Bruker(BRKR) - 2025 Q1 - Quarterly Report

Part I Unaudited Condensed Consolidated Financial Statements This section presents Bruker Corporation's unaudited financial statements for Q1 2025, including balance sheets, income statements, and cash flows, with notes on accounting policies and key events Unaudited Condensed Consolidated Balance Sheets As of March 31, 2025, total assets increased to $5.93 billion from $5.81 billion at year-end 2024, driven by higher inventories and other assets, while total liabilities rose to $4.08 billion from $3.98 billion, primarily due to increases in deferred revenue and other current liabilities, and total shareholders' equity grew to $1.83 billion Condensed Consolidated Balance Sheet Data (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $5,933.1 | $5,806.7 | | Total Current Assets | $2,111.5 | $2,053.2 | | Goodwill and intangible assets, net | $2,434.6 | $2,419.8 | | Total Liabilities | $4,081.9 | $3,991.5 | | Total Current Liabilities | $1,344.9 | $1,281.3 | | Long-term debt | $2,076.1 | $2,061.8 | | Total Shareholders' Equity | $1,832.9 | $1,797.1 | Unaudited Condensed Consolidated Statements of Operations For the first quarter of 2025, total revenue increased by 11.0% year-over-year to $801.4 million, but operating income fell significantly to $31.8 million from $64.8 million in Q1 2024, largely due to higher operating expenses, resulting in net income attributable to Bruker Corporation decreasing to $17.4 million, or $0.11 per diluted share Q1 2025 vs. Q1 2024 Statement of Operations (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $801.4 | $721.7 | 11.0% | | Gross Profit | $391.2 | $352.8 | 10.9% | | Operating Income | $31.8 | $64.8 | (50.9)% | | Net Income Attributable to Bruker | $17.4 | $50.9 | (65.8)% | | Diluted EPS | $0.11 | $0.35 | (68.6)% | Unaudited Condensed Consolidated Statements of Cash Flows In Q1 2025, net cash provided by operating activities significantly improved to $65.0 million from $21.8 million in Q1 2024, while net cash used in investing activities decreased sharply to $26.1 million from $304.2 million, and financing activities used $51.2 million in cash, a reversal from the $151.7 million provided in the prior-year quarter Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $65.0 | $21.8 | | Net cash used in investing activities | $(26.1) | $(304.2) | | Net cash provided by (used in) financing activities | $(51.2) | $151.7 | | Net increase (decrease) in cash | $1.0 | $(148.3) | Notes to Unaudited Condensed Consolidated Financial Statements This section details Bruker's business segments, acquisition updates, goodwill, legal contingencies, and a subsequent acquisition of RECIPE Chemicals + Instruments GmbH - The company operates through four reportable segments: BSI BioSpin, BSI CALID, BSI NANO, and Bruker Energy & Supercon Technologies (BEST)[21] - No acquisitions were completed in the first three months of 2025, with the report providing final valuation details for 2024 acquisitions of Chemspeed, and provisional details for NanoString and ELITechGroup[27][34][35] - Goodwill increased slightly to $1.53 billion as of March 31, 2025, primarily due to foreign currency effects[50] - The company is involved in significant patent litigation matters inherited from its acquisitions of PhenomeX (vs AbCellera) and NanoString (vs 10x Genomics), with the accrual for legal matters being $96.4 million as of March 31, 2025[98][100][101] - Subsequent to the quarter end, on April 14, 2025, the company acquired a 69.6% stake in RECIPE Chemicals + Instruments GmbH for approximately $65.3 million[112] Management's Discussion and Analysis (MD&A) Management discusses Q1 2025 revenue growth and operating income decline due to acquisition and litigation costs, highlighting improved operating cash flow and liquidity Results of Operations Revenue for Q1 2025 grew 11.0% to $801.4 million, with BSI CALID and BSI BioSpin segments showing strong growth largely due to 2024 acquisitions, but operating income fell to $31.8 million from $64.8 million YoY, pressured by increased SG&A, R&D, and a significant jump in 'Other charges, net' Revenue by Segment (in millions) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | BSI BioSpin | $207.8 | $182.8 | 13.7% | | BSI CALID | $280.1 | $227.9 | 22.9% | | BSI NANO | $256.6 | $240.4 | 6.7% | | BEST | $59.3 | $73.1 | (18.9)% | | Total | $801.4 | $721.7 | 11.0% | - The increase in 'Other charges, net' to $36.9 million was primarily due to $18.6 million of acquisition-related litigation charges (related to BCA and NanoString), $7.6 million in restructuring charges, and $2.1 million in other acquisition-related expenses[141] - The effective tax rate increased to 34.7% from 27.7% in the prior year, mainly due to changes in jurisdictional mix and the impact of Pillar 2 global minimum tax rules, which added 2.1% to the rate[146][147] Liquidity and Capital Resources The company anticipates existing cash and credit facilities are sufficient for the next twelve months, with net cash from operations at $65.0 million, total debt at $2.1 billion, and access to a $900.0 million revolving credit facility, while repurchasing $10.0 million of common stock during the quarter - The company believes existing cash and credit facilities are sufficient to support operating and investing needs for at least the next twelve months[148] Key Cash Flow Data (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $65.0 | $21.8 | | Net cash used in investing activities | $(26.1) | $(304.2) | | Net cash provided by (used in) financing activities | $(51.2) | $151.7 | - During Q1 2025, the company repurchased 200,731 shares for $10.0 million under its share repurchase program, with no shares repurchased in Q1 2024[154] - As of March 31, 2025, the company had total outstanding debt of $2.1 billion and a revolving credit facility providing up to $900.0 million in backup liquidity[155] Quantitative and Qualitative Disclosures About Market Risk There were no material changes in the company's exposure to market risk from December 31, 2024, except for newly identified tariff risks, as a new universal 10% baseline tariff on all U.S. imports, announced on April 2, 2025, is expected to increase the company's cost of goods sold - A new universal baseline tariff of 10% on all U.S. imports, announced on April 2, 2025, is expected to increase the company's costs of goods sold[159] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[160] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[162] Part II Legal Proceedings The company is involved in various legal proceedings arising in the ordinary course of business, with material pending legal matters disclosed in Note 20 of the financial statements, detailing significant patent litigation, and is also subject to governmental investigations from time to time - Other than matters disclosed in Note 20 (Commitments and Contingencies), the company is not party to any material pending legal proceedings outside the ordinary course of business[163] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - The report refers to the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2024, indicating no material changes[165] Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of 2025, the company repurchased 200,731 shares of its common stock at an average price of $49.81 per share, for a total cost of approximately $10.0 million, with approximately $359.9 million remaining available for future repurchases under the authorized program as of March 31, 2025 Share Repurchase Activity for Q1 2025 | Period | Total Shares Purchased | Average Price Paid | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | Jan 2025 | 0 | $— | $0 | | Feb 2025 | 200,731 | $49.81 | $10.0M | | Mar 2025 | 0 | $— | $0 | | Total Q1 | 200,731 | $49.81 | $10.0M | - As of the end of the quarter, $359.9 million remained available for repurchase under the 2023 Repurchase Program, which authorizes up to $500.0 million in buybacks over a two-year period[167][168] Other Information On February 18, 2025, Dr. Cynthia Friend, a member of the Board of Directors, adopted a Rule 10b5-1 trading plan for the potential sale of company shares underlying her equity awards, set to terminate by December 15, 2025, or when all shares under the plan are sold - On February 18, 2025, Director Dr. Cynthia Friend adopted a Rule 10b5-1 trading plan to sell up to 5,192 shares from vested RSUs and 4,300 shares from stock options[169] Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications as required by the Sarbanes-Oxley Act (Sections 302 and 906) and the Inline XBRL financial data files - Exhibits filed include CEO/CFO certifications (31.1, 31.2, 32.1) and Inline XBRL documents (101 series)[171]