Bruker second quarter revenue increases 33% y-o-y to $401.2 million

Bruker Corporation (NASDAQ: BRKR) today reported financial results for the three and six months ended June 30, 2011.

Second Quarter 2011 Highlights:

• Revenue increased by 33% year-over-year (y-o-y) to $401.2 million, or by 21% y-o-y excluding the effects of foreign currency translation
• GAAP operating income was $38.7 million, and adjusted operating income increased by 23% y-o-y to $52.2 million
• GAAP EPS was $0.13, and adjusted EPS grew 25% y-o-y to $0.20
• Opened new Centers of Excellence in Singapore and Shanghai
• Moved GC-MS factory within California, and moved ICP-MS factory from Australia to new Bruker CAM division factory in Fremont, California
• Acquired liquid chromatography and ion source technology company Michrom
• Launched compelling new NMR, preclinical MRI, AFM, mass spectrometry, microbiology, crystallography and hyperspectral FTIR imaging products

First Half Year 2011 Financial Highlights:

• Revenue increased by 31% y-o-y to $758.2 million, or by 24% excluding the effects of foreign currency translation
• GAAP operating income was $64.4 million, and adjusted operating income increased by 25% y-o-y to $89.8 million
• GAAP EPS was $0.20, and adjusted EPS grew 26% y-o-y to $0.34
• Ended first half of 2011 with all-time record backlog

Adjusted operating income and margin and adjusted EPS are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."

Financial Results

In the second quarter of 2011, revenue was $401.2 million, an increase of 33% compared to revenue of $300.9 million in the second quarter of 2010. Currency-adjusted revenue growth year-over-year was 21%, with 8% organic growth. GAAP operating income in the second quarter of 2011 was $38.7 million, compared to $37.9 million in the second quarter of 2010. GAAP net income for the second quarter of 2011 was $22.1 million, or $0.13 per diluted share, compared to GAAP net income of $22.6 million, or $0.14 per diluted share, in the second quarter of 2010.

Adjusted operating income in the second quarter of 2011 was $52.2 million, compared to $42.4 million in the second quarter of 2010. Adjusted net income for the second quarter of 2011 was $33.9 million, or $0.20 per diluted share, compared to adjusted net income of $26.5 million, or $0.16 per diluted share, in the second quarter of 2010.

For the six months ended June 30, 2011, revenue was $758.2 million, an increase of 31% compared to revenue of $578.6 million in the first half of 2010. Currency-adjusted revenue growth year-over-year was 24%, with 6% organic growth. GAAP operating income for the first six months of 2011 was $64.4 million, compared to $64.8 million during the first six months of 2010. GAAP net income for the first six months of 2011 was $33.4 million, or $0.20 per diluted share, compared to GAAP net income of $38.7 million, or $0.23 per diluted share, for the first six months of 2010.

Adjusted operating income for the first six months of 2011 was $89.8 million, or 11.8% of revenue, compared to $71.9 million, or 12.4% of revenue for the first six months of 2010. Adjusted net income for the first six months of 2011 was $56.5 million, or $0.34 per diluted share, compared to adjusted net income of $44.7 million, or $0.27 per diluted share, for the first six months of 2010.

Comment and Outlook

Frank Laukien, President and CEO, commented: "We continue to see strong demand, particularly from our industrial, clinical, homeland security and applied markets, and our major product introductions in the last eighteen months have given us very good growth and gross margin momentum. As a result, in the first half of 2011 our revenue increased by 31%, and our bookings increased by more than 50% year-over-year. Moreover, we are pleased that during the first half of 2011 our adjusted gross margins improved by 230 basis points, and our adjusted operating income and adjusted EPS grew 25% year-over-year. Our strong revenue, bookings, backlog and gross margin growth shows that our fundamental strategy with a focus on innovation, fast organic growth and disciplined acquisitions has excellent momentum."

He continued: "However, with our faster than expected bookings growth, we also saw faster expense growth in the first half of 2011, and we are not satisfied with our adjusted operating margin trends year-to-date. Accordingly, in the second quarter we began to implement various expense control measures which are expected to have a positive effect on our second half 2011 operating margins. With current foreign exchange rates and our strong bookings and record backlog, we now expect to exceed the high end of our 2011 revenue goal of $1.57 billion by $30-$50 million. Moreover, we expect sequentially stronger adjusted operating margin performance in the second half of 2011, and we are committed to achieving our BSI segment adjusted EPS goal of $0.90 to $0.93 for the full year."

Bruker Scientific Instruments (BSI) Segment

In the second quarter of 2011, BSI revenue was $377.9 million, an increase of 33% compared to revenue of $284.9 in the second quarter of 2010. Adjusted operating margin for the BSI segment in the second quarter of 2011 was 13.7%, compared to 15.7% in the second quarter of 2010. Adjusted EPS for the BSI segment in the second quarter of 2011 was $0.20, compared to $0.17 in the second quarter of 2010.

For the six months ended June 30, 2011, BSI revenue was $713.7 million, an increase of 31% compared to revenue of $545.2 million in the first half of 2010. Adjusted operating margin for the BSI segment for the first six months of 2011 was 12.8%, compared to 13.7% for the first six months of 2010. Adjusted EPS for the BSI Segment for the first six months of 2011 was $0.36 per diluted share, compared to $0.29 per diluted share for the first six months of 2010.

Bruker Energy & Supercon Technologies (BEST) Segment

In the second quarter of 2011, BEST revenue was $28.1 million, an increase of 55% compared to revenue of $18.1 million for the second quarter of 2010. Adjusted loss per diluted share for the BEST segment in the second quarter of 2011 was ($0.00), compared to $(0.01) in the second quarter of 2010.

For the six months ended June 30, 2011, revenue for BEST was $52.1 million, an increase of 34% compared to revenue of $38.8 million in the first half of 2010. Adjusted loss per diluted share for the BEST segment for the first six months of 2011 was ($0.01), compared to ($0.02) for the first six months of 2010.