Company Reports Significant Sequential Improvement with Positive
Third Quarter 2004 Operating Income and Cash Flows from
Operations
BILLERICA, Mass.--(BUSINESS WIRE)--Nov. 3, 2004--
Bruker BioSciences Corporation (NASDAQ: BRKR) today reports its
financial results for the third quarter and nine months ended
September 30, 2004. On July 1, 2003, Bruker Daltonics Inc. merged with
Bruker AXS Inc. to form Bruker BioSciences Corporation. All results
for periods prior to this merger are historical combined results of
the two previously separate companies.
For the third quarter of 2004, Bruker BioSciences reported a 5%
increase in revenue to $66.5 million, compared to revenue of $63.1
million in the third quarter of 2003. For the nine months ended
September 30, 2004, revenue increased 6% to $198.8 million, compared
to revenue of $187.0 million for the same period last year.
In the third quarter of 2004, GAAP net loss was $(2.7) million, or
$(0.03) per diluted share, compared to a net loss of $(14.7) million,
or $(0.17) per diluted share, in the third quarter of 2003. During the
third quarter of 2004, the Company wrote off its remaining investments
in two proteomics companies in the amount of $1.6 million.
In the third quarter of 2004, adjusted net loss, as defined below,
was $(1.0) million, or $(0.01) per diluted share, compared to adjusted
net income of $0.5 million, or $0.01 per diluted share, in the third
quarter of 2003.
For the nine months ended September 30, 2004, GAAP net loss was
$(6.4) million, or $(0.07) per diluted share, compared to a net loss
of $(17.9) million, or $(0.21) per diluted share, for the same period
last year. During the nine months ended September 30, 2004, adjusted
net loss was $(3.7) million, or $(0.04) per diluted share, compared to
adjusted net income of $1.6 million, or $0.02 per diluted share, for
the same period last year. Adjusted net income/loss is a non-GAAP
financial measure that excludes the write-off of investments, merger
related charges and adjustments for the pre-merger minority interest
in Bruker AXS.
The financial schedules also reflect a reclassification of service
costs from marketing and selling to cost of product revenues as
explained in the financial schedules.
COMMENTS AND OUTLOOK
Frank Laukien, President and CEO, stated: "In the third quarter,
we were still light on the revenue side. While most of our new
products announced at Pittcon and ASMS of this year are now shipping
and generating revenue, some began to do so only in the middle of the
third quarter. We also experienced approximately $2 million in delays
by customers who have placed orders with us, but were not yet ready
for us to install their systems."
He continued: "We are very committed to driving towards
industry-standard profitability over the next three years. The most
important profitability drivers clearly remain our revenue growth, our
further gross margin improvement and the leveraging off of our
expenses. In addition, in September 2004 we announced a productivity
initiative that is expected to save the Company $6 million annually,
once fully effective. The benefits from this productivity initiative
are expected to be realized in part in the fourth quarter of 2004, and
in full in the first half of 2005. Moreover, we expect to announce
additional restructuring and cost-cutting measures prior to the end of
the year."
Dr. Laukien expanded on the general business situation: "In the
first nine months of 2004, our Bruker Daltonics business has
experienced modest growth in revenue and order bookings, whereas our
Bruker AXS business has experienced strong growth in revenue, and even
stronger growth in order bookings of more than 20%, compared to the
first nine months of 2003. Looking forward, we expect further
improvements in the fourth quarter 2004 with sequential increases in
revenue and operating income. Overall, we believe we have the drivers
in place for a return to double-digit top-line growth in 2005, while
we focus on significantly improving our profitability and cash flow."
William Knight, recently appointed Chief Financial Officer,
commented: "Sequentially, we have made considerable operational
progress in the third quarter 2004 compared to our second quarter 2004
results. Our third quarter 2004 gross margins have recovered
year-over-year, as well as sequentially compared to the second quarter
of this year. This resulted in operating income of $0.26 million in
the third quarter, compared to an operating loss of ($5.3) million in
the second quarter. Also, in the third quarter 2004 we generated cash
from operations of $0.5 million, compared to a use of cash by
operations of ($7.2) million in the second quarter of 2004."
He continued: "While these gross margin and cash flow trends are
encouraging, in the third quarter our expenses were still too high. In
addition, in the third quarter we wrote off our remaining investments
in two proteomics companies, and we incurred $0.96 million in income
tax expenses, as we could not take a tax benefit for domestic losses
and the investment write-off. Moreover, in this third quarter, we
incurred approximately $0.5 million in additional restructuring
expenses and Sarbanes-Oxley expenses and fees."
Mr. Knight provided a forecast for the fourth quarter: "We
continue to have a very high backlog, and we expect our recently
introduced new products to contribute to healthy order bookings. As
the Company mostly sells 'big ticket' items, we may from time to time
experience significant fluctuations between our quarterly guidance and
our actual financial results. Keeping in mind these limitations to our
visibility, for the fourth quarter of 2004 we anticipate revenue of
$72 to $78 million and adjusted EPS of $0.00 to $0.03 per diluted
share."
OPERATING BUSINESSES
Set forth below is selected financial information for Bruker
BioSciences' two operating businesses: Bruker Daltonics (life-science
mass spectrometry and NBC detection business) and Bruker AXS (x-ray
analysis business):
BRUKER DALTONICS
In the third quarter of 2004, revenue for the Bruker Daltonics
business decreased 6% to $34.2 million, from $36.3 million in the
third quarter of 2003. For the nine months ended September 30, 2004,
revenue for the Bruker Daltonics business increased 3% to $107.9
million, from $104.8 million for the same period last year.
For the nine months ended September 30, 2004, Bruker Daltonics
revenue was derived 72% from life-science mass spectrometry systems,
9% from substance detection systems, and 19% from after-market sales.
For the third quarter of 2004, adjusted EBITDA was $5.3 million,
compared to $4.3 million for the third quarter of 2003. For the nine
months ended September 30, 2004, adjusted EBITDA was $12.0 million,
compared to $12.1 million for the same period last year. See the
accompanying tables for a reconciliation of non-GAAP financial
measures to the most directly comparable GAAP financial measures.
BRUKER AXS
Revenues for the Bruker AXS business increased 20% to $32.3
million in the third quarter of 2004, compared to $26.8 million in the
third quarter of 2003. For the nine months ended September 30, 2004,
revenues for the Bruker AXS business increased 11% to $90.9 million,
compared to $82.2 million for the same period last year. Revenues
increased across all product lines as well as for after-market sales.
For the nine months ended September 30, 2004, Bruker AXS revenue
was derived 69% from x-ray systems and 31% from aftermarket sales.
Adjusted EBITDA was $1.7 million in the third quarter of 2004,
compared to $1.0 million in the third quarter of 2003. Adjusted EBITDA
was $3.0 million for the nine months ended September 30, 2004,
compared to $3.1 million for the same period last year. See the
accompanying tables for a reconciliation of non-GAAP financial
measures to the most directly comparable GAAP financial measures.
USE OF NON-GAAP FINANCIAL MEASURES
In addition to the financial measures prepared in accordance with
generally accepted accounting principles (GAAP), we use the non-GAAP
measures of adjusted net income, EPS, and EBITDA. Adjusted net income
and EPS exclude certain items including amortization of
acquisition-related assets, write-off of investments, other special
charges, and adjustments for the pre-merger minority interest in
Bruker AXS. We exclude these items because they are outside of our
normal operations and, in certain cases, are difficult to forecast
accurately for future periods. Adjusted EBITDA is defined as US GAAP
operating income (loss) excluding depreciation and amortization
expense, write-off of investments and other special charges. We
believe that the inclusion of such non-GAAP measures helps investors
to gain a better understanding of our core operating results and
future prospects, consistent with how management measures and
forecasts the Company's performance, especially when comparing such
results to previous periods or forecasts. However, the non-GAAP
financial measures included in this press release are not meant to be
a better presentation or a substitute for results of operations
prepared in accordance with GAAP. Reconciliations of such non-GAAP
financial measures to the most directly comparable GAAP financial
measures are set forth in the accompanying tables.
EARNINGS CONFERENCE CALL
Bruker BioSciences will host an operator-assisted earnings
conference call at 5 p.m. Eastern Time on Wednesday, November 3, 2004.
To listen to the webcast, investors can go to
www.bruker-biosciences.com and click on the live web broadcast symbol.
The webcast will be available through the Company web site for 30
days. Investors can also listen and participate on the telephone in
the US and Canada by calling 888-339-2688, or 617-847-3007 outside the
US and Canada. Investors should refer to the Bruker BioSciences
Quarterly Earnings Call. A telephone replay of the conference call
will be available one hour after the conference call by dialing
888-286-8010 in the US and Canada, or 617-801-6888 outside the US and
Canada, and then entering replay pass code 94879792.
ABOUT BRUKER BIOSCIENCES
Bruker BioSciences Corporation, headquartered in Billerica,
Massachusetts, is the publicly traded parent company of Bruker
Daltonics Inc. and Bruker AXS Inc. Bruker AXS is a leading developer
and provider of life science and advanced materials research tools
based on x-ray technology. Bruker Daltonics is a leading developer and
provider of innovative life science tools based on mass spectrometry.
Bruker Daltonics also offers a broad line of nuclear, biological and
chemical (NBC) detection products for defense and homeland security.
For more information, please visit www.bruker-biosciences.com
CAUTIONARY STATEMENT
Any statements contained in this press release that do not
describe historical facts may constitute forward-looking statements as
that term is defined in the Private Securities Litigation Reform Act
of 1995. Any forward-looking statements contained herein are based on
current expectations, but are subject to a number of risks and
uncertainties. The factors that could cause actual future results to
differ materially from current expectations include, but are not
limited to, risks and uncertainties relating to the Company's
reorganization strategies, integration risks, failure of conditions,
technological approaches, product development, market acceptance, cost
and pricing of the Company's products, changes in governmental
regulations, capital spending and government funding policies, FDA and
other regulatory approvals to the extent applicable, competition, the
intellectual property of others, patent protection and litigation.
These and other factors are identified and described in more detail in
our filings with the SEC, including, without limitation, our
respective annual reports on Form 10-K for the year ended December 31,
2003, our most recent quarterly reports on Form 10-Q, and our current
reports on Form 8-K. We disclaim any intent or obligation to update
these forward-looking statements.
Condensed consolidated statements of operations, reconciliations,
operating business information, and balance sheets follow for Bruker
BioSciences.
Bruker BioSciences Corporation
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
2004 2003 2004 2003
-------- --------- --------- ---------
Product revenues $65,842 $61,912 $197,562 $185,817
Other revenues 635 1,146 1,217 1,203
-------- --------- --------- ---------
Net revenues 66,477 63,058 198,779 187,020
-------- --------- --------- ---------
Costs and operating expenses:
Cost of product revenues (a) 34,744 35,035 110,131 104,844
Sales and marketing (a) 14,915 14,071 44,630 41,344
General and administrative 5,257 4,487 14,406 12,547
Research and development 11,306 9,572 32,668 28,165
Reversal of liability accrual - - - (1,929)
Other special charges - 5,440 - 11,674
-------- --------- --------- ---------
Total costs and operating
expenses 66,222 68,605 201,835 196,645
-------- --------- --------- ---------
Operating income (loss) 255 (5,547) (3,056) (9,625)
Interest and other income
(expense), net (1,902) (154) (2,768) 181
-------- --------- --------- ---------
Loss before income tax provision
and minority
interest in consolidated
subsidiaries (1,647) (5,701) (5,824) (9,444)
Income tax provision 955 8,970 395 9,276
-------- --------- --------- ---------
Loss before minority interest (2,602) (14,671) (6,219) (18,720)
Minority interest in
consolidated subsidiaries 115 (2) 145 (856)
-------- --------- --------- ---------
Net loss $(2,717) $(14,669) $(6,364) $(17,864)
======== ========= ========= =========
Net loss per share - basic and
diluted $(0.03) $(0.17) $(0.07) $(0.21)
======== ========= ========= =========
Weighted average shares
outstanding -
basic and diluted 89,456 86,003 88,156 86,002
======== ========= ========= =========
(a)Certain service costs previously classified in sales and marketing
expenses have been reclassified to cost of product revenues in the
following amounts: $0.4 million for the three months ended
September 30, 2003, $1.9 million for the nine months ended
September 30, 2003 and $2.5 million for the nine months ended
September 30, 2004.
Bruker BioSciences Corporation
ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -------------------
2004 2003 2004 2003
-------- -------- --------- ---------
Product revenues $65,842 $61,912 $197,562 $185,817
Other revenues 635 1,146 1,217 1,203
-------- -------- --------- ---------
Net revenues 66,477 63,058 198,779 187,020
-------- -------- --------- ---------
Costs and operating expenses:
Cost of product revenues (a) 34,744 34,172 110,131 103,981
Sales and marketing (a) 14,915 14,071 44,630 41,344
General and administrative 5,139 4,366 14,052 12,426
Research and development 11,306 9,570 32,668 28,163
Reversal of liability accrual - - - (1,929)
-------- -------- --------- ---------
Total costs and operating
expenses 66,104 62,179 201,481 183,985
-------- -------- --------- ---------
Income (loss) before income tax
provision and
minority interest in
consolidated subsidiaries 373 879 (2,702) 3,035
Interest and other income
(expense), net (255) (154) (447) 181
-------- -------- --------- ---------
Income (loss) before taxes 118 725 (3,149) 3,216
Income tax provision 955 240 395 1,595
-------- -------- --------- ---------
Income (loss) before minority
interest (837) 485 (3,544) 1,621
Minority interest in subsidiaries 115 (2) 145 (9)
-------- -------- --------- ---------
Net income (loss) $(952) $487 $(3,689) $1,630
======== ======== ========= =========
Net income (loss) per share -
basic and diluted $(0.01) $0.01 $(0.04) $0.02
======== ======== ========= =========
Weighted average shares
outstanding:
Basic 89,456 86,003 88,156 86,002
======== ======== ========= =========
Diluted 89,456 86,265 88,156 86,156
======== ======== ========= =========
(a) Certain service costs previously classified in sales and marketing
expenses have been reclassified to cost of product revenues in the
following amounts: $0.4 million for the three months ended
September 30, 2003, $1.9 million for the nine months ended
September 30, 2003 and $2.5 million for the nine months ended
September 30, 2004.
Bruker BioSciences Corporation
RECONCILIATION FROM GAAP NET INCOME (LOSS) TO ADJUSTED
NET INCOME (LOSS)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2004 2003 2004 2003
-------- --------- -------- ---------
GAAP net loss $(2,717) $(14,669) $(6,364) $(17,864)
Adjustments, net of tax:
Amortization of acquisition-
related assets 118 283 354 283
Write-off of investments 1,647 - 2,321 -
Merger related charges - 6,143 - 11,330
Income tax valuation allowance - 8,730 - 8,730
Minority interest in
subsidiaries - - - (849)
-------- --------- -------- ---------
Adjusted net income (loss) $(952) $487 $(3,689) $1,630
======== ========= ======== =========
Adjusted earnings (loss) per
share $(0.01) $0.01 $(0.04) $0.02
======== ========= ======== =========
Weighted average shares
outstanding:
Basic 89,456 86,003 88,156 86,002
======== ========= ======== =========
Diluted 89,456 86,265 88,156 86,156
======== ========= ======== =========
Bruker BioSciences Corporation
RECONCILIATION FROM GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2004 2003 2004 2003
-------- --------- -------- ---------
GAAP net loss $(2,717) $(14,669) $(6,364) $(17,864)
Adjustments:
Interest and other (income)
expense, net 1,902 154 2,768 (181)
Income tax expense 955 8,970 395 9,276
Minority interest in
subsidiaries 115 (2) 145 (856)
-------- --------- -------- ---------
Operating income (loss) 255 (5,547) (3,056) (9,625)
Depreciation and amortization 4,240 4,482 13,890 12,184
-------- --------- -------- ---------
EBITDA 4,495 (1,065) 10,834 2,559
Write-off of investments 1,647 - 2,321 -
Merger related charges - 6,143 - 12,377
-------- --------- -------- ---------
Adjusted EBITDA $6,142 $5,078 $13,155 $14,936
======== ========= ======== =========
Bruker BioSciences Corporation
BRUKER DALTONICS SELECTED OPERATING BUSINESS INFORMATION
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -------------------
2004 2003 2004 2003
-------- -------- --------- ---------
Net revenues $34,218 $36,250 $107,928 $104,780
======== ======== ========= =========
Operating income $1,872 $1,564 $2,390 $1,414
Depreciation and amortization 2,156 2,643 8,007 7,766
-------- -------- --------- ---------
EBITDA 4,028 4,207 10,397 9,180
Write-off of investments 1,297 - 1,621 -
Merger transaction charges - 91 - 2,906
-------- -------- --------- ---------
Adjusted EBITDA $5,325 $4,298 $12,018 $12,086
======== ======== ========= =========
Bruker BioSciences Corporation
BRUKER AXS SELECTED OPERATING BUSINESS INFORMATION
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2004 2003 2004 2003
------------------ ------------------
Net revenues $32,259 $26,808 $90,851 $82,240
================== ==================
Operating loss $(775) $(6,909) $(3,542)$(10,836)
Depreciation and amortization 2,084 1,839 5,883 4,418
------------------ ------------------
EBITDA 1,309 (5,070) 2,341 (6,418)
Write-off of investments 350 - 700 -
Merger related charges - 6,052 - 9,471
------------------ ------------------
Adjusted EBITDA $1,659 $982 $3,041 $3,053
================== ==================
Bruker BioSciences Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2004 2003
-------------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and short-term investments $76,616 $76,837
Accounts receivable, net 55,635 54,689
Inventories 106,786 110,052
Other current assets 17,668 9,047
-------------- ------------
Total current assets 256,705 250,625
Property and equipment, net 79,711 81,354
Intangible and other assets 17,569 19,052
-------------- ------------
Total assets $353,985 $351,031
============== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $24,184 $18,587
Accounts payable 23,393 24,909
Other current liabilities 59,186 65,104
-------------- ------------
Total current liabilities 106,763 108,600
Long-term debt 21,104 26,374
Other long-term liabilities 16,936 13,507
Minority interest in subsidiaries 406 124
Total shareholders' equity 208,776 202,426
-------------- ------------
Total liabilities and shareholders' equity $353,985 $351,031
============== ============
CONTACT: Bruker BioSciences Corporation
Michael Willett, 978-663-3660, ext. 1411
Email: ir@bruker-biosciences.com
SOURCE: Bruker BioSciences Corporation
Bruker Corporation
