarter of 2018. In the
fourth quarter of 2019, Bruker's year-over-year organic revenue growth was 5.2%. Growth from acquisitions was 4.3%, constant
currency growth was 9.5%, while foreign currency translation had a negative effect of 1.1%.
Fourth quarter 2019 GAAP operating income was $117.7 million,
compared to $106.4 million in the fourth quarter of 2018, representing GAAP operating margins of 19.6% and 19.2%, respectively.
Non-GAAP operating income was $132.5 million, compared to $122.8 million in the fourth quarter of 2018. Bruker's fourth quarter
2019 non-GAAP operating margin was 22.1%, compared to 22.2% in the fourth quarter of 2018.
Fourth quarter 2019 GAAP diluted earnings per share (EPS) were
$0.44, compared to $0.50 per share in the fourth quarter of 2018. Fourth quarter 2019 non-GAAP diluted EPS were $0.53, compared
to $0.54 per share in the fourth quarter of 2018. The year-over-year declines in GAAP and non-GAAP diluted EPS were driven by a
higher effective tax rate in the fourth quarter of 2019.
Fiscal Year 2019 Financial Results
As previously announced on February 18, 2020, in fiscal year
2019, Bruker's revenues were $2,072.6 million, an increase of 9.3% from $1,895.6 million in 2018. In fiscal year 2019, Bruker's
organic revenue growth was 5.7% year-over-year. Growth from acquisitions was 6.3%, constant currency growth was 12.0%, while foreign
currency translation had a negative effect of 2.7%.
Fiscal year 2019 GAAP operating income was $300.9 million, compared
to $262.4 million in 2018, representing GAAP operating margins of 14.5% and 13.8%, respectively. Fiscal year 2019 non-GAAP operating
income was $364.0 million, compared to $317.9 million in 2018. Bruker's non-GAAP operating margin in fiscal year 2019 was
17.6%, an increase of 80 basis points, compared to 16.8% in 2018.
Fiscal year 2019 GAAP EPS were $1.26, compared to $1.14 in fiscal
year 2018. Fiscal year 2019 non-GAAP diluted EPS were $1.57, an increase of 12%, compared to $1.40 in fiscal year 2018. The increase
in GAAP and non-GAAP EPS compared to the prior year was driven primarily by revenue growth, and higher gross and operating profit,
partially offset by an increase in the effective tax rate for fiscal year 2019.
On a GAAP basis, for fiscal year 2019, Bruker reported an effective
tax rate of 29.4%, compared to 26.0% in fiscal year 2018. Bruker's non-GAAP effective tax rate for fiscal year 2019 was 28.1%,
compared to 26.1% in fiscal year 2018. The increase in the effective tax rate for fiscal year 2019 was due to a geographical mix
shift in earnings to higher tax jurisdictions and changes in tax reserves. For fiscal year 2020, the Company anticipates its non-GAAP
effective tax rate to return to a range between 25% and 27%.
A reconciliation of non-GAAP to GAAP financial measures is provided
in the tables accompanying this press
Suspending Fiscal Year 2020 (FY 2020) Guidance
In light of the challenging business conditions created by the
global spread of COVID-19, Bruker is suspending its guidance for FY 2020. The Company expects to provide a business update on its
first quarter 2020 earnings conference call in early May 2020. Bruker anticipates that both revenue and earnings will be lower
in the first quarter of 2020 than in the first quarter of 2019. The Company's second quarter 2020 results are expected to
be significantly negatively impacted by COVID-19 related disruptions to the Company's operations, to customer operations,
and to global supply chains and logistics.
Bruker's President and CEO Frank Laukien commented: "First
and foremost, our concern is for the safety and health of our employees and their families, as well as for that of our customers
and partners. Fundamentally, Bruker contributes, indirectly or directly, in important ways to global healthcare, food supply, IT
infrastructure, and homeland security. We support many customers in their important research and development, analytical and diagnostic
testing, as well as product safety and quality assurance, which are and will remain a high priority for our societies. Finally,
Bruker continues to have a solid balance sheet and a strong liquidity position."
Dr. Laukien continued: "With our enabling life science
and diagnostic tools, we are particularly pleased to provide essential research and service support for infectious disease research,
for anti-viral vaccine and therapeutic drug discovery and development, as well as for clinical microbiology and viral testing in
support of the fight against the COVID-19 pandemic. Our clinical microbiology solutions are key for early identification of bacterial
or fungal diseases that can affect COVID-19 patients with weakened immune systems, who may be also suffering from pneumonia or
hospital-acquired complications."
Internal Investigation
As previously disclosed on February 18, 2020, the Company's
Audit Committee initiated an internal investigation into an allegation received in connection with the Company's year-end
close, primarily relating to income tax matters including the effective income tax rate for 2019 and the related income tax balance
sheet accounts. The Audit Committee, with the assistance of independent, external legal counsel and independent forensic accountants,
concluded its investigation in March 2020. The Investigation did not identify any material misstatements or omissions regarding
the Company's financial statements, nor any misconduct, violations of the Company's Code of Conduct or tone at the
About Bruker Corporation (Nasdaq: BRKR)
Bruker is enabling scientists to make breakthrough discoveries
and develop new applications that improve the quality of human life. Bruker's high-performance scientific instruments and
high-value analytical and diagnostic solutions enable scientists to explore life and materials at molecular, cellular and microscopic
levels. In close cooperation with our customers, Bruker is enabling innovation, improved productivity and customer success in
life science molecular research, in applied and pharma applications, in microscopy and nanoanalysis, and in industrial applications,
as well as in cell biology, preclinical imaging, clinical phenomics and proteomics research and clinical microbiology. For more
information, please visit: www.bruker.com.
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with U.S. generally accepted accounting principles (GAAP), we use the following non-GAAP financial
measures: organic revenue and revenue growth on a constant currency basis; non-GAAP gross profit; non-GAAP gross profit margin;
non-GAAP operating income; non-GAAP operating profit; non-GAAP operating margin; non-GAAP SG&A expense; non-GAAP profit before
tax; non-GAAP tax rate; non-GAAP net income and non-GAAP earnings per share. These non-GAAP measures exclude costs related to restructuring
actions, acquisition and related integration expenses, amortization of acquired intangible assets and other non-operational costs.
We also may refer to organic revenue growth, free cash flow
and return on invested capital, which are also non-GAAP financial measures. We define the term organic revenue as GAAP revenue
excluding the effect of changes in foreign currency translation rates and the effect of acquisitions and divestitures, and believe
it is a useful measure to evaluate our continuing business. Related to organic growth, we
also present constant currency information to provide a framework for assessing how our underlying businesses performed excluding
the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for
entities reporting in currencies other than U.S. dollars are converted into U.S. dollars using the average exchange rates from
the comparative period rather than the actual exchange rates in effect during the respective periods. 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 because it indicates the amount of cash generated after additions to property, plant,
and equipment that is available for, among other things, acquisitions, investments in our business, repayment of debt and return
of capital to shareholders. We define return on invested capital (ROIC) as non-GAAP operating profit after income tax divided by
average total capital, which we define as debt plus equity minus cash and cash equivalents. We believe ROIC is an important measure
of how effectively the Company invests its capital.