# Bruker Corp: Form 10-Q for the period ended Jun 30, 2024

- Company: [Bruker Corp](/companies/brkr.md) (CIK 1109354)
- Form: 10-Q
- Filed: 2024-08-09
- Accepted by EDGAR: Aug 9, 2024, 16:41 ET
- Period: 2024-06-30
- Accession: 0000950170-24-094832
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1109354/000095017024094832/brkr-20240630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1109354/000095017024094832/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-04-01 to 2024-06-30 | $800.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2024-01-01 to 2024-06-30 | $1.52bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-04-01 to 2024-06-30 | $416.1m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2024-01-01 to 2024-06-30 | $785.0m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-04-01 to 2024-06-30 | $384.6m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2024-01-01 to 2024-06-30 | $737.4m | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-04-01 to 2024-06-30 | $92.2m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2024-01-01 to 2024-06-30 | $174.0m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-04-01 to 2024-06-30 | $221.3m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2024-01-01 to 2024-06-30 | $416.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | $48.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-01-01 to 2024-06-30 | $112.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-04-01 to 2024-06-30 | $15.7m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2024-01-01 to 2024-06-30 | $20.7m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-04-01 to 2024-06-30 | $16.1m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-01-01 to 2024-06-30 | $35.9m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | $7.6m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | $58.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | $0.05 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | $0.40 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | $0.05 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | $0.40 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 148 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-01-01 to 2024-06-30 | 147 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | $22.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2024-01-01 to 2024-06-30 | $46.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2024-01-01 to 2024-06-30 | $15.0m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 6 months, 2024-01-01 to 2024-06-30 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-06-30 | $169.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $2.15bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $5.90bn | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $1.30bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $4.08bn | us-gaap:Liabilities |
| Long-term debt | at 2024-06-30 | $2.13bn | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2024-06-30 | $1.79bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 42,941 characters.

The following discussion of our financial condition and results of operations should be read in conjunction with our interim unaudited condensed consolidated financial statements and the notes to those statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q, and in conjunction with the unaudited condensed consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023.

Any statements other than statements of historical fact contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report on Form 10-Q may be deemed to be 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. Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “seek,” “may,” “will,” “intend,” “estimate,” “should” and similar expressions are intended to identify forward-looking statements.

Forward-looking statements include, but are not limited to, statements regarding:

- the impact of supply chain challenges on our business and operations;
- our working capital requirements and the sufficiency of our cash, borrowings and proceeds of indebtedness to fund our operations and investment activities;
- our plans to make capital investments;
- the impact of changes to tax and accounting rules and changes in law;
- fluctuations in estimates impacting costs related to our self-funded health insurance plan;
- our expectations regarding backlog and revenue;
- our expectations and the impact of our restructuring initiatives;
- the impact of our global IT transformation activities;
- the impact of foreign currency exchange rates and changes in commodity prices; and
- any other statements that address events or developments that the Company intends or believes will or may occur in the future.

Actual results may differ from those referred to in any forward-looking statements due to a number of factors, including, but not limited to, the risks described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and in this Quarterly Report on Form 10-Q, including the factors presented on page 35-36. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law.

### Non-GAAP Measures

Although our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, we believe that describing revenue and expenses, excluding the effects of foreign currency, acquisitions and divestitures, as well as certain other charges, net, provides meaningful supplemental information regarding our performance. We rely internally on certain measures that are not calculated according to GAAP. These measures are organic revenue, free cash flow, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income and non-GAAP operating margin. Our management believes that these financial measures provide relevant and useful information that is widely used by equity analysts, investors and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance.

We define the term organic revenue as GAAP revenue excluding the effect of foreign currency translation changes and the effect of acquisitions and divestitures. We define the term non-GAAP gross profit as GAAP gross profit with certain non-GAAP measures excluded and non-GAAP gross profit margin as GAAP gross profit margin with certain non-GAAP measures excluded. We define the term non-GAAP operating income as GAAP operating income with certain non-GAAP measures excluded and non-GAAP operating margin as GAAP operating margin with certain non-GAAP measures excluded. These non-GAAP measures exclude costs related to restructuring actions, acquisition and related integration expenses, amortization of acquired intangible assets, costs associated with our global information technology transition initiatives, and other non-operational costs, and we believe these are useful measures to evaluate our continuing business.

We define free cash flow as GAAP 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 as it indicates the amount of cash generated after additions to property, plant, and equipment which is available for, among other things, investments in our business, acquisitions, share repurchases, dividends and repayment of debt.

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 such non-GAAP measures and use this information for our planning and forecasting activities. These measures may also be useful to investors in evaluating the underlying operating performance of our business. 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 it may be different from non-GAAP financial measures used by other companies, and therefore, may not be comparable among companies.

### OVERVIEW

We are a developer, manufacturer and distributor of high-performance scientific instruments and analytical and diagnostic solutions that enable our customers to explore life and materials at microscopic, molecular and cellular levels. Our corporate headquarters are located in Billerica, Massachusetts. We maintain major technical and manufacturing centers in Europe, Asia and North America and we have sales offices located throughout the world. Bruker is organized into four reportable segments: the Bruker Scientific Instruments (BSI) BioSpin Segment, the BSI Chemicals, Applied Markets, Life Science, In Vitro Diagnostics, Detection (CALID) Segment, the BSI Nano Segment and the Bruker Energy & Supercon Technologies (BEST) Segment.

During the first six months of 2024, Bruker acquired Elitech, Nanostring and Chemspeed. These businesses extend our capabilities in molecular diagnostics and life science analytical instruments focused on spatial biology, respectively. The Chemspeed acquisition brings to Bruker new capabilities in lab automation. The Elitech business will be integrated in the BSI CALD segment, the Nanostring acquisition will be integrated into the BSI Nano segment and the Chemspeed business will be integrated into the BSI BioSpin segment.

Revenue for the three months ended June 30, 2024, increased by $118.8 million, or 17.4%, to $800.7 million, compared to $681.9 million for the comparable period in 2023. Approximately 11.1% of the revenue growth during the three months ended June 30, 2024, was attributed to acquisitions, and was offset by a decrease of 1.1% from unfavorable foreign exchange rate movements. Excluding the unfavorable effects of foreign exchange rate movements and our recent acquisitions, our organic revenue, a non-GAAP measure, increased 7.4%. Revenue increases were driven by demand for our differentiated high-value scientific instruments and life science solutions compared to the same period in 2023.

Revenue for the six months ended June 30, 2024, increased by $155.2 million, or 11.4%, to $1,522.4 million, compared to $1,367.2 million for the comparable period in 2023. Approximately 7.4% of the revenue growth during the six months ended June 30, 2024, was attributed to acquisitions, and offset by a decrease of 0.5% from unfavorable foreign exchange rate movements. Excluding the unfavorable effects of foreign exchange rate movements and our recent acquisitions, our organic revenue, a non-GAAP measure, increased 4.5%. Revenue increases were driven by demand for our differentiated high-value scientific instruments and life science solutions compared to the same period in 2023.

Our gross profit margin decreased to 48.0% during the three months ended June 30, 2024, as compared to 49.9% in the same period in 2023, as a result of product mix, acquisition related costs, increases in purchased intangible amortization related to acquisitions in the period, and unfavorable foreign exchange rate movements.

Our gross profit margin decreased to 48.4% during the six months ended June 30, 2024, as compared to 51.2% in the same period in 2023, as a result of product mix, acquisition related costs, increases in purchased intangible amortization related to acquisitions in the period, and unfavorable foreign exchange rate movements.

Our income tax provision in the three months ended June 30, 2024, and 2023 was $16.1 million and $19.9 million, respectively, representing effective tax rates of 67.4% and 25.7%, respectively. Our income tax provision in the six months ended June 30, 2024, and 2023 was $35.9 million and $49.8 million, respectively, representing effective tax rates of 37.6% and 27.1%, respectively. The increase in the Company's effective tax rate was primarily due to change in jurisdictional mix, and the impact of valuation allowance recorded on capital loss carryforwards related to the impairment charges on strategic investments.

Diluted earnings per share for the three months ended June 30, 2024, was $0.05, a decrease of $0.34 compared to $0.39 per share in the same period in 2023. Diluted earnings per share for the six months ended June 30, 2024, was $0.40, a decrease of $0.52 compared to $0.91 per share in the same period in 2023. The decrease in diluted earnings per share in both the three and six months ended June 30, 2024, was driven primarily by net income, which decreased compared to the same periods in the prior year related to mix of profitability from acquisitions and acquisition related expenses.

The following table presents a reconciliation from net cash provided by operating activities, which is the most directly comparable GAAP operating financial measure, to free cash flow, a non-GAAP measure, as used by management (in millions):

|  | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| GAAP net cash provided by operating activities | $22.9 | $100.5 |
| Less: purchases of property, plant and equipment | (46.0) | (48.5) |
| Free cash flow | $(23.1) | $52.0 |

The following table presents reconciliations from gross profit and gross profit margin, which are the most directly comparable GAAP operating performance measures, to non-GAAP gross profit and non-GAAP gross profit margin as used by management (in millions):

|  | Three Months Ended June 30, 2024 |  | 2023 |  | Six Months Ended June 30, 2024 |  | 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Gross profit | $384.6 | 48.0% | $340.5 | 49.9% | $737.4 | 48.4% | $700.2 | 51.2% |
| Non-GAAP adjustments: |  |  |  |  |  |  |  |  |
| Restructuring costs | 4.9 | 0.6% | 0.1 | — | 8.6 | 0.6% | 0.3 | — |
| Acquisition-related costs | 8.7 | 1.1% | 0.4 | 0.1% | 11.7 | 0.8% | 0.5 | 0.1% |
| Purchased intangible amortization | 12.0 | 1.5% | 5.6 | 0.8% | 19.8 | 1.3% | 11.0 | 0.8% |
| Other costs | 0.9 | 0.1% | 0.7 | 0.1% | 3.0 | 0.2% | 1.2 | 0.1% |
| Non-GAAP gross profit | $411.1 | 51.3% | $347.3 | 50.9% | $780.5 | 51.3% | $713.2 | 52.2% |

Our non-GAAP gross profit margin increased in the three months ended June 30, 2024, as compared to the same period in 2023, as result of product mix and volume leverage partially offset by net unfavorable impact of foreign exchange rate movements, and costs contributed by acquisitions compared to 2023.

Our non-GAAP gross profit margin decreased in the six months ended June 30, 2024, as compared to the same period in 2023. The decrease in non-GAAP gross margin was primarily due to acquisitions.

The following table presents reconciliations from operating income and operating margin, which are the most directly comparable GAAP operating performance measures, to non-GAAP operating income and non-GAAP operating margin as used by management (in millions):

|  | Three Months Ended June 30, 2024 |  | 2023 |  | Six Months Ended June 30, 2024 |  | 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Operating income | $48.1 | 6.0% | $86.2 | 12.6% | $112.9 | 7.4% | $208.9 | 15.3% |
| Non-GAAP adjustments: |  |  |  |  |  |  |  |  |
| Restructuring costs | 6.1 | 0.8% | 0.4 | 0.1% | 13.3 | 0.9% | 0.9 | 0.1% |
| Acquisition-related costs | 26.0 | 3.2% | 3.3 | 0.5% | 33.1 | 2.2% | 6.3 | 0.4% |
| Purchased intangible amortization | 25.1 | 3.1% | 11.2 | 1.6% | 41.3 | 2.7% | 21.9 | 1.6% |
| Other costs | 5.4 | 0.7% | 3.0 | 0.5% | 10.8 | 0.7% | 5.5 | 0.4% |
| Non-GAAP operating income | $110.7 | 13.8% | $104.1 | 15.3% | $211.4 | 13.9% | $243.5 | 17.8% |

Our non-GAAP operating margin decreased in the three and six months ended June 30, 2024 as compared to the same period in 2023 primarily due to acquisitions and unfavorable foreign exchange rate movements. We also increased sales and marketing activities and investments in our research and development capabilities, as compared to 2023.

We can experience quarter-to-quarter fluctuations in our operating results as a result of various factors, some of which are outside our control, such as:

- global general economic conditions including inflation and currency volatility, and geopolitical conditions, including conflicts in Russia and Ukraine, Israel, Palestine and surrounding areas, tensions between the United States and China, and tariff and trade policy changes;
- potential energy shortages in Europe where we have significant operations and overall higher energy and transportation costs;
- the time it takes between the date customer orders and deposits are received, systems are shipped and accepted by our customers and full payment is received;
- the worldwide shortage of semiconductor chips, components and raw materials, such as copper;
- the time it takes for us to receive critical materials to manufacture our products;
- costs related to and impacts from acquisitions of technology or business;
- the time it takes for customers to construct or prepare their facilities for our products;
- fluctuations in estimates impacting costs related to our self-funded health insurance plan; and
- costs related to addressing any potential cybersecurity threats.

Several of these factors have in the past affected and continue to affect the amount and timing of revenue recognized on sales of our products and receipt of related payments and will likely continue to do so in the future. Accordingly, our operating results in any particular quarter may not necessarily be an indication of any future quarter’s operating performance.

### Maintaining business continuity and service levels to our customers

Ensuring our ability to supply our enabling technologies and solutions and maintaining high service levels for our customers is a top priority for Bruker. We are continuing capital investments in production facilities for efficiencies and expansion. We continue to encounter supply chain risks associated with the global economy and increasing geopolitical tensions, including inflation, banking industry volatility, the threat of recession, financial liquidity, currency volatility or devaluation, and the worldwide shortage of semiconductor chips, components, and raw materials such as copper.

### CRITICAL ACCOUNTING POLICIES AND ESTIMATES

This discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to: revenue recognition; stock-based compensation expense; restructuring and other related charges; income taxes, including the recoverability of deferred tax assets; allowance for doubtful accounts; inventory reductions for excess and obsolete inventories; estimated fair values of long-lived assets used to measure the recoverability of long-lived assets; intangible assets and goodwill; expected future cash flows used to measure the recoverability of intangible assets and long-lived assets; warranty costs; derivative financial instruments; and contingent liabilities. We base our estimates and judgments on our historical experience, current market and economic conditions, industry trends, and other assumptions that we believe are reasonable and form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates and historical experience.

We believe the following critical accounting policies and estimates to be both those most important to the portrayal of our financial position and results of operations and those that require the most estimation and subjective judgment:

- Revenue recognition;
- Income taxes;
- Goodwill, other intangible assets and other long-lived assets; and
- Business combinations.

For a further discussion of our critical accounting policies, please refer to our Annual Report on Form 10-K for the year ended December 31, 2023, and Note 1, *Description of Business* in the Notes to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

### RESULTS OF OPERATIONS

#### Three Months Ended June 30, 2024, compared to the Three Months Ended June 30, 2023

### Consolidated Results

The following table presents our results (in millions):

|  | Three Months Ended June 30, 2024 | 2023 | Dollar Change | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Product revenue | $654.4 | $559.6 | $94.8 | 16.9% |
| Service and other revenue | 146.3 | 122.3 | 24.0 | 19.6% |
| Total revenue | 800.7 | 681.9 | 118.8 | 17.4% |
| Cost of product revenue | 326.0 | 272.8 | 53.2 | 19.5% |
| Cost of service and other revenue | 90.1 | 68.6 | 21.5 | 31.3% |
| Total cost of revenue | 416.1 | 341.4 | 74.7 | 21.9% |
| Gross profit | 384.6 | 340.5 | 44.1 | 13.0% |
| Operating expenses: |  |  |  |  |
| Selling, general and administrative | 221.3 | 177.9 | 43.4 | 24.4% |
| Research and development | 92.2 | 71.0 | 21.2 | 29.9% |
| Other charges, net | 23.0 | 5.4 | 17.6 | 325.9% |
| Total operating expenses | 336.5 | 254.3 | 82.2 | 32.3% |
| Operating income | 48.1 | 86.2 | (38.1) | (44.2)% |
| Interest and other income (expense), net | (24.2) | (8.7) | (15.5) | 178.2% |
| Income before income taxes, equity in income of unconsolidated investees, net of tax, and noncontrolling interests in consolidated subsidiaries | 23.9 | 77.5 | (53.6) | (69.2)% |
| Income tax provision | 16.1 | 19.9 | (3.8) | (19.1)% |
| Equity in income (losses) of unconsolidated investees, net of tax | (0.2) | 0.2 | (0.4) | (200.0)% |
| Net income | 7.6 | 57.8 | (50.2) | (86.9)% |
| Net income attributable to noncontrolling interests in consolidated subsidiaries | — | 0.7 | (0.7) | (100.0)% |
| Net income attributable to Bruker Corporation | $7.6 | $57.1 | $(49.5) | (86.7)% |

### Revenue

The following table presents revenue, change in revenue and revenue growth by reportable segment (in millions):

|  | Three Months Ended June 30, 2024 | 2023 | Dollar Change | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| BSI BioSpin | $217.5 | $162.0 | $55.5 | 34.3% |
| BSI CALID | 265.6 | 227.2 | 38.4 | 16.9% |
| BSI Nano | 252.5 | 225.1 | 27.4 | 12.2% |
| BEST | 69.1 | 72.7 | (3.6) | (5.0)% |
| Eliminations (a) | (4.0) | (5.1) | 1.1 |  |
| Total revenue | $800.7 | $681.9 | $118.8 | 17.4% |

(a) Represents product and service revenue between reportable segments.

Revenue increases were driven by growing demand for our differentiated instruments and solutions. For the three months ended June 30, 2024, the BSI BioSpin Segment recorded significant revenue growth across biopharma, academic & government, and industrial research segments. The increase in revenue in the BSI CALID Segment for the three months ended June 30, 2024, relates primarily to acquisitions and modest revenue growth across academic & government and biopharma segments. The BSI Nano Segment revenue increase for the three months ended June 30, 2024, was driven by an acquisition completed during the quarter.

Geographically in the three months ended June 30, 2024, our North American revenue grew 30.1% from biopharma and academic & government markets, Asia Pacific revenue increased by 1.5%, and European revenue increased by 23.8% compared to the same period in 2023, which was also driven by biopharma and academic & government markets.

### Gross Profit

Gross profit increased and gross profit margin decreased in the three months ended June 30, 2024, as compared to the same period in 2023, a result of increased revenue offset by restructuring and acquisitions costs, and an increase in purchased intangible amortization.

### Selling, General and Administrative

Our selling, general and administrative expenses for the three months ended June 30, 2024, increased to 27.6% of total revenue, from 26.1% of total revenue for the comparable period in 2023. The increase as a percentage of revenue was a result of planned investments in sales and marketing and operating expenses from newly acquired acquisitions compared to the same period in 2023.

### Research and Development

Our research and development expenses for the three months ended June 30, 2024 increased to 11.5% of total revenue from 10.4% of total revenue for the comparable period in 2023. The increase as a percentage of revenue is a result of our increased investment in research and development capabilities from newly acquired acquisitions.

### Other Charges, Net

Other charges, net for the three months ended June 30, 2024, consisted primarily of $17.5 million of acquisition-related charges which relate mainly to transaction costs on potential and consummated acquisitions, integration costs of newly acquired entities, and stock-based compensation expense related to the fair value changes of hybrid instruments. Also included in other charges, net are costs associated with our global information technology (“IT”) transformation activities which consist of a multi-year project aimed at updating and integrating our global enterprise resource planning and human resource information systems, professional fees from ongoing litigations related to the acquisitions of BCA and NanoString, and restructuring costs principally related to the BCA acquisition.

Other charges, net for the three months ended June 30, 2023, consisted of $2.9 million of acquisition-related charges related to acquisitions, $0.3 million of restructuring costs, $0.6 million of costs associated with our global IT transformations activities, and $1.6 million of other charges.

### Operating Income

The following table presents operating income and operating margins on revenue by reportable segment (in millions):

|  | Three Months Ended June 30, 2024 Operating (loss) Income | Percentage of Segment Revenue | 2023 Operating (loss) Income | Percentage of Segment Revenue |
| --- | ---: | ---: | ---: | ---: |
| BSI BioSpin | $37.3 | 17.1% | $23.8 | 14.7% |
| BSI CALID | 35.5 | 13.4% | 44.0 | 19.4% |
| BSI Nano | (3.6) | (1.4)% | 31.3 | 13.9% |
| BEST | 10.5 | 15.2% | 11.1 | 15.3% |
| Corporate, eliminations and other (a) | (31.6) |  | (24.0) |  |
| Total operating income | $48.1 | 6.0% | $86.2 | 12.6% |

(a) Represents corporate costs and eliminations not allocated to the reportable segments. Unallocated costs include general and administrative expenses not directly incurred by the segments such as professional fees incurred for the quarterly reviews and annual audit of the consolidated financial statements, personnel costs of corporate accounting, finance, legal and IT resources, and other expense items.

Our operating income and operating income margin decreased in the three months ended June 30, 2024, as compared to the same period in 2023, due to higher revenue offset by profitability decrease related to acquisitions and an increase in purchase intangible amortization across the BSI BioSpin, BSI CALID and BSI Nano segments.

### Interest and Other Income (Expense), Net

The increase in interest and other income (expense), net in the three months ended June 30, 2024, as compared to the same period in 2023 was primarily due to higher interest expense of $15.7 due to increased borrowings, and impairment of certain minority investments of $20.2, offset by $9.0 million currency gain related to currency fluctuations in the second quarter.

### Income Tax Provision

The 2024 and 2023 effective tax rates were estimated using projected annual pre-tax income on a jurisdictional basis. Expected tax benefits, including tax credits and incentives, the impact of changes to valuation allowances and the effect of jurisdictional differences in statutory tax rates were also considered in the calculation.

The effective tax rates for the three months ended June 30, 2024, and 2023 were 67.4% and 25.7%, respectively. The increase in the Company's effective tax rate was primarily due to change in jurisdictional mix and the impact of valuation allowance recorded on capital loss carryforwards related to the impairment charges on strategic investments.

### Equity in Income of Unconsolidated Investees, net of tax

Equity in Income of Unconsolidated Investees, net of tax represents the Company's proportional share of the earnings or losses as reported by equity-method investees.

### Net Income Attributable to Noncontrolling Interests

The net income attributable to noncontrolling interests represented the minority shareholders’ proportionate share of the net income recorded by our majority-owned subsidiaries.

### Consolidated Results

#### Six Months Ended June 30, 2024, compared to the Six Months Ended June 30, 2023

The following table presents our results (in millions):

|  | Six Months Ended June 30, 2024 | 2023 | Dollar Change | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| Product revenue | $1,241.3 | $1,126.7 | $114.6 | 10.2% |
| Service and other revenue | 281.1 | 240.5 | 40.6 | 16.9% |
| Total revenue | 1,522.4 | 1,367.2 | 155.2 | 11.4% |
| Cost of product revenue | 617.7 | 530.0 | 87.7 | 16.5% |
| Cost of service and other revenue | 167.3 | 137.0 | 30.3 | 22.1% |
| Total cost of revenue | 785.0 | 667.0 | 118.0 | 17.7% |
| Gross profit | 737.4 | 700.2 | 37.2 | 5.3% |
| Operating expenses: |  |  |  |  |
| Selling, general and administrative | 416.6 | 340.6 | 76.0 | 22.3% |
| Research and development | 174.0 | 140.0 | 34.0 | 24.3% |
| Other charges, net | 33.9 | 10.7 | 23.2 | 216.8% |
| Total operating expenses | 624.5 | 491.3 | 133.2 | 27.1% |
| Operating income | 112.9 | 208.9 | (96.0) | (46.0)% |
| Interest and other income (expense), net | (17.4) | (24.8) | 7.4 | (29.8)% |
| Income before income taxes, equity in income of unconsolidated investees, net of tax, and noncontrolling interests in consolidated subsidiaries | 95.5 | 184.1 | (88.6) | (48.1)% |
| Income tax provision | 35.9 | 49.8 | (13.9) | (27.9)% |
| Equity in income (losses) of unconsolidated investees, net of tax | — | 0.9 | (0.9) | (100.0)% |
| Net income | 59.6 | 135.2 | (75.6) | (55.9)% |
| Net income attributable to noncontrolling interests in consolidated subsidiaries | 1.1 | 1.6 | (0.5) | (31.3)% |
| Net income attributable to Bruker Corporation | $58.5 | $133.6 | $(75.1) | (56.2)% |

### Revenue

The following table presents revenue, change in revenue and revenue growth by reportable segment (in millions):

|  | Six Months Ended June 30, 2024 | 2023 | Dollar Change | Percentage Change |
| --- | ---: | ---: | ---: | ---: |
| BSI BioSpin | $400.3 | $342.3 | $58.0 | 16.9% |
| BSI CALID | 493.5 | 463.9 | 29.6 | 6.4% |
| BSI Nano | 492.9 | 434.7 | 58.2 | 13.4% |
| BEST | 142.2 | 134.9 | 7.3 | 5.4% |
| Eliminations (a) | (6.5) | (8.6) | 2.1 |  |
| Total revenue | $1,522.4 | $1,367.2 | $155.2 | 11.4% |

(a) Represents product and service revenue between reportable segments.

Revenue increases were driven by strong demand for our differentiated instruments and solutions as well as pricing improvements offset by the negative impact of foreign currency translation. The BSI BioSpin Segment revenue increase related primarily to acquisitions and strong demand for our instruments, especially in the MRS business. The BSI CALID Segment increase in revenues was driven primarily by acquisitions, especially ELITechGroup. BSI Nano Segment increase in revenue was driven by the NanoString acquisition and strong demand in its academic & government market. The BEST revenue increase was driven by strong superconductor demand from our magnetic resonance imaging original equipment manufacturer customers.

Geographically in the six months ended June 30, 2024, our North American revenue grew 22.0% related to Bruker’s biopharma and academic & government markets, Asia Pacific revenue decreased by 3.1%, and European revenue increased by 17.0% driven by biopharma and diagnostics markets compared to the same period in 2023.

### Gross Profit

Gross profit increased and gross profit margin decreased in the six months ended June 30, 2024, as compared to the same period in 2023, a result of increased revenue offset by restructuring and acquisitions costs, and an increase in purchased intangible amortization.

### Selling, General and Administrative

Our selling, general and administrative expenses for the six months ended June 30, 2024, increased to 27.4% of total revenue, from 24.9% of total revenue for the comparable period in 2023. The increase as a percentage of revenue was a result of increased costs from recent acquisitions compared to the same period in 2023.

### Research and Development

Our research and development expenses for the six months ended June 30, 2024, increased to 11.4% of total revenue from 10.2% of total revenue for the comparable period in 2023. The increase as a percentage of revenue is a result of our increased research and development related costs from our recent acquisitions.

### Other Charges, Net

Other charges, net for the six months ended June 30, 2024, consisted primarily of $21.6 million of acquisition-related charges which relate mainly to transaction costs on potential and consummated acquisitions, integration costs of newly acquired entities, and stock-based compensation expense related to the fair value changes of hybrid instruments. Also included in other charges, net are costs associated with our IT transformation activities which consist of a multi-year project aimed at updating and integrating our global enterprise resource planning and human resource information systems, professional fees from ongoing litigations related to acquisition of BCA and NanoString, and restructuring costs principally related to the BCA acquisition.

Other charges, net for the six months ended June 30, 2023, consisted of $5.8 million of acquisition-related charges related to acquisitions, $0.6 million of restructuring costs, $1.1 million of costs associated with our global IT transformations activities, $3.2 million of other charges.

### Operating Income

The following table presents operating income and operating margins on revenue by reportable segment (in millions):

|  | Six Months Ended June 30, 2024 Operating Income (Loss) | Percentage of Segment Revenue | 2023 Operating Income (Loss) | Percentage of Segment Revenue |
| --- | ---: | ---: | ---: | ---: |
| BSI BioSpin | $68.5 | 17.1% | $71.2 | 20.8% |
| BSI CALID | 76.6 | 15.5% | 101.6 | 21.9% |
| BSI Nano | 7.2 | 1.5% | 60.7 | 14.0% |
| BEST | 18.6 | 13.1% | 19.1 | 14.2% |
| Corporate, eliminations and other (a) | (58.0) |  | (43.7) |  |
| Total operating income | $112.9 | 7.4% | $208.9 | 15.3% |

(a) Represents corporate costs and eliminations not allocated to the reportable segments. Unallocated costs include general and administrative expenses not directly incurred by the segments such as professional fees incurred for the quarterly reviews and annual audit of the consolidated financial statements, personnel costs of corporate accounting, finance, legal and IT resources, and other expense items.

Our operating income and operating income margin decreased in the six months ended June 30, 2024, as compared to the same period in 2023, due to increased revenue but more than offset due to profitability from our recent acquisitions, acquisition related costs, and increased purchased intangible amortization across the BSI BioSpin, BSI CALID and BSI Nano segments as compared to the same period in the prior year.

### Interest and Other Income (Expense), Net

The increase in interest and other income (expense), net in the six months ended June 30, 2024, as compared to the same period in 2023 was due to higher interest expense of $20.7 due to increased borrowings, and impairment of certain minority investments of $20.2, offset by higher foreign currency exchange gains of $17.9 million driven primarily by a foreign exchange realized gain recognized on a forward contract taken to minimize risks from fluctuations in the Euro currency related to the closing of our acquisition of ELITechGroup during the quarter ended June 30, 2024, the purchase price of which was denominated in Euro. As of June 30, 2024, the Company recorded a realized foreign exchange gain of $10.4 million in interest and other income (expense), net, related to this forward contract.

### Income Tax Provision

The 2024 and 2023 effective tax rates were estimated using projected annual pre-tax income on a jurisdictional basis. Expected tax benefits, including tax credits and incentives, the impact of changes to valuation allowances and the effect of jurisdictional differences in statutory tax rates were also considered in the calculation.

The effective tax rates for the six months ended June 30, 2024, and 2023 were 37.6% and 27.1%, respectively. The increase in the Company's effective tax rate was primarily due to change in jurisdictional mix, and the impact of valuation allowance recorded on capital loss carryforwards related to the impairment charges on strategic investments.

### Equity in Income of Unconsolidated Investees, net of tax

Equity in Income of Unconsolidated Investees, net of tax represents the Company's proportional share of the earnings or losses as reported by equity-method investees.

### Net Income Attributable to Noncontrolling Interests

The net income attributable to noncontrolling interests represented the minority shareholders’ proportionate share of the net income recorded by our majority-owned subsidiaries.

### LIQUIDITY AND CAPITAL RESOURCES

We anticipate that our existing cash and credit facilities will be sufficient to support our operating and investing needs for at least the next twelve months. Our future cash requirements could be affected by acquisitions that we may complete, purchases of our common stock or the payment of dividends in the future. Historically, we have financed our growth and liquidity needs through cash flow generation from operations and a combination of debt financings and issuances of common stock. In the future, there are no assurances that we will continue to generate cash flow from operations or that additional financing alternatives will be available to us, if required, or, if available, will be obtained on terms favorable to us.

Effective in the quarter ended June 30, 2024, the Company entered into a multi-currency notional cash pooling agreement with a financial institution to manage cash flow more efficiently and optimize liquidity. See *Note 1, Description of Business* in the Notes to our Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for more information on our notional cash pooling agreement.

Cash and cash equivalents at June 30, 2024 and December 31, 2023 totaled $169.7 million and $488.3 million, respectively, of which $278.6 million and $398.4 million, respectively, related to cash, cash equivalents and short-term investments held outside of the United States in our foreign subsidiaries, most significantly in the Netherlands, Switzerland, India, and China. We aggregate all bank accounts that are subject to the notional pooling arrangement into a single balance on our consolidated balance sheets. As of June 30, 2024, the Company was not in a net overdraft position with respect to the notional cash pooling arrangement.

The following table presents our cash flows from operating activities, investing activities and financing activities for the periods presented (in millions):

|  | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $22.9 | $100.5 |
| Net cash used in investing activities | (1,629.1) | (134.2) |
| Net cash provided by (used in) financing activities | 1,307.5 | (41.0) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (19.7) | 4.2 |
| Net change in cash, cash equivalents and restricted cash | $(318.4) | $(70.5) |

Net cash provided by operating activities during the six months ended June 30, 2024, resulted primarily from consolidated net income adjusted for non-cash items of $144.7 million, partially offset by a change in operating assets and liabilities, net of acquisitions of $121.8 million. Net cash provided by operating activities during the six months ended June 30, 2023, resulted primarily from consolidated net income adjusted for non-cash items of $225.6 million, partially offset by a change in operating assets and liabilities, net of acquisitions and divestitures of $125.1 million. The decrease in net income adjusted for non-cash items was due to lower net income as result of increased costs from recent acquisitions, acquisition related costs, and increased purchase intangible amortization as compared to the same period in the prior year. The change in operating assets and liabilities, net of acquisitions decreased primarily due to increased inventory to handle supply chain challenges and increase in net payables, offset by a net decrease in customer advances and deferred revenue generally from a softness in biopharma demand and increase in tax payments.

Net cash used in investing activities during the six months ended June 30, 2024, resulted primarily from cash paid for acquisitions of $1,576.5 million, purchases of property, plant and equipment of $46.0 million, and minority investments of $10.0 million, offset by $2.5 million of proceeds from cross-currency swap agreements and $0.9 million of net proceeds from sales of property, plant and equipment. Net cash used in investing activities during the six months ended June 30, 2023 resulted primarily from acquisitions of $102.7 million, purchases of property, plant and equipment of $48.5 million, and minority investments of $9.3 million, offset by $11.8 million of proceeds from sale of minority investment and $10.7 million of net proceeds from sales of property, plant and equipment.

Net cash provided by financing activities during the six months ended June 30, 2024, was primarily from proceeds from our revolving line of credit of $1,073.3 million, proceeds from long-term debt of $805.7 million, proceeds from our public offering of common stock, $402.9 million, offset by the repayment of our revolving line of credit of $840.1 million, the repayment of our 2012 Note Purchase Agreement of $100.0 million and the payment of dividends to common shareholders of $15.0 million. Increased borrowings were used primarily to fund our major acquisitions during the period. Net cash used in financing activities during the six months ended June 30, 2023, was primarily from cash paid for purchases of common stock under our repurchase program of $22.4 million and $14.7 million for the payment of dividends.

### Share Repurchase Program

During the three and six months ended June 30, 2024, we did not purchase any shares under the 2023 Repurchase Program. Please read *Note 13, Shareholder's Equity,* in the Notes to our Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for more information on our share repurchase program.

### Public Offering

In May 2024, the Company completed an underwritten public offering (the “Offering”) in which the Company issued and sold 6,000,000 shares of its common stock at a public offering price of $67.29 per share. The Company received net proceeds of approximately $403.0 million after deducting underwriting fees and other offering expenses.

The Offering was made pursuant to an automatically effective registration statement on Form S-3 and accompanying prospectus filed with the SEC on May 29, 2024, and a final prospectus relating to the Offering filed with the SEC on May 31, 2024.

### Credit Facilities

We have a total outstanding debt of $2.1 billion as of June 30, 2024, and a revolving credit facility that provides for up to $900.0 million of backup liquidity to finance working capital needs, refinance or reduce existing indebtedness, and for general corporate use. In addition, the facility provides for an uncommitted incremental facility whereby, under certain circumstances, we may, at our option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $400 million.

For a summary of the fair and carrying values of our outstanding debt as of June 30, 2024, and December 31, 2023, please read *Note 8, Debt and Note 9, Fair Value of Financial Instruments* to our unaudited condensed consolidated financial statements included in this report. For additional information on our outstanding debt and credit facility please read, *Note 12, Debt*, to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.

As of June 30, 2024, we had no off-balance sheet arrangements.

As of June 30, 2024, we were in compliance with the financial covenants of these debt agreements.

### RECENT ACCOUNTING PRONOUNCEMENTS

Information regarding recent accounting standard changes and developments is incorporated by reference from Part I, Item 1, Unaudited Condensed Consolidated Financial Statements, of this document and should be considered an integral part of this Item 2. See Note 2 in the Notes to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for recently adopted and issued accounting standards.

## Market risk

As filed, 298 characters.

Information concerning market risk is contained in Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2023. As of June 30, 2024, there were no material changes in our exposure to market risk from December 31, 2023.

## Controls and procedures

As filed, 1,494 characters.

We have established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) that are designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer and principal accounting officer) by others within our organization. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2024. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2024.

Management concluded that the unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q fairly state, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity with GAAP.

### Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Filed Aug 9, 2024.
Source: SEC EDGAR, the filing index for accession 0000950170-24-094832. Last ingested by Listed: Nov 5, 2026, 16:58 ET. No prices; not investment advice.