Bruker Reports Fourth Quarter and Fiscal Year 2018 Financial Results

BILLERICA, Mass., Feb. 11, 2019 /PRNewswire/ -- Bruker Corporation (Nasdaq: BRKR) today announced financial results for its fourth quarter and fiscal year ended December 31, 2018.

Fourth Quarter 2018 Financial Results

Bruker's revenues for the fourth quarter of 2018 were $553.6 million, an increase of 4.4% compared to the fourth quarter of 2017. In the fourth quarter of 2018, Bruker's year-over-year organic revenue growth was 3.4%. Growth from acquisitions was 3.2%, while foreign currency translation had a negative effect of 2.2%.

Fourth quarter 2018 Bruker Scientific Instruments (BSI) segment revenues of $500.5 million increased 3.3% compared to the fourth quarter of 2017, including organic growth of 2.1%. Fourth quarter 2018 Bruker Energy & Supercon Technologies (BEST) segment revenues of $55.6 million increased 9.0% compared to the fourth quarter of 2017, including organic growth, net of intercompany eliminations, of 17.6%.

Fourth quarter 2018 GAAP operating income was $106.4 million, compared to $95.3 million in the fourth quarter of 2017, representing a GAAP operating margin of 19.2%, compared to 18.0% in the fourth quarter of 2017. Non-GAAP operating income was $122.8 million, compared to $112.4 million in the fourth quarter of 2017. Bruker's fourth quarter 2018 non-GAAP operating margin was 22.2%, up 100 basis points (bps) from 21.2% in the fourth quarter of 2017.

Fourth quarter 2018 GAAP diluted earnings per share (EPS) were $0.50, compared to a GAAP EPS loss of $0.02 in the fourth quarter of 2017. Fourth quarter 2018 non-GAAP diluted EPS were $0.54, a 5.9% increase compared to $0.51 in the fourth quarter of 2017.

Fiscal Year 2018 Financial Results

For fiscal year 2018, Bruker's revenues increased 7.3% to $1,895.6 million, from $1,765.9 million in fiscal year 2017. In 2018, Bruker's year-over-year organic revenue growth was 4.3%. Growth from acquisitions added 1.6%, while favorable foreign currency translation contributed 1.4% to revenue growth.

In 2018, BSI segment revenues of $1,707.0 million increased 7.8% compared to 2017, including organic growth of 4.7%. BEST segment revenues in 2018 of $194.8 million increased 1.9% compared to 2017, including organic growth, net of intercompany eliminations, of 0.9%.

In fiscal year 2018, GAAP operating income was $262.4 million, compared to $219.5 million in 2017, representing a GAAP operating margin of 13.8%, compared to 12.4% in fiscal year 2017. Non-GAAP operating income was $317.9 million, compared to $280.9 million in 2017. Bruker's non-GAAP 2018 operating margin increased to 16.8%, up 90 bps from 15.9% in 2017. During 2018, volume leverage, operational improvements and favorable mix more than offset a 60 basis point negative impact from changes in foreign currency rates on non-GAAP operating margins, primarily in the first half of the year.

In fiscal year 2018, GAAP EPS were $1.14, compared to $0.49 in 2017. Non-GAAP EPS for 2018 were $1.40, an increase of 15.7% over $1.21 in 2017.

In fiscal year 2018, Bruker generated net cash from operating activities of $239.7 million, up from $154.4 million in 2017. Free cash flow in 2018 was $190.5 million, compared to $110.7 million in 2017.

A reconciliation of non-GAAP to GAAP financial measures is provided in the tables accompanying this press release.

Frank Laukien, President and CEO of Bruker, commented: "I would like to thank all of Bruker's employees and our leadership team for making good progress in 2018 with organic growth of 4.3%, and Scientific Instruments segment organic growth accelerating to 4.7%. We once again delivered on our operating margin expansion commitments, and we invested over $190 million in strategically focused acquisitions. We are very pleased that Bruker's 2018 non-GAAP EPS increased 15.7% over the prior year, and that our return on invested capital remained well above 20%."

Dr. Laukien continued: "Bruker's dual strategy of investing in our six high growth, high margin initiatives under Project Accelerate, and of driving continuous improvements under our Operational Excellence program, position us well for the future. For fiscal year 2019, Bruker expects further, gradual growth acceleration with organic revenue growth of 4% to 5%, and continuing non-GAAP operating margin improvement of 70 to 100 basis points year-over-year."

Fiscal Year (FY) 2019 Financial Outlook

Bruker is providing initial revenue growth, operating margin expansion and EPS guidance for fiscal year (FY) 2019, based on foreign exchange rates as of December 31, 2018.

For FY 2019, the Company expects 6% to 7% year-over-year revenue growth, including the following estimates:

• organic revenue growth of 4% to 5%,
• revenue growth from acquisitions of 4%, with constant-currency revenue growth of 8% to 9%, and
• a negative foreign currency translation effect on revenue of 2%.

Bruker expects an increase in FY 2019 non-GAAP operating margin of 70 bps to 100 bps year-over-year from 16.8% in FY 2018. Bruker also expects FY 2019 non-GAAP EPS of $1.54 to $1.58, a 10% to 13% increase compared to FY 2018.

For the Company's outlook for FY 2019 non-GAAP operating margin and non-GAAP EPS, we are not able to provide without unreasonable effort the most directly comparable GAAP financial measures, or reconciliations to such GAAP financial measures on a forward-looking basis. Please see "Use of Non-GAAP Financial Measures" below for a description of items excluded from our expected non-GAAP operating margin and non-GAAP EPS.

Quarterly Earnings Call

Bruker will host a conference call and webcast to discuss its financial results, business outlook, and related corporate and financial matters today at 4:30 p.m. Eastern Time. To listen to the webcast, investors can go to https://ir.bruker.com and click on the "Q4 2018 Earnings Webcast" 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 1-888-437-2685 (US toll free) or +1-412-317-6702 (international),and referencing "Bruker's Fourth Quarter 2018 Earnings Conference Call". A telephone replay of the conference call will be available by dialing 1-877-344-7529 (US toll free) or +1-412-317-0088 (international) and entering conference number: 10128355. The replay will be available beginning one hour after the end of the conference through March 11, 2019.

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 in this press release or in the earnings webcast: non-GAAP gross profit; non-GAAP gross profit margin; non-GAAP operating income; non-GAAP operating margin; 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 refer to organic revenue growth, free cash flow and return on invested capital in this press release or on the earnings webcast, 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. 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.

The presentation of these non-GAAP financial measures is not intended to be a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP and may be different from non-GAAP financial measures used by other companies, and therefore, may not be comparable among companies.  We believe these non-GAAP financial measures provide meaningful supplemental information regarding our performance, however we urge investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included in the accompanying tables, and not to rely on any single financial measure to evaluate our business. Specifically, management believes that the non-GAAP measures mentioned above provide relevant and useful information which is widely used by analysts, investors and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance. 

We use these non-GAAP financial measures to evaluate our period-over-period operating performance because our management believes this provides a more comparable measure of our continuing business by adjusting for certain items that are not reflective of the underlying performance of our business. These measures may also be useful to investors in evaluating the underlying operating performance of our business and forecasting future results.  We regularly use these 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 certain non-GAAP measures and use this information for our planning and forecasting activities. 

Additional information relating to these non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures is provided in the tables accompanying this press release following our GAAP financial statements and in our slide presentation, which is available through the "Bruker Earnings Release" hyperlink on Bruker's Investor Relations web site ir.bruker.com. 

With respect to the Company's outlook for 2019 non-GAAP operating margin, non-GAAP EPS and non-GAAP tax rate, we are not providing the most directly comparable GAAP financial measures or corresponding reconciliations to such GAAP financial measures on a forward-looking basis, because we are unable to predict with reasonable certainty certain items that may affect such measures calculated and presented in accordance with GAAP without unreasonable effort. Our expected non-GAAP operating margin, tax rate and EPS ranges exclude primarily the future impact of restructuring actions, unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments. These reconciling items are uncertain, depend on various factors outside our management's control and could significantly impact, either individually or in the aggregate, our future period operating margins, EPS and tax rate calculated and presented in accordance with GAAP.

Forward Looking Statements

Any statements contained in this press release which do not describe historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding management's expectations for future financial and operational performance, expected growth, and business outlook; statements regarding our business focus; our fiscal year 2019 outlook; and statements found under the "Use of Non-GAAP Financial Measures" section of this release. 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 indicated, 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, fluctuations in foreign currency exchange rates, 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, key suppliers and contract manufacturers, capital spending and government funding policies, changes in governmental regulations, the use and protection of intellectual property rights, litigation, and other risk factors discussed from time to time in our filings with the Securities and Exchange Commission, or SEC. 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, 2017 and subsequently filed Quarterly Reports on Form 10-Q. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law.

-tables follow-

Contacts:
Miroslava Minkova 
Director, Investor Relations & Corporate Development
Bruker Corporation 
T: +1 (978) 663 – 3660, ext. 1479 
E: [email protected]

SOURCE Bruker Corporation