Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 02, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | BRUKER CORP | |
Entity Central Index Key | 1,109,354 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 167,878,229 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 331 | $ 319.5 |
Short-term investments | 201.3 | 178 |
Accounts receivable, net | 242.3 | 293.2 |
Inventories | 478.3 | 477.4 |
Other current assets | 133.5 | 98.2 |
Total current assets | 1,386.4 | 1,366.3 |
Property, plant and equipment, net | 232.4 | 249.9 |
Intangibles, net and other long-term assets | 224.1 | 248.6 |
Total assets | 1,842.9 | 1,864.8 |
Current liabilities: | ||
Current portion of long-term debt | 130.3 | 0.8 |
Accounts payable | 87.4 | 76 |
Customer advances | 170.4 | 189.5 |
Other current liabilities | 288 | 316.4 |
Total current liabilities | 676.1 | 582.7 |
Long-term debt | 241.1 | 354.2 |
Other long-term liabilities | $ 157.7 | $ 156.2 |
Commitments and contingencies (Note 10) | ||
Shareholders' equity: | ||
Preferred stock, $0.01 par value 5,000,000 shares authorized, none issued or outstanding | ||
Common stock, $0.01 par value 260,000,000 shares authorized, 169,329,314 and 168,582,988 shares issued and 167,875,829 and 168,527,584 shares outstanding at September 30, 2015 and December 31, 2014, respectively | $ 1.7 | $ 1.7 |
Treasury stock, at cost, 1,453,485 and 55,404 shares at September 30, 2015 and December 31, 2014, respectively | (25.9) | (0.9) |
Accumulated other comprehensive income (loss) | (7.7) | 28.2 |
Other shareholders' equity | 792.2 | 736.9 |
Total shareholders' equity attributable to Bruker Corporation | 760.3 | 765.9 |
Noncontrolling interest in consolidated subsidiaries | 7.7 | 5.8 |
Total shareholders' equity | 768 | 771.7 |
Total liabilities and shareholders' equity | $ 1,842.9 | $ 1,864.8 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 260,000,000 | 260,000,000 |
Common stock, shares issued | 169,329,314 | 168,582,988 |
Common stock, shares outstanding | 167,875,829 | 168,527,584 |
Treasury stock, shares | 1,453,485 | 55,404 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) | ||||
Product revenue | $ 334.6 | $ 362.2 | $ 968.8 | $ 1,127.2 |
Service revenue | 58.8 | 56 | 171.1 | 170.7 |
Other revenue | 2.7 | 1.6 | 5.7 | 3 |
Total revenue | 396.1 | 419.8 | 1,145.6 | 1,300.9 |
Cost of product revenue | 193.1 | 214.6 | 545.8 | 638.9 |
Cost of service revenue | 34.8 | 37.9 | 101.7 | 114.5 |
Cost of other revenue | 0.7 | 1 | ||
Total cost of revenue | 228.6 | 252.5 | 648.5 | 753.4 |
Gross profit | 167.5 | 167.3 | 497.1 | 547.5 |
Operating expenses: | ||||
Selling, general and administrative | 96.1 | 108 | 289.2 | 332.5 |
Research and development | 34.3 | 42.1 | 109 | 132.6 |
Other charges, net | 8.9 | 12.3 | 23.9 | 21.5 |
Total operating expenses | 139.3 | 162.4 | 422.1 | 486.6 |
Operating income | 28.2 | 4.9 | 75 | 60.9 |
Interest and other income (expense), net | (4.6) | 4.1 | (14.3) | (3.1) |
Income before income taxes and noncontrolling interest in consolidated subsidiaries | 23.6 | 9 | 60.7 | 57.8 |
Income tax provision | 10.7 | 2.7 | 17.8 | 24.7 |
Consolidated net income | 12.9 | 6.3 | 42.9 | 33.1 |
Net income attributable to noncontrolling interest in consolidated subsidiaries | 1.1 | 0.8 | 2.7 | 2.5 |
Net income attributable to Bruker Corporation | $ 11.8 | $ 5.5 | $ 40.2 | $ 30.6 |
Net income per common share attributable to Bruker Corporation shareholders: | ||||
Basic and diluted (in dollars per share) | $ 0.07 | $ 0.03 | $ 0.24 | $ 0.18 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 167.8 | 168 | 168.2 | 167.5 |
Diluted (in shares) | 168.7 | 169.6 | 169.1 | 169.5 |
Comprehensive income (loss) | $ 5 | $ (76.7) | $ 6.7 | $ (50.3) |
Less: Comprehensive income attributable to noncontrolling interests | 1.2 | 0.8 | 2.4 | 2.5 |
Comprehensive income (loss) attributable to Bruker Corporation | $ 3.8 | $ (77.5) | $ 4.3 | $ (52.8) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Consolidated net income | $ 42.9 | $ 33.1 |
Adjustments to reconcile consolidated net income to cash flows from operating activities: | ||
Depreciation and amortization | 40 | 47.6 |
Write-down of demonstration inventories to net realizable value | 15 | 22.6 |
Stock-based compensation expense | 5.8 | 7.1 |
Deferred income taxes | (1.1) | |
Loss (gain) on disposal of product line | 0.2 | (9) |
Other non-cash expenses, net | 9.5 | 11.1 |
Changes in operating assets and liabilities, net of acquisitions and divestitures: | ||
Accounts receivable | 37.7 | 21.5 |
Inventories | (40.7) | (46.9) |
Accounts payable and accrued expenses | 4.8 | 24.7 |
Income taxes payable, net | (4.5) | (14.8) |
Deferred revenue | (1.2) | 2.2 |
Customer advances | (9.7) | (35.1) |
Other changes in operating assets and liabilities, net | (19.1) | (19.1) |
Net cash provided by operating activities | 79.6 | 45 |
Cash flows from investing activities: | ||
Purchases of short-term investments | (78) | (120.8) |
Maturities of short-term investments | 41.3 | |
Cash paid for acquisitions, net of cash acquired | (3.9) | |
Proceeds from disposal of product line | 12.8 | |
Purchases of property, plant and equipment | (22.8) | (26.7) |
Proceeds from sales of property, plant and equipment | 0.7 | 2.9 |
Net cash used in investing activities | (58.8) | (135.7) |
Cash flows from financing activities: | ||
Proceeds from revolving lines of credit | 17 | |
Repayment of other debt, net | (0.4) | (0.7) |
Proceeds from issuance of common stock, net | 7 | 7.3 |
Payment of contingent consideration | (3) | |
Repurchase of common stock | (24.9) | |
Changes in restricted cash | 1.4 | 0.7 |
Cash payments to noncontrolling interest | (0.5) | (1.1) |
Excess tax benefit related to stock option awards | 2.2 | |
Net cash (used in) provided by financing activities | (1.2) | 6.2 |
Effect of exchange rate changes on cash and cash equivalents | (8.1) | (25) |
Net change in cash and cash equivalents | 11.5 | (109.5) |
Cash and cash equivalents at beginning of period | 319.5 | 438.7 |
Cash and cash equivalents at end of period | $ 331 | $ 329.2 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2015 | |
Description of Business | |
Description of Business | 1. Description of Business Bruker Corporation, together with its consolidated subsidiaries (‘‘Bruker’’ or the ‘‘Company’’), is a designer, manufacturer and distributor of proprietary life science and materials research systems and associated products that address the rapidly evolving needs of a diverse array of customers in life science, pharmaceutical, biotechnology, clinical and molecular diagnostics research, and materials and chemical analysis in various industries and government applications. The Company has two reporting segments, Bruker Scientific Instruments (BSI) , which represents approximately 93% of the Company’s revenues during the nine months ended September 30, 2015, and Bruker Energy & Supercon Technologies (BEST) , which represents the remainder of the Company’s revenues. Within BSI, the Company is organized into three operating segments: the Bruker BioSpin Group, the Bruker CALID Group and the Bruker Nano Group. For financial reporting purposes, the Bruker BioSpin, Bruker CALID and Bruker Nano operating segments are aggregated into the BSI reporting segment because each has similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments. Bruker BioSpin - Bruker BioSpin designs, manufactures and distributes enabling life science tools based on magnetic resonance and preclinical imaging technologies. Bruker BioSpin’s Magnetic Resonance division sells various systems utilizing magnetic resonance technology, including magnetic resonance imaging (MRI) systems, nuclear magnetic resonance systems (NMR) and electron paramagnetic resonance systems (EPR), as well as OEM MRI magnets sold to medical device manufacturers. Bruker BioSpin’s Preclinical Imaging division sells single and multiple modality systems using MRI, position emission tomography (PET), single photon emission tomography (SPECT), computed tomography (CT), magnetic particle imaging (MPI) and optical imaging (fluorescence and bioluminescence) technologies to preclinical markets. Bruker CALID ( C hemicals, A pplied Markets, L ife Science, I n-Vitro Diagnostics, D etection) - Bruker CALID designs, manufactures and distributes life science mass spectrometry instruments that can be integrated and used along with other sample preparation or chromatography instruments, as well as Chemical, Biological, Radiological, Nuclear and Explosive (CBRNE) detection products. Bruker CALID also designs, manufactures and distributes instruments based on Raman molecular spectroscopy technologies. Bruker CALID’s mass spectrometry units are typically used in applications of expression proteomics, clinical proteomics, metabolic and peptide biomarker profiling, drug discovery and development, molecular diagnostics research, molecular and systems biology, basic molecular medicine research and clinical microbiology. Bruker Nano - Bruker Nano designs, manufactures and distributes spectroscopy and microscopy instruments for the understanding of composition and structure in material science and life science samples. The instruments are based on advanced technologies in X-ray fluorescence spectroscopy (XRF), X-ray diffraction (XRD), X-ray micro computed tomography (μCT), atomic force microscopy (AFM), stylus and optical metrology (SOM) and fluorescence microscopy (FM), and also include analytical tools for electron microscopes, handheld, portable and mobile X-ray fluorescence and spark optical emission spectroscopy systems. The Company’s BEST reporting segment develops and manufactures superconducting and non-superconducting materials and devices for use in renewable energy, energy infrastructure, healthcare and ‘‘big science’’ research. The segment focuses on metallic low temperature superconductors for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy research and other applications, as well as ceramic high temperature superconductors primarily for energy grid and magnet applications. The unaudited condensed consolidated financial statements represent the consolidated accounts of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements as of September 30, 2015 and December 31, 2014, and for the three and nine months ended September 30, 2015 and 2014, have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial information presented herein does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. The results for interim periods are not necessarily indicative of the results expected for any other interim period or the full year. Certain prior year amounts have been reclassified to conform to the current year presentation and had no effect on previously reported net income or cash flows. At September 30, 2015, the Company’s significant accounting policies and estimates, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, have not changed. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | 2. Stock-Based Compensation The Company’s awards of stock-based compensation are in the form of stock options and restricted stock. The Company recorded stock-based compensation expense as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options $ $ $ $ Restricted stock Total stock-based compensation $ $ $ $ Stock-based compensation expense is amortized on a straight-line basis over the underlying vesting terms of the stock-based award. Stock options to purchase the Company’s common stock are periodically awarded to executive officers and other employees of the Company subject to a vesting period of three to five years. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions regarding volatility, expected life, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below: 2015 2014 Risk-free interest rates 1.58% - 1.89% 1.81% - 2.10% Expected life 6.0-6.25 years 6.0 - 6.25 years Volatility 36.09% - 52.23% 53.24% - 56.24% Expected dividend yield Bruker Corporation Stock Plan In May 2010, the Bruker Corporation 2010 Incentive Compensation Plan (the 2010 Plan) was approved by the Company’s stockholders. The 2010 Plan provides for the issuance of up to 8,000,000 shares of the Company’s common stock. The 2010 Plan allows a committee of the Board of Directors (the Committee) to grant incentive stock options, non-qualified stock options and restricted stock awards. The Committee has the authority to determine which employees will receive the awards, the amount of the awards and other terms and conditions of any awards. Awards granted by the Committee typically vest over a period of three to five years. Stock option activity for the nine months ended September 30, 2015 was as follows: Shares Subject to Options Weighted Average Option Price Weighted Average Remaining Contractual Term (Yrs) Aggregate Intrinsic Value (in millions) (b) Outstanding at December 31, 2014 $ Granted Exercised ) Forfeited ) Outstanding at September 30, 2015 $ $ Exercisable at September 30, 2015 $ $ Exercisable and expected to vest at September 30, 2015 (a) $ $ (a) In addition to the options that are vested at September 30, 2015, the Company expects a portion of the unvested options to vest in the future. Options expected to vest in the future are determined by applying an estimated forfeiture rate to the options that are unvested as of September 30, 2015. (b) The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of $16.43 on September 30, 2015, or the date of exercises, as appropriate, and the exercise price of the underlying stock options. The weighted average fair value of options granted was $7.82 and $10.82 per share for the nine months ended September 30, 2015 and 2014, respectively. The total intrinsic value of options exercised was $5.1 million and $9.7 million for the nine months ended September 30, 2015 and 2014, respectively. Restricted stock activity for the nine months ended September 30, 2015 was as follows: Shares Subject to Restriction Weighted Average Grant Date Fair Value Outstanding at December 31, 2014 $ Granted Vested ) Forfeited ) Outstanding at September 30, 2015 $ The total fair value of restricted stock vested was $1.0 million and $3.0 million for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015, the Company expects to recognize pre-tax stock-based compensation expense of $18.7 million associated with outstanding stock option awards granted under the Company’s stock plans over the weighted average remaining service period of 2.2 years. In addition, the Company expects to recognize additional pre-tax stock-based compensation expense of $4.1 million associated with outstanding restricted stock awards granted under the Company’s stock plans over the weighted average remaining service period of 3.0 years. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share | |
Earnings Per Share | 3. Earnings Per Share Net income per common share attributable to Bruker Corporation shareholders is calculated by dividing net income attributable to Bruker Corporation by the weighted average shares outstanding during the period. The diluted net income per share computation includes the effect of shares which would be issuable upon the exercise of outstanding stock options and the vesting of restricted stock, reduced by the number of shares which are assumed to be purchased by the Company under the treasury stock method. The following table sets forth the computation of basic and diluted weighted average shares outstanding (in millions, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income attributable to Bruker Corporation, as reported $ $ $ $ Weighted average shares outstanding: Weighted average shares outstanding-basic Effect of dilutive securities: Stock options and restricted stock Net income per common share attributable to Bruker Corporation shareholders: Basic and diluted $ $ $ $ Stock options to purchase approximately 2.3 million shares for the three and nine months ended September 30, 2015, and 0.2 million shares for the three and nine months ended September 30, 2014, were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive. During the second quarter of 2015, the Company’s Board of Directors approved a share repurchase program under which the Company may repurchase the Company’s common stock in amounts intended to approximately offset, on an annual basis, the dilutive effect of shares that are, or may be, issued pursuant to option or restricted stock awards under the 2010 Plan. It is currently expected that the Company’s annual repurchase activity will target an amount not to exceed 1% of the total number of shares outstanding. During the three and nine months ended September 30, 2015, 395,000 and 1,245,000 shares, respectively, have been repurchased at an aggregate cost of $7.7 million and $24.9 million, respectively. The repurchased shares are reflected within Treasury stock in the accompanying condensed consolidated balance sheet at September 30, 2015. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments The Company applies the following hierarchy to determine the fair value of financial instruments, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The levels in the hierarchy are defined as follows: Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The valuation techniques that may be used by the Company to determine the fair value of Level 2 and Level 3 financial instruments are the market approach, the income approach and the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value based on current market expectations about those future amounts, including present value techniques, option-pricing models and the excess earnings method. The cost approach is based on the amount that would be required to replace the service capacity of an asset (replacement cost). The following tables set forth the Company’s financial instruments that are measured at fair value on a recurring basis and presents them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement at September 30, 2015 and December 31, 2014 (in millions): September 30, 2015 Total Quoted Prices in Active Markets Available (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments $ $ $ — $ — Restricted cash — — Foreign exchange contracts — — Embedded derivatives in purchase and delivery contracts — — Long-term restricted cash — — Total assets recorded at fair value $ $ $ $ — Liabilities: Contingent consideration $ $ — $ — $ Foreign exchange contracts — — Embedded derivatives in purchase and delivery contracts — — Fixed price commodity contracts — — Total liabilities recorded at fair value $ $ — $ $ December 31, 2014 Total Quoted Prices in Active Markets Available (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents $ $ $ — $ — Short-term investments — — Restricted cash — — Embedded derivatives in purchase and delivery contracts — — Long-term restricted cash — Total assets recorded at fair value $ $ $ $ — Liabilities: Contingent consideration $ $ — $ — $ Foreign exchange contracts — — Embedded derivatives in purchase and delivery contracts — — Fixed price commodity contracts — — Total liabilities recorded at fair value $ $ — $ $ The Company’s financial instruments consist primarily of cash equivalents, short-term investments, restricted cash, derivative instruments consisting of foreign exchange contracts, commodity contracts, derivatives embedded in certain purchase and sale contracts, accounts receivable, short-term borrowings, accounts payable, contingent consideration and long-term debt. The carrying amounts of the Company’s cash equivalents, short-term investments, restricted cash, accounts receivable, short-term borrowings and accounts payable approximate fair value due to their short-term nature. Derivative assets and liabilities are measured at fair value on a recurring basis. The Company’s long-term debt consists principally of a private placement arrangement entered into in 2012 with various fixed interest rates based on the maturity date. The fair value of the long-term fixed interest rate debt, which has been classified as Level 2, was $254.0 million and $257.2 million at September 30, 2015 and December 31, 2014, respectively, based on market and observable sources with similar maturity dates. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to remeasure any of its existing financial assets or liabilities and did not elect the fair value option for any financial assets or liabilities which originated during the three or nine months ended September 30, 2015 or 2014. As part of certain acquisitions in prior years, the Company recorded contingent consideration liabilities that have been classified as Level 3 in the fair value hierarchy. The contingent consideration represents the estimated fair value of future payments to the former shareholders of applicable acquired companies based on achieving annual revenue targets and specific milestones in certain years as specified in the purchase and sale agreements. The Company initially valued the contingent consideration using the discounted cash flow method. Total contingent consideration liabilities were $5.2 million as of September 30, 2015 and $11.9 million as of December 31, 2014. There were no changes to the fair value of the contingent considerations recognized in earnings for the three months ended September 30, 2015 or 2014. Changes to the fair value of the contingent consideration recognized in earnings for the nine months ended September 30, 2015 was ($3.0) million, and was recorded within Other Charges, net in the condensed consolidated statements of income and comprehensive income (loss). The adjustments include a reversal of certain contingent consideration, as it was determined that revenues in 2015 related to the applicable products would not meet the required thresholds for payment. The nine months ended September 30, 2014 included a change to the fair value of the contingent consideration of $0.1 million which was recorded to Other Charges, net in the condensed consolidated statements of income and comprehensive income (loss). The following table sets forth the changes in contingent consideration liabilities for the nine months ended September 30, 2015 (in millions): Balance at December 31, 2014 $ Current period adjustments ) Current period settlements ) Foreign currency effect ) Balance at September 30, 2015 $ During the second quarter of 2014, the Company commenced a program to enter into time deposits with varying maturity dates ranging from one to twelve months, as well as call deposits for which the Company has the ability to redeem the invested amounts over a period of 31 to 95 days. The Company has classified these investments within cash and cash equivalents or short-term investments within the condensed consolidated balance sheet based on the call and maturity dates. As of September 30, 2015 there are no cash equivalents outstanding and $201.3 million of short-term investments. Short-term investments are classified as available-for-sale and are reported at fair value, with unrealized gains (losses) excluded from earnings and reported, net of tax, in accumulated other comprehensive income (loss) within the accompanying condensed consolidated balance sheet. There were no unrealized gains (losses) recorded during the three or nine months ended September 30, 2015 and 2014. On a quarterly basis, the Company reviews its short-term investments to determine if there have been any events that could create an impairment. None were noted for the three or nine months ended September 30, 2015 and 2014. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Inventories | 5. Inventories Inventories consisted of the following (in millions): September 30, December 31, 2015 2014 Raw materials $ $ Work-in-process Finished goods Demonstration units Inventories $ $ Finished goods include in-transit systems that have been shipped to the Company’s customers, but not yet installed and accepted by the customer. As of September 30, 2015 and December 31, 2014, inventory-in-transit was $55.8 million and $58.6 million, respectively. The Company reduces the carrying value of its demonstration inventories for differences between its cost and estimated net realizable value through a charge to cost of product revenue that is based on a number of factors, including the age of the unit, the physical condition of the unit and an assessment of technological obsolescence. Amounts recorded in Cost of Revenue related to the write-down of demonstration units to net realizable value were $5.1 million and $7.4 million for the three months ended September 30, 2015 and 2014, respectively, and $15.0 million and $22.6 million for the nine months ended September 30, 2015 and 2014, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 6. Goodwill and Other Intangible Assets The following table sets forth the changes in the carrying amount of goodwill for the nine months ended September 30, 2015 (in millions): Balance at December 31, 2014 $ Current period adjustments Impairment ) Foreign currency effect ) Balance at September 30, 2015 $ In the third quarter of 2015, the Company commenced a restructuring initiative for the Molecular Imaging business of the BioSpin Preclinical Imaging division within the BSI segment. The initiative was developed as a result of management’s conclusion that the business would be unable to achieve acceptable financial performance as a result of a reduction in new order bookings. The Company determined that this initiative was an indicator requiring the evaluation of the goodwill and definite-lived intangible assets within that reporting unit for recoverability. The Company recorded an impairment charge of $0.7 million related to goodwill and $1.8 million related to definite-lived intangible assets in the three and nine months ended September 30, 2015. This impairment charge is included as a component of Other Charges, net in the condensed consolidated statement of income and comprehensive income (loss). The following is a summary of intangible assets (in millions): September 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Existing technology and related patents $ $ ) $ $ $ ) $ Customer relationships ) ) Non compete contracts ) ) Trade names ) — ) — Intangible assets subject to amortization ) ) In-process research and development — — Intangible assets $ $ ) $ $ $ ) $ For each of the three months ended September 30, 2015 and 2014, the Company recorded amortization expense of $5.1 million, related to intangible assets subject to amortization. For the nine months ended September 30, 2015 and 2014, the Company recorded amortization expense of $15.5 million and $15.1 million, respectively, related to intangible assets subject to amortization. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt | |
Debt | 7. Debt The Company’s debt obligations as of September 30, 2015 and December 31, 2014 consisted of the following (in millions): September 30, December 31, 2015 2014 US Dollar revolving loan under the Amended Credit Agreement $ $ US Dollar notes under the Note Purchase Agreement Capital lease obligations and other loans Total debt Current portion of long-term debt ) ) Total long-term debt, less current portion $ $ In May 2011, the Company entered into an amendment to, and restatement of, its credit agreement, referred to as the Amended Credit Agreement. The Amended Credit Agreement provided a maximum commitment on the Company’s revolving credit line of $250.0 million and a maturity date of May 2016. The Amended Credit Agreement was repaid in full in October 2015. Borrowings under the revolving credit line of the Amended Credit Agreement accrued interest, at the Company’s option, at either (a) the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) adjusted LIBOR plus 1.00% or (b) LIBOR, plus margins ranging from 0.80% to 1.65%. There was also a facility fee ranging from 0.20% to 0.35%. Borrowings under the Amended Credit Agreement were secured by guarantees from certain material subsidiaries, as defined in the Amended Credit Agreement, and Bruker Energy & Supercon Technologies, Inc. The Amended Credit Agreement also required the Company to maintain certain financial ratios related to maximum leverage and minimum interest coverage. Specifically, the Company’s leverage ratio could not exceed 3.0 and the Company’s interest coverage ratio could not be less than 3.0. As of September 30, 2015, the Company was in compliance with the covenants of the Amended Credit Agreement. In addition to the financial ratios, the Amended Credit Agreement restricted, among other things, the Company’s ability to do the following: make certain payments; incur additional debt; incur certain liens; make certain investments, including derivative agreements; merge, consolidate, sell or transfer all or substantially all of its assets; and enter into certain transactions with affiliates. Failure to comply with any of these restrictions or covenants could have resulted in an event of default on the Amended Credit Agreement, which could have permitted acceleration of the debt and required the Company to prepay the debt before its scheduled due date. Other revolving lines of credit are with various financial institutions located primarily in Germany and Switzerland. These revolving lines of credit are typically uncommitted, used for performance bonds or guarantees and due upon demand, with interest payable monthly or quarterly. The following is a summary of the maximum commitments and the net amounts available to the Company under revolving loan and line of credit arrangements at September 30, 2015 (in millions): Weighted Average Interest Rate Total Amount Committed by Lenders Outstanding Borrowings Outstanding Lines of Credit Total Amount Available Amended Credit Agreement % $ $ $ $ Other revolving lines of credit — — Total revolving lines of credit $ $ $ $ On October 27, 2015, the Company entered into a new revolving credit agreement, referred to as the 2015 Credit Agreement, and terminated the Amended Credit Agreement. The 2015 Credit Agreement provides a maximum commitment on the Company’s revolving credit line of $500.0 million and a maturity date of October 2020. Borrowings under the revolving credit line of the 2015 Credit Agreement accrue interest, at the Company’s option, at either (a) the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) adjusted LIBOR plus 1.00%, plus margins ranging from 0.00% to 0.30% or (b) LIBOR, plus margins ranging from 0.90% to 1.30%. There is also a facility fee ranging from 0.10% to 0.20%. Borrowings under the 2015 Credit Agreement are secured by guarantees from certain material subsidiaries, as defined in the 2015 Credit Agreement. The 2015 Credit Agreement also requires the Company to maintain certain financial ratios related to maximum leverage and minimum interest coverage. Specifically, the Company’s leverage ratio cannot exceed 3.5 and the Company’s interest coverage ratio cannot be less than 2.5. In addition to the financial ratios, the 2015 Credit Agreement contains negative covenants, including among others, restrictions on liens, indebtedness of the Company and its subsidiaries, asset sales, dividends and transactions with affiliates. Failure to comply with any of these restrictions or covenants may result in an event of default on the 2015 Credit Agreement, which could permit acceleration of the debt and require the Company to prepay the debt before its scheduled due date. In January 2012, the Company entered into a note purchase agreement, referred to as the Note Purchase Agreement, with a group of accredited institutional investors. Pursuant to the Note Purchase Agreement, the Company issued and sold $240.0 million of senior notes, referred to as the Senior Notes, which consist of the following: · $20.0 million 3.16% Series 2012A Senior Notes, Tranche A, due January 18, 2017; · $15.0 million 3.74% Series 2012A Senior Notes, Tranche B, due January 18, 2019; · $105.0 million 4.31% Series 2012A Senior Notes, Tranche C, due January 18, 2022; and · $100.0 million 4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024. Under the terms of the Note Purchase Agreement, the Company may issue and sell additional senior notes up to an aggregate principal amount of $600 million, subject to certain conditions. Interest on the Senior Notes is payable semi-annually on January 18 and July 18 of each year. The Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s direct and indirect subsidiaries. The Senior Notes rank pari passu in right of repayment with the Company’s other senior unsecured indebtedness. The Company may prepay some or all of the Senior Notes at any time in an amount not less than 10% of the original aggregate principal amount of the Senior Notes to be prepaid, at a price equal to the sum of (a) 100% of the principal amount thereof, plus accrued and unpaid interest, and (b) the applicable make-whole amount, upon not less than 30 and no more than 60 days written notice to the holders of the Senior Notes. In the event of a change in control of the Company, as defined in the Note Purchase Agreement, the Company may be required to prepay the Senior Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest. The Note Purchase Agreement contains affirmative covenants, including, without limitation, maintenance of corporate existence, compliance with laws, maintenance of insurance and properties, payment of taxes, addition of subsidiary guarantors and furnishing notices and other information. The Note Purchase Agreement also contains certain restrictive covenants that restrict the Company’s ability to, among other things, incur liens, transfer or sell assets, engage in certain mergers and consolidations and enter into transactions with affiliates. The Note Purchase Agreement also includes customary representations and warranties and events of default. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding Senior Notes will become due and payable immediately without further action or notice. In the case of payment events of defaults, any holder of Senior Notes affected thereby may declare all Senior Notes held by it due and payable immediately. In the case of any other event of default, a majority of the holders of the Senior Notes may declare all the Senior Notes to be due and payable immediately. Pursuant to the Note Purchase Agreement, so long as any Senior Notes are outstanding the Company will not permit (i) its leverage ratio, as determined pursuant to the Note Purchase Agreement, as of the end of any fiscal quarter to exceed 3.50 to 1.00, (ii) its interest coverage ratio as determined pursuant to the Note Purchase Agreement as of the end of any fiscal quarter for any period of four consecutive fiscal quarters to be less than 2.50 to 1 or (iii) priority debt at any time to exceed 25% of consolidated net worth, as determined pursuant to the Note Purchase Agreement. As of September 30, 2015, the Company was in compliance with the covenants of the Note Purchase Agreement. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | 8. Derivative Instruments and Hedging Activities Interest Rate Risks The Company’s exposure to interest rate risk relates primarily to outstanding variable rate debt and adverse movements in the related short-term market rates. The most significant component of the Company’s interest rate risk relates to amounts outstanding under the Amended Credit Agreement, which totaled $129.5 million at September 30, 2015. The Company currently has a higher level of fixed rate debt than variable rate debt, which limits the exposure to adverse movements in interest rates. Foreign Exchange Rate Risk Management The Company generates a substantial portion of its revenues and expenses in international markets, principally Germany and other countries in the European Union, Switzerland and Japan, which subjects its operations to the exposure of exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. The Company periodically enters into foreign exchange contracts in order to minimize the volatility that fluctuations in foreign currency have on its monetary transactions. Under these arrangements, the Company typically agrees to purchase a fixed amount of a foreign currency in exchange for a fixed amount of U.S. Dollars or other currencies on specified dates with maturities of less than twelve months. These transactions do not qualify for hedge accounting and, accordingly, the instrument is recorded at fair value with the corresponding gains and losses recorded in the condensed consolidated statements of income and comprehensive income (loss). The Company had the following notional amounts outstanding under foreign exchange contracts at September 30, 2015 and December 31, 2014 (in millions): Buy Notional Amount in Buy Currency Sell Maturity Notional Amount in U.S. Dollars Fair Value of Assets Fair Value of Liabilities September 30, 2015: Euro U.S. Dollars October 2015 $ $ $ — U.S. Dollars Euro December 2015 — — Swiss Francs U.S. Dollars October 2015 — $ $ $ December 31, 2014: Euro U.S. Dollars January 2015 to September 2015 $ $ — $ U.S. Dollars Euro February 2015 to December 2015 — — Euro British Pounds January 2015 to June 2015 — — Yen Euro March 2015 — — Swiss Francs U.S. Dollars January 2015 — $ $ — $ In addition, the Company periodically enters into purchase and sales contracts denominated in currencies other than the functional currency of the parties to the transaction. The Company accounts for these transactions by separately valuing the “embedded derivative” component of these contracts. Contracts denominated in currencies other than the functional currency of the transacting parties amounted to $36.4 million for the delivery of products and $3.1 million for the purchase of products at September 30, 2015 and $41.1 million for the delivery of products and $8.7 million for the purchase of products at December 31, 2014. The changes in the fair value of these embedded derivatives are recorded as foreign currency exchange gains/losses within Interest and Other Income (Expense), net in the condensed consolidated statements of income and comprehensive income (loss). Commodity Price Risk Management The Company has an arrangement with a customer under which it has a firm commitment to deliver copper based superconductors at a fixed price. In order to minimize the volatility that fluctuations in the price of copper have on the Company’s sales of these superconductors, the Company enters into commodity hedge contracts. At September 30, 2015 and December 31, 2014, the Company had fixed price commodity contracts with notional amounts aggregating $2.5 million and $2.7 million, respectively. The changes in the fair value of these commodity contracts are recorded within Interest and Other Income (Expense), net in the condensed consolidated statements of income and comprehensive income (loss). The fair value of the derivative instruments described above is recorded in the consolidated balance sheets for the periods as follows (in millions): September 30, December 31, Balance Sheet Location 2015 2014 Derivative assets: Foreign exchange contracts Other current assets $ $ — Embedded derivatives in purchase and delivery contracts Other current assets Derivative liabilities: Foreign exchange contracts Other current liabilities $ $ Embedded derivatives in purchase and delivery contracts Other current liabilities Fixed price commodity contracts Other current liabilities The impact on net income of unrealized gains and losses resulting from changes in the fair value of derivative instruments not designated as hedging instruments are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Foreign exchange contracts $ ) $ ) $ $ ) Embedded derivatives in purchase and delivery contracts ) ) Fixed price commodity contracts ) ) ) ) Income (expense), net $ ) $ ) $ $ ) The amounts related to derivative instruments not designated as hedging instruments are recorded within Interest and Other Income (Expense), net in the condensed consolidated statements of income and comprehensive income (loss). |
Provision for Income Taxes
Provision for Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Provision for Income Taxes | |
Provision for Income Taxes | 9. Provision for Income Taxes The Company accounts for income taxes using the asset and liability approach by recognizing deferred tax assets and liabilities for the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which the differences are expected to be reflected in the tax return. The Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. In addition, the Company accounts for uncertain tax positions that have reached a minimum recognition threshold. The income tax provision for the three months ended September 30, 2015 and 2014 was $10.7 million and $2.7 million, respectively, representing effective tax rates of 45.3% and 30.0%, respectively. The increase in our effective tax rate for the three months ended September 30, 2015, when compared to the same period in 2014, was primarily caused by changes in the expected mix of earnings among tax jurisdictions, including an expected decrease in U.S. income as a result of the continued weakness in the industrial markets, which is taxed at a lower effective tax rate because of a valuation allowance. This was partly offset by the release of a valuation allowance on net operating loss carryforwards. The income tax provision for the nine months ended September 30, 2015 and 2014 was $17.8 million and $24.7 million, respectively, representing effective tax rates of 29.3% and 42.7%, respectively. The decrease in our effective tax rate for the nine months ended September 30, 2015, when compared to the same period in 2014, was caused primarily by the release of a valuation allowance on net operating loss carryforwards, offset by changes in the expected mix of earnings among tax jurisdictions, including a decrease in expected U.S. earnings noted above. Utilization of the loss carryforwards resulted from the move of certain production from the United States to Switzerland and Germany. The Company’s effective tax rate may change over time as the amount or mix of income and taxes changes among the jurisdictions in which the Company is subject to tax. As of September 30, 2015 and December 31, 2014, the Company has unrecognized tax benefits, excluding penalties and interest, of approximately $28.6 million and $27.0 million, respectively, of which $14.8 million and $12.8 million, if recognized, would result in a reduction of the Company’s effective tax rate. The Company recognizes penalties and interest related to unrecognized tax benefits in the provision for income taxes. As of September 30, 2015 and December 31, 2014, approximately $4.9 million and $3.6 million, respectively, of accrued interest and penalties related to uncertain tax positions was included in other long-term liabilities on the unaudited condensed consolidated balance sheets. No penalties and interest related to unrecognized tax benefits were recorded in the provision for income taxes during the three months ended September 30, 2015. Penalties and interest related to unrecognized tax benefits of $1.1 million were recorded in the provision for income taxes during the nine months ended September 30, 2015. Penalties and interest related to unrecognized tax benefits of $0.2 million were recorded in the provision for income taxes during the three and nine months ended September 30, 2014. The Company files tax returns in the United States, which include federal, state and local jurisdictions, and many foreign jurisdictions with varying statutes of limitations. The Company considers Germany, the United States and Switzerland to be its significant tax jurisdictions. The tax years 2009 to 2014 are open tax years in Germany and Switzerland. During the nine months ended September 30, 2014, the Company settled a tax audit in the United States for the tax year 2010. The amount of the settlement was immaterial to the condensed consolidated financial statements. Tax years 2011 to 2014 remain open for examination in the United States. Subsequent to September 30, 2015, we approved and implemented a repatriation of $235.3 million of foreign earnings to the United States due to adverse interest rate conditions in Europe that were unfavorably impacting cash balances. The Company used $129.5 million of the repatriated funds to repay the outstanding balance on the revolving credit line under the Amended Credit Agreement. No incremental U.S. income tax is expected to be incurred as the majority of the repatriation was comprised of previously taxed income and the Company has sufficient net operating losses and foreign tax credits to offset any remaining tax liability. The Company regularly evaluates the need for a valuation allowance on its deferred tax assets in accordance with the Accounting Standards Codification (ASC) Topic 740-10-30-17. Given the repatriation’s impact on U.S. pretax book income for 2015, the Company will consider this new evidence, together with all available evidence, in evaluating its existing valuation allowances on its U.S. deferred tax assets in the fourth quarter of 2015. The Company has previously asserted that its foreign earnings are indefinitely reinvested and this repatriation does not change this ongoing assertion due to the Company’s ability in this instance to remit these earnings on a tax free basis in a manner that is solely within its control and presently available to the Company. The Company regularly evaluates its assertion that its foreign earnings are indefinitely reinvested. If the cash, cash equivalents and short-term investments held by the Company’s foreign subsidiaries are needed to fund operations in the U.S., or the Company otherwise elects to repatriate the unremitted earnings of its foreign subsidiaries in the form of dividends or otherwise, or if the shares of the subsidiaries were sold or transferred, the Company would likely be subject to additional U.S. income taxes, net of the impact of any available tax credits, which could result in a higher effective tax rate in the future. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies Legal Lawsuits, claims and proceedings of a nature considered normal to its businesses may be pending from time to time against the Company. The Company believes the outcome of these proceedings, individually and in the aggregate, will not have a material impact on the Company’s financial position or results of operations. As of September 30, 2015 and December 31, 2014, accruals recorded for such potential contingencies were immaterial to the condensed consolidated financial statements. Letters of Credit and Guarantees At September 30, 2015 and December 31, 2014, the Company had bank guarantees of $134.9 million and $150.3 million, respectively, for customer advances. These arrangements guarantee the refund of advance payments received from customers in the event that the merchandise is not delivered or warranty obligations are not fulfilled in compliance with the terms of the contract. These guarantees affect the availability of the Company’s lines of credit. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | 11. Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. GAAP are included in other comprehensive income (loss), but excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity, net of tax. The Company’s other comprehensive income (loss) is composed primarily of foreign currency translation adjustments and changes in the funded status of defined benefit pension plans. The following is a summary of comprehensive income (loss) (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Consolidated net income $ $ $ $ Foreign currency translation adjustments ) ) ) ) Pension liability adjustments Other — — — Net comprehensive income (loss) ) ) Less: Comprehensive income attributable to noncontrolling interests Comprehensive income (loss) attributable to Bruker Corporation $ $ ) $ $ ) The following is a summary of the components of accumulated other comprehensive income (loss), net of tax, at September 30, 2015 (in millions): Foreign Currency Translation Pension Liability Adjustment Accumulated Other Comprehensive Income Balance at December 31, 2014 $ $ ) $ Other comprehensive loss before reclassifications ) ) ) Realized loss on reclassification, net of tax of $2.4 million — Net current period other comprehensive income (loss) ) ) Balance at September 30, 2015 $ $ ) $ ) |
Noncontrolling Interests
Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2015 | |
Noncontrolling Interests | |
Noncontrolling Interests | 12. Noncontrolling Interests Noncontrolling interests represent the minority shareholders’ proportionate share of the Company’s majority owned subsidiaries. The following table sets forth the changes in noncontrolling interests (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Balance at beginning of period $ $ $ $ Net income Foreign currency translation adjustments — — ) ) Other — ) ) Balance at end of period $ $ $ $ |
Other Charges, Net
Other Charges, Net | 9 Months Ended |
Sep. 30, 2015 | |
Other Charges, Net | |
Other Charges, Net | 13. Other Charges, Net The components of Other Charges, net were as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Information technology transformation costs $ $ $ $ Restructuring charges Pension settlement charge — — — Professional fees incurred in connection with internal investigation Acquisition-related charges (benefits) ) Long-lived asset impairments Other charges, net $ $ $ $ In recent years, the Company has been undertaking productivity improvement initiatives in an effort to better optimize its operations. These restructuring initiatives have included the divestiture of certain non-core businesses, outsourcing of various manufacturing activities, transferring or ceasing operations at certain facilities, and an overall right-sizing within the Company based on the current business environment. The Company recorded total restructuring charges during the three and nine months ended September 30, 2015 of $12.7 million and $21.2 million, respectively, related to these initiatives. For the three months ended September 30, 2015, restructuring charges of $12.0 million related to the BSI segment and restructuring charges of $0.7 million related to the BEST segment. These charges consisted of $3.4 million of inventory provisions for excess inventory, $6.2 million of severance costs and $3.1 million of exit related costs, such as professional service and facility exit charges. For the nine months ended September 30, 2015, restructuring charges of $20.5 million related to the BSI segment and restructuring charges of $0.7 million related to the BEST segment. These charges consisted of $5.4 million of inventory provisions for excess inventory, $10.3 million of severance costs and $5.5 million of exit related costs. During the three and nine months ended September 30, 2015, the Company has recorded restructuring charges of $9.7 million and $15.9 million, respectively, as a component of Cost of Revenue and $3.0 million and $5.3 million, respectively, as a component of Other Charges, net in the accompanying condensed consolidated statements of income and comprehensive income (loss). The Company recorded restructuring charges during the three and nine months ended September 30, 2014 of $16.2 million and $29.3 million, respectively, related to these initiatives, all within BSI. For the three months ended September 30, 2014, the charges consisted of $4.1 million of severance costs, $2.0 million of exit related costs and $10.1 million of inventory provisions for excess inventory. For the nine months ended September 30, 2014, the charges consisted of $11.3 million of severance costs, $5.9 million of exit related costs and $12.1 million of inventory provisions for excess inventory. During the three and nine months ended September 30, 2014, the Company has recorded restructuring charges of $13.4 million and $22.3 million, respectively, as a component of Cost of Revenue and $2.8 million and $7.0 million, respectively, as a component of Other Charges, net in the condensed consolidated statements of income and comprehensive income (loss). Included in the total restructuring charges for the nine months ended September 30, 2015 are expenses specifically related to a plan approved by the Company’s Board of Directors in the third quarter of 2014 (the “ 2014 Plan”) to divest certain assets and implement a restructuring program in the former Chemical and Applied Markets (CAM) division within the Bruker CALID Group. Restructuring expenses recorded during the nine months ended September 30, 2015 related to the 2014 Plan consisted of $0.8 million of severance and exit costs and $0.5 million of inventory write-downs, of which $0.7 million were recorded as a component of Cost of Revenue and $0.6 million as a component of Other Charges, net in the accompanying condensed consolidated statements of income and comprehensive income (loss). From inception of the 2014 Plan in the third quarter of 2014, cumulative restructuring expenses recorded have been $18.8 million, consisting of $10.3 million of inventory write-downs and $8.5 million of severance and exit costs. Expenses expected to be incurred under the 2014 Plan have been substantially completed during the nine months ended September 30, 2015. The Company commenced a restructuring initiative in the first nine months of 2015 within the Magnetic Resonance division of the Bruker BioSpin Group, which was developed as a result of a revenue decline that occurred during the second half of 2014 and continued during the first half of 2015. This initiative is intended to improve Bruker BioSpin Group’s operating results. Restructuring actions are expected to result in a reduction of employee headcount within the Bruker BioSpin Group of approximately 9%. Included in the total restructuring charges discussed above are restructuring expenses related to this initiative recorded during the first nine months of 2015 in the amount of $10.2 million, with the majority recorded in the second and third quarters, consisting of $2.1 million for inventory write-downs and $8.1 million of severance and exit costs, of which $9.0 was recorded as a component of Cost of Revenue and $1.2 million as a component of Other Charges, net in the accompanying condensed consolidated statements of income and comprehensive income (loss). The restructuring also includes the closure and consolidation of certain Bruker BioSpin manufacturing facilities. The Company determined the restructuring was an indicator requiring the evaluation of property, plant and equipment for recoverability. The Company performed an evaluation during the nine months ended September 30, 2015 and determined that certain property, plant and equipment were impaired and recorded an impairment charge of $1.8 million to reduce those assets to fair value. This impairment charge is included as a component of Other Charges, net in the accompanying condensed consolidated statements of income and comprehensive income (loss). Total restructuring and other one-time charges related to this initiative, incurred in 2015 and continuing into 2016, are expected to be between $16 and $20 million, of which $12 to $15 million relate to employee separation and facility exit costs, and $4 to $5 million relate to estimated inventory write-downs and asset impairments. The following table sets forth the changes in restructuring reserves for the nine months ended September 30, 2015 (in millions): Total Severance Exit Costs Provisions for Excess Inventory Balance at December 31, 2014 $ $ $ $ Restructuring charges Cash payments ) ) ) ) Other, non-cash adjustments and foreign currency effect ) ) — ) Balance at September 30, 2015 $ $ $ During the nine months ended September 30, 2015, the Company outsourced its pension plan in Switzerland to an outside insurance provider and made certain plan design changes. In conjunction with the outsourcing of the plan, the Company recorded a one-time, non-cash settlement charge of $10.2 million as the plan assets and pension obligations for the retirees and other certain members of the population were transferred to the outside insurance provider. The settlement charge was recorded as a component of Other Charges, net in the accompanying condensed consolidated statements of income and comprehensive income (loss). |
Interest and Other Income (Expe
Interest and Other Income (Expense), Net | 9 Months Ended |
Sep. 30, 2015 | |
Interest and Other Income (Expense), Net | |
Interest and Other Income (Expense), Net | 14. Interest and Other Income (Expense), Net The components of Interest and Other Income (Expense), net, were as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Interest expense, net $ ) $ ) $ ) $ ) Exchange (losses) gains on foreign currency transactions ) ) ) Gain (loss) on disposal of product line — ) Other ) ) Interest and other income (expense), net $ ) $ $ ) $ ) |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Business Segment Information | |
Business Segment Information | 15. Business Segment Information The Company has two reporting segments, BSI and BEST, as discussed in Note 1 to the condensed consolidated financial statements. Revenue and operating income by reporting segment are presented below (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenue: BSI $ $ $ $ BEST Eliminations (a) ) ) ) ) Total revenue $ $ $ $ Operating Income BSI $ $ $ $ BEST Corporate, eliminations and other (b) ) Total operating income $ $ $ $ (a) Represents product and service revenue between reportable segments. (b) Represents corporate costs and eliminations not allocated to the reportable segments. Total assets by reporting segment are as follows (in millions): September 30, December 31, 2015 2014 Assets: BSI $ $ BEST Eliminations and other (a) ) ) Total assets $ $ (a) Assets not allocated to the reportable segments and eliminations of intercompany transactions. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | 16. Recent Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-11, Simplifying the Measurement of Inventory . The new guidance eliminates the measurement of inventory at market value, and inventory will now be measured at the lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. No other changes were made to the current guidance on inventory measurement. ASU No. 2015-11 is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted and should be applied prospectively. The Company is evaluating the provisions of this statement, including which period to adopt, and has not determined what impact the adoption of ASU No. 2015-11 will have on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . The new guidance changes the presentation of debt issuance costs in the balance sheet to a reduction of the related debt liability instead of classifying as an asset. The income statement presentation of debt issuance costs is unchanged. ASU No. 2015-03 is effective for annual periods after December 15, 2015, and interim periods within those years. Early application is permitted and the guidance is to be applied retrospectively to all prior periods presented. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, excluding debt issuance costs related to line-of-credit arrangements from the scope of ASU No. 2015-03. The Company does not expect the adoption of ASU No. 2015-03 to have a material impact on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements under ASC Topic 605. The new guidance was the result of a joint project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop common revenue standards for GAAP and International Financial Reporting Standards. The core principle of the new guidance is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 is effective prospectively for annual periods beginning after December 15, 2016, and interim periods within those years. Early application is not permitted. In August 2015, the FASB elected to defer the effective date of ASU No. 2014-09 by one year to annual periods beginning after December 15, 2017, with early application permitted as of the previous effective date. The Company is currently assessing the impact the new guidance may have on its consolidated financial statements upon adoption. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events | |
Subsequent Events | 17. Subsequent Events Subsequent to September 30, 2015, the Company approved and implemented a repatriation of $235.3 million of foreign earnings to the United States due to adverse interest rate conditions in Europe that were unfavorably impacting cash balances. Please see Note 9 of the condensed consolidated financial statements for additional information on the cash repatriation. On October 27, 2015, the Company entered into a new revolving credit agreement, referred to as the 2015 Credit Agreement, and terminated the Amended Credit Agreement. The 2015 Credit Agreement provides a maximum commitment on the Company’s revolving credit line of $500.0 million and a maturity date of October 2020. Please see Note 7 of the condensed consolidated financial statements for additional information on the 2015 Credit Agreement. On October 29, 2015, the Company acquired the shares of Jordan Valley Semiconductors, LTD. The acquired company provides X-ray metrology and defect-detection equipment for semiconductor process control and is expected to add approximately $25 to $30 million to the Company’s 2016 revenues. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation | |
Stock-based compensation expense | The Company recorded stock-based compensation expense as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options $ $ $ $ Restricted stock Total stock-based compensation $ $ $ $ |
Assumptions regarding volatility, expected life, dividend yield and risk-free interest rates | Assumptions regarding volatility, expected life, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below: 2015 2014 Risk-free interest rates 1.58% - 1.89% 1.81% - 2.10% Expected life 6.0-6.25 years 6.0 - 6.25 years Volatility 36.09% - 52.23% 53.24% - 56.24% Expected dividend yield |
Schedule of stock option activity | Stock option activity for the nine months ended September 30, 2015 was as follows: Shares Subject to Options Weighted Average Option Price Weighted Average Remaining Contractual Term (Yrs) Aggregate Intrinsic Value (in millions) (b) Outstanding at December 31, 2014 $ Granted Exercised ) Forfeited ) Outstanding at September 30, 2015 $ $ Exercisable at September 30, 2015 $ $ Exercisable and expected to vest at September 30, 2015 (a) $ $ (a) In addition to the options that are vested at September 30, 2015, the Company expects a portion of the unvested options to vest in the future. Options expected to vest in the future are determined by applying an estimated forfeiture rate to the options that are unvested as of September 30, 2015. (b) The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of $16.43 on September 30, 2015, or the date of exercises, as appropriate, and the exercise price of the underlying stock options. |
Schedule of restricted stock activity | Restricted stock activity for the nine months ended September 30, 2015 was as follows: Shares Subject to Restriction Weighted Average Grant Date Fair Value Outstanding at December 31, 2014 $ Granted Vested ) Forfeited ) Outstanding at September 30, 2015 $ |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share | |
Summary of the computation of basic and diluted weighted average shares outstanding and net income per common share | The following table sets forth the computation of basic and diluted weighted average shares outstanding (in millions, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income attributable to Bruker Corporation, as reported $ $ $ $ Weighted average shares outstanding: Weighted average shares outstanding-basic Effect of dilutive securities: Stock options and restricted stock Net income per common share attributable to Bruker Corporation shareholders: Basic and diluted $ $ $ $ |
Fair Value of Financial Instr25
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments | |
Schedule of financial instruments measured at fair value on a recurring basis | The following tables set forth the Company’s financial instruments that are measured at fair value on a recurring basis and presents them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement at September 30, 2015 and December 31, 2014 (in millions): September 30, 2015 Total Quoted Prices in Active Markets Available (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments $ $ $ — $ — Restricted cash — — Foreign exchange contracts — — Embedded derivatives in purchase and delivery contracts — — Long-term restricted cash — — Total assets recorded at fair value $ $ $ $ — Liabilities: Contingent consideration $ $ — $ — $ Foreign exchange contracts — — Embedded derivatives in purchase and delivery contracts — — Fixed price commodity contracts — — Total liabilities recorded at fair value $ $ — $ $ December 31, 2014 Total Quoted Prices in Active Markets Available (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents $ $ $ — $ — Short-term investments — — Restricted cash — — Embedded derivatives in purchase and delivery contracts — — Long-term restricted cash — Total assets recorded at fair value $ $ $ $ — Liabilities: Contingent consideration $ $ — $ — $ Foreign exchange contracts — — Embedded derivatives in purchase and delivery contracts — — Fixed price commodity contracts — — Total liabilities recorded at fair value $ $ — $ $ |
Schedule of changes in contingent consideration liabilities | The following table sets forth the changes in contingent consideration liabilities for the nine months ended September 30, 2015 (in millions): Balance at December 31, 2014 $ Current period adjustments ) Current period settlements ) Foreign currency effect ) Balance at September 30, 2015 $ |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Schedule of inventories | Inventories consisted of the following (in millions): September 30, December 31, 2015 2014 Raw materials $ $ Work-in-process Finished goods Demonstration units Inventories $ $ |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Other Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | The following table sets forth the changes in the carrying amount of goodwill for the nine months ended September 30, 2015 (in millions): Balance at December 31, 2014 $ Current period adjustments Impairment ) Foreign currency effect ) Balance at September 30, 2015 $ |
Summary of intangible assets | The following is a summary of intangible assets (in millions): September 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Existing technology and related patents $ $ ) $ $ $ ) $ Customer relationships ) ) Non compete contracts ) ) Trade names ) — ) — Intangible assets subject to amortization ) ) In-process research and development — — Intangible assets $ $ ) $ $ $ ) $ |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt | |
Components of debt obligations | The Company’s debt obligations as of September 30, 2015 and December 31, 2014 consisted of the following (in millions): September 30, December 31, 2015 2014 US Dollar revolving loan under the Amended Credit Agreement $ $ US Dollar notes under the Note Purchase Agreement Capital lease obligations and other loans Total debt Current portion of long-term debt ) ) Total long-term debt, less current portion $ $ |
Summary of maximum commitments and net amounts available under revolving loan and line of credit arrangements | The following is a summary of the maximum commitments and the net amounts available to the Company under revolving loan and line of credit arrangements at September 30, 2015 (in millions): Weighted Average Interest Rate Total Amount Committed by Lenders Outstanding Borrowings Outstanding Lines of Credit Total Amount Available Amended Credit Agreement % $ $ $ $ Other revolving lines of credit — — Total revolving lines of credit $ $ $ $ |
Derivative Instruments and He29
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities | |
Schedule of notional amounts outstanding under foreign currency contracts | The Company had the following notional amounts outstanding under foreign exchange contracts at September 30, 2015 and December 31, 2014 (in millions): Buy Notional Amount in Buy Currency Sell Maturity Notional Amount in U.S. Dollars Fair Value of Assets Fair Value of Liabilities September 30, 2015: Euro U.S. Dollars October 2015 $ $ $ — U.S. Dollars Euro December 2015 — — Swiss Francs U.S. Dollars October 2015 — $ $ $ December 31, 2014: Euro U.S. Dollars January 2015 to September 2015 $ $ — $ U.S. Dollars Euro February 2015 to December 2015 — — Euro British Pounds January 2015 to June 2015 — — Yen Euro March 2015 — — Swiss Francs U.S. Dollars January 2015 — $ $ — $ |
Schedule of fair value and balance sheet location of derivative instruments | The fair value of the derivative instruments described above is recorded in the consolidated balance sheets for the periods as follows (in millions): September 30, December 31, Balance Sheet Location 2015 2014 Derivative assets: Foreign exchange contracts Other current assets $ $ — Embedded derivatives in purchase and delivery contracts Other current assets Derivative liabilities: Foreign exchange contracts Other current liabilities $ $ Embedded derivatives in purchase and delivery contracts Other current liabilities Fixed price commodity contracts Other current liabilities |
Schedule of impact on net income of unrealized gains and losses resulting from changes in the fair value of derivative instruments not designated as hedging instruments | The impact on net income of unrealized gains and losses resulting from changes in the fair value of derivative instruments not designated as hedging instruments are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Foreign exchange contracts $ ) $ ) $ $ ) Embedded derivatives in purchase and delivery contracts ) ) Fixed price commodity contracts ) ) ) ) Income (expense), net $ ) $ ) $ $ ) |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) | |
Summary of comprehensive income (loss) | The following is a summary of comprehensive income (loss) (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Consolidated net income $ $ $ $ Foreign currency translation adjustments ) ) ) ) Pension liability adjustments Other — — — Net comprehensive income (loss) ) ) Less: Comprehensive income attributable to noncontrolling interests Comprehensive income (loss) attributable to Bruker Corporation $ $ ) $ $ ) |
Summary of the components of accumulated other comprehensive income (loss), net of tax | The following is a summary of the components of accumulated other comprehensive income (loss), net of tax, at September 30, 2015 (in millions): Foreign Currency Translation Pension Liability Adjustment Accumulated Other Comprehensive Income Balance at December 31, 2014 $ $ ) $ Other comprehensive loss before reclassifications ) ) ) Realized loss on reclassification, net of tax of $2.4 million — Net current period other comprehensive income (loss) ) ) Balance at September 30, 2015 $ $ ) $ ) |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Noncontrolling Interests | |
Schedule of changes in noncontrolling interests | The following table sets forth the changes in noncontrolling interests (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Balance at beginning of period $ $ $ $ Net income Foreign currency translation adjustments — — ) ) Other — ) ) Balance at end of period $ $ $ $ |
Other Charges, Net (Tables)
Other Charges, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Charges, Net | |
Components of Other Charges, net | The components of Other Charges, net were as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Information technology transformation costs $ $ $ $ Restructuring charges Pension settlement charge — — — Professional fees incurred in connection with internal investigation Acquisition-related charges (benefits) ) Long-lived asset impairments Other charges, net $ $ $ $ |
Schedule of changes in the restructuring reserves | The following table sets forth the changes in restructuring reserves for the nine months ended September 30, 2015 (in millions): Total Severance Exit Costs Provisions for Excess Inventory Balance at December 31, 2014 $ $ $ $ Restructuring charges Cash payments ) ) ) ) Other, non-cash adjustments and foreign currency effect ) ) — ) Balance at September 30, 2015 $ $ $ |
Interest and Other Income (Ex33
Interest and Other Income (Expense), Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Interest and Other Income (Expense), Net | |
Components of Interest and Other Income (Expense), net | The components of Interest and Other Income (Expense), net, were as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Interest expense, net $ ) $ ) $ ) $ ) Exchange (losses) gains on foreign currency transactions ) ) ) Gain (loss) on disposal of product line — ) Other ) ) Interest and other income (expense), net $ ) $ $ ) $ ) |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Segment Information | |
Schedule of revenue, operating income and total assets by reporting segment | Revenue and operating income by reporting segment are presented below (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenue: BSI $ $ $ $ BEST Eliminations (a) ) ) ) ) Total revenue $ $ $ $ Operating Income BSI $ $ $ $ BEST Corporate, eliminations and other (b) ) Total operating income $ $ $ $ (a) Represents product and service revenue between reportable segments. (b) Represents corporate costs and eliminations not allocated to the reportable segments. Total assets by reporting segment are as follows (in millions): September 30, December 31, 2015 2014 Assets: BSI $ $ BEST Eliminations and other (a) ) ) Total assets $ $ (a) Assets not allocated to the reportable segments and eliminations of intercompany transactions. |
Description of Business (Detail
Description of Business (Details) | 9 Months Ended |
Sep. 30, 2015segment | |
Description of Business | |
Number of reporting segments | 2 |
BSI | |
Description of Business | |
Segment revenue (as a percent) | 93.00% |
Number of operating segments | 3 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | May. 31, 2010 | |
Stock-Based Compensation | |||||
Total stock-based compensation | $ 2.2 | $ 2.1 | $ 5.8 | $ 7.1 | |
Stock options, additional information | |||||
Fair value of the Company's common stock price (in dollars per share) | $ 16.43 | $ 16.43 | |||
Stock options | |||||
Stock-Based Compensation | |||||
Total stock-based compensation | $ 2 | 1.7 | $ 5.3 | $ 4.7 | |
Risk-free interest rate, minimum (as a percent) | 1.58% | 1.81% | |||
Risk-free interest rate, maximum (as a percent) | 1.89% | 2.10% | |||
Volatility, minimum (as a percent) | 36.09% | 53.24% | |||
Volatility, maximum (as a percent) | 52.23% | 56.24% | |||
Expected dividend yield (as a percent) | 0.00% | 0.00% | |||
Stock options | Minimum | |||||
Stock-Based Compensation | |||||
Vesting period | 3 years | ||||
Expected life | 6 years | 6 years | |||
Stock options | Maximum | |||||
Stock-Based Compensation | |||||
Vesting period | 5 years | ||||
Expected life | 6 years 3 months | 6 years 3 months | |||
Restricted stock | |||||
Stock-Based Compensation | |||||
Total stock-based compensation | $ 0.2 | $ 0.4 | $ 0.5 | $ 2.4 | |
Bruker Corporation Stock Plan | |||||
Stock-Based Compensation | |||||
Common stock authorized for issuance (in shares) | 8,000,000 | ||||
Bruker Corporation Stock Plan | Minimum | |||||
Stock-Based Compensation | |||||
Vesting period | 3 years | ||||
Bruker Corporation Stock Plan | Maximum | |||||
Stock-Based Compensation | |||||
Vesting period | 5 years | ||||
Bruker Corporation Stock Plan | Stock options | |||||
Stock options, Number of Shares | |||||
Outstanding at the beginning of the period (in shares) | 4,810,588 | ||||
Granted (in shares) | 1,082,819 | ||||
Exercised (in shares) | (616,052) | ||||
Forfeited (in shares) | (324,779) | ||||
Outstanding at the end of the period (in shares) | 4,952,576 | 4,952,576 | |||
Exercisable at the end of the period (in shares) | 2,596,387 | 2,596,387 | |||
Exercisable and expected to vest at the end of the period (in shares) | 4,815,917 | 4,815,917 | |||
Stock options, Weighted Average Option Price | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 15.24 | ||||
Granted (in dollars per share) | 19.80 | ||||
Exercised (in dollars per share) | 11.68 | ||||
Forfeited (in dollars per share) | 19.16 | ||||
Outstanding at the end of the period (in dollars per share) | $ 16.42 | 16.42 | |||
Exercisable at the end of the period (in dollars per share) | 13.82 | 13.82 | |||
Exercisable and expected to vest at the end of the period (in dollars per share) | $ 16.34 | $ 16.34 | |||
Stock options, additional information | |||||
Weighted Average Remaining Contractual Term, Outstanding | 6 years 7 months 6 days | ||||
Weighted Average Remaining Contractual Term, Exercisable | 4 years 10 months 24 days | ||||
Weighted Average Remaining Contractual Term, Exercisable and expected to vest | 6 years 6 months | ||||
Aggregate Intrinsic Value, Outstanding | $ 9.7 | $ 9.7 | |||
Aggregate Intrinsic Value, Exercisable | 9 | 9 | |||
Aggregate Intrinsic Value, Exercisable and expected to vest | 9.7 | $ 9.7 | |||
Weighted average fair values of options granted (in dollars per share) | $ 7.82 | $ 10.82 | |||
Intrinsic value of options exercised | $ 5.1 | $ 9.7 | |||
Restricted stock, Weighted Average Grant Date Fair Value | |||||
Expected pre-tax stock-based compensation expense | $ 18.7 | $ 18.7 | |||
Weighted average remaining service period | 2 years 2 months 12 days | ||||
Bruker Corporation Stock Plan | Restricted stock | |||||
Restricted stock, Number of Shares | |||||
Outstanding at the beginning of the period (in shares) | 309,725 | ||||
Granted (in shares) | 130,274 | ||||
Vested (in shares) | (56,395) | ||||
Forfeited (in shares) | (145,857) | ||||
Outstanding at the end of the period (in shares) | 237,747 | 237,747 | |||
Restricted stock, Weighted Average Grant Date Fair Value | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 17.20 | ||||
Granted (in dollars per share) | 19.72 | ||||
Vested (in dollars per share) | 17.02 | ||||
Forfeited (in dollars per share) | 17.42 | ||||
Outstanding at the end of the period (in dollars per share) | $ 18.49 | $ 18.49 | |||
Total fair value of shares vested | $ 1 | $ 3 | |||
Expected pre-tax stock-based compensation expense | $ 4.1 | $ 4.1 | |||
Weighted average remaining service period | 3 years |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share | ||||
Net income attributable to Bruker Corporation, as reported -basic | $ 11.8 | $ 5.5 | $ 40.2 | $ 30.6 |
Weighted average shares outstanding: | ||||
Weighted average shares outstanding-basic | 167.8 | 168 | 168.2 | 167.5 |
Effect of dilutive securities: | ||||
Stock options and restricted stock (in shares) | 0.9 | 1.6 | 0.9 | 2 |
Weighted average shares outstanding-diluted | 168.7 | 169.6 | 169.1 | 169.5 |
Net income per common share attributable to Bruker Corporation shareholders: | ||||
Basic and diluted (in dollars per share) | $ 0.07 | $ 0.03 | $ 0.24 | $ 0.18 |
Earnings Per Share (Details 2)
Earnings Per Share (Details 2) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock options | ||||
Anti-dilutive securities | ||||
Number of shares excluded from the computation of diluted earnings per share | 2.3 | 0.2 | 2.3 | 0.2 |
Earnings Per Share (Details 3)
Earnings Per Share (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Share repurchase program | ||
Aggregate cost of common stock repurchased | $ 24.9 | |
2015 Share Repurchase Program | ||
Share repurchase program | ||
Current expectation of target for share repurchases as a percentage of outstanding shares | 1.00% | |
Common stock repurchased during the period (in shares) | 395,000 | 1,245,000 |
Aggregate cost of common stock repurchased | $ 7.7 | $ 24.9 |
Fair Value of Financial Instr40
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Assets: | ||
Short-term investments | $ 201.3 | $ 178 |
Significant Other Observable Inputs (Level 2) | ||
Liabilities: | ||
Fair value of the long-term fixed interest rate debt | 254 | 257.2 |
Recurring basis | ||
Assets: | ||
Cash equivalents | 67.9 | |
Short-term investments | 201.3 | 178 |
Restricted cash | 0.7 | 1.8 |
Foreign exchange contracts | 1.3 | |
Embedded derivatives in purchase and delivery contracts | 0.4 | 0.6 |
Long-term restricted cash | 2.8 | 3.4 |
Total assets recorded at fair value | 206.5 | 251.7 |
Liabilities: | ||
Contingent consideration | 5.2 | 11.9 |
Foreign exchange contracts | 0.6 | 5.1 |
Embedded derivatives in purchase and delivery contracts | 0.4 | 0.4 |
Fixed price commodity contracts | 0.4 | 0.2 |
Total liabilities recorded at fair value | 6.6 | 17.6 |
Recurring basis | Quoted Prices in Active Markets Available (Level 1) | ||
Assets: | ||
Cash equivalents | 67.9 | |
Short-term investments | 201.3 | 178 |
Restricted cash | 0.7 | 1.8 |
Long-term restricted cash | 2.8 | 3.4 |
Total assets recorded at fair value | 204.8 | 251.1 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Foreign exchange contracts | 1.3 | |
Embedded derivatives in purchase and delivery contracts | 0.4 | 0.6 |
Total assets recorded at fair value | 1.7 | 0.6 |
Liabilities: | ||
Foreign exchange contracts | 0.6 | 5.1 |
Embedded derivatives in purchase and delivery contracts | 0.4 | 0.4 |
Fixed price commodity contracts | 0.4 | 0.2 |
Total liabilities recorded at fair value | 1.4 | 5.7 |
Recurring basis | Significant Unobservable Inputs (Level 3) | ||
Liabilities: | ||
Contingent consideration | 5.2 | 11.9 |
Total liabilities recorded at fair value | $ 5.2 | $ 11.9 |
Fair Value of Financial Instr41
Fair Value of Financial Instruments (Details 2) - Contingent consideration - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in contingent consideration liabilities | ||||
Balance at the beginning of the period | $ 11.9 | |||
Current period adjustments | $ 0 | $ 0 | (3) | $ 0.1 |
Current period settlements | (3.6) | |||
Foreign currency effect | (0.1) | |||
Balance at the end of the period | 5.2 | 5.2 | ||
Amount of changes to the fair value of the contingent consideration recognized in earnings | $ 0 | $ 0 | $ (3) | $ 0.1 |
Fair Value of Financial Instr42
Fair Value of Financial Instruments (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Investments in time and call deposits | |||||
Cash equivalents | $ 0 | $ 0 | |||
Short-term investments | 201.3 | 201.3 | $ 178 | ||
Unrealized gains (losses) on available-for-sale securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Minimum | |||||
Investments in time and call deposits | |||||
Maturity of time deposits | 1 month | ||||
Period of ability to redeem invested amounts on call deposits | 31 days | ||||
Maximum | |||||
Investments in time and call deposits | |||||
Maturity of time deposits | 12 months | ||||
Period of ability to redeem invested amounts on call deposits | 95 days |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Inventories | |||||
Raw materials | $ 177.9 | $ 177.9 | $ 159.5 | ||
Work-in-process | 143.1 | 143.1 | 169.5 | ||
Finished goods | 119.6 | 119.6 | 109.9 | ||
Demonstration units | 37.7 | 37.7 | 38.5 | ||
Inventories | 478.3 | 478.3 | 477.4 | ||
Inventory-in-transit | 55.8 | 55.8 | $ 58.6 | ||
Write-down of demonstration inventories to net realizable value | $ 5.1 | $ 7.4 | $ 15 | $ 22.6 |
Goodwill and Other Intangible44
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Goodwill | ||
Balance at the beginning of the period | $ 127.8 | |
Current period adjustments | 0.5 | |
Impairment | (0.7) | |
Foreign currency effect | (2.5) | |
Balance at the end of the period | $ 125.1 | 125.1 |
BSI | Bruker BioSpin - Preclinical Imaging | ||
Goodwill | ||
Impairment | $ (0.7) | $ (0.7) |
Goodwill and Other Intangible45
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Intangible assets: | |||||
Gross Carrying Amount, intangible assets subject to amortization | $ 162.1 | $ 162.1 | $ 165.2 | ||
Accumulated Amortization, intangible assets subject to amortization | (96.5) | (96.5) | (87.7) | ||
Net Carrying Amount, intangible assets subject to amortization | 65.6 | 65.6 | 77.5 | ||
Gross Carrying Amount, total intangible assets | 162.7 | 162.7 | 171.5 | ||
Net Carrying Amount, total intangible assets | 66.2 | 66.2 | 83.8 | ||
Amortization expense related to intangible assets subject to amortization | 5.1 | $ 5.1 | 15.5 | $ 15.1 | |
BSI | Bruker BioSpin - Preclinical Imaging | |||||
Intangible assets: | |||||
Impairment charge on definite-lived intangible assets | 1.8 | 1.8 | |||
In-process research and development | |||||
Intangible assets: | |||||
Gross Carrying Amount, intangible assets not subject to amortization | 0.6 | 0.6 | 6.3 | ||
Net Carrying Amount, intangible assets not subject to amortization | 0.6 | 0.6 | 6.3 | ||
Existing technology and related patents | |||||
Intangible assets: | |||||
Gross Carrying Amount, intangible assets subject to amortization | 148.5 | 148.5 | 149.8 | ||
Accumulated Amortization, intangible assets subject to amortization | (90.5) | (90.5) | (81.7) | ||
Net Carrying Amount, intangible assets subject to amortization | 58 | 58 | 68.1 | ||
Customer relationships | |||||
Intangible assets: | |||||
Gross Carrying Amount, intangible assets subject to amortization | 11.6 | 11.6 | 13.4 | ||
Accumulated Amortization, intangible assets subject to amortization | (5.3) | (5.3) | (5.6) | ||
Net Carrying Amount, intangible assets subject to amortization | 6.3 | 6.3 | 7.8 | ||
Non compete contracts | |||||
Intangible assets: | |||||
Gross Carrying Amount, intangible assets subject to amortization | 1.8 | 1.8 | 1.8 | ||
Accumulated Amortization, intangible assets subject to amortization | (0.5) | (0.5) | (0.2) | ||
Net Carrying Amount, intangible assets subject to amortization | 1.3 | 1.3 | 1.6 | ||
Trade names | |||||
Intangible assets: | |||||
Gross Carrying Amount, intangible assets subject to amortization | 0.2 | 0.2 | 0.2 | ||
Accumulated Amortization, intangible assets subject to amortization | $ (0.2) | $ (0.2) | $ (0.2) |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Debt | ||
Total debt | $ 371.4 | $ 355 |
Current portion of long-term debt | (130.3) | (0.8) |
Total long-term debt, less current portion | 241.1 | 354.2 |
US Dollar notes under the Note Purchase Agreement | ||
Debt | ||
Total debt | 240 | 240 |
Capital lease obligations and other loans | ||
Debt | ||
Total debt | 1.9 | 2.5 |
Amended Credit Agreement | US Dollar revolving loans | ||
Debt | ||
Total debt | $ 129.5 | $ 112.5 |
Debt (Details 2)
Debt (Details 2) $ in Millions | Oct. 27, 2015USD ($) | Sep. 30, 2015USD ($) | May. 31, 2011USD ($) |
Revolving Loans | |||
Debt | |||
Maximum commitment | $ 462.8 | ||
Amended Credit Agreement | US Dollar revolving loans | |||
Debt | |||
Maximum commitment | $ 250 | $ 250 | |
Maximum leverage ratio | 3 | ||
Minimum interest coverage ratio | 3 | ||
Amended Credit Agreement | US Dollar revolving loans | Minimum | |||
Debt | |||
Interest rate added to base rate (as a percent) | 0.80% | ||
Facility fee (as a percent) | 0.20% | ||
Amended Credit Agreement | US Dollar revolving loans | Maximum | |||
Debt | |||
Interest rate added to base rate (as a percent) | 1.65% | ||
Facility fee (as a percent) | 0.35% | ||
Amended Credit Agreement | US Dollar revolving loans | Prime rate | |||
Debt | |||
Variable interest rate base | prime rate | ||
Amended Credit Agreement | US Dollar revolving loans | Federal funds rate | |||
Debt | |||
Variable interest rate base | federal funds rate | ||
Interest rate added to base rate (as a percent) | 0.50% | ||
Amended Credit Agreement | US Dollar revolving loans | Adjusted LIBOR | |||
Debt | |||
Variable interest rate base | adjusted LIBOR | ||
Interest rate added to base rate (as a percent) | 1.00% | ||
Amended Credit Agreement | US Dollar revolving loans | LIBOR | |||
Debt | |||
Variable interest rate base | LIBOR | ||
2015 Credit Agreement | US Dollar revolving loans | Subsequent Event | |||
Debt | |||
Maximum commitment | $ 500 | ||
Maximum leverage ratio | 3.5 | ||
Minimum interest coverage ratio | 2.5 | ||
2015 Credit Agreement | US Dollar revolving loans | Subsequent Event | Minimum | |||
Debt | |||
Facility fee (as a percent) | 0.10% | ||
2015 Credit Agreement | US Dollar revolving loans | Subsequent Event | Maximum | |||
Debt | |||
Facility fee (as a percent) | 0.20% | ||
2015 Credit Agreement | US Dollar revolving loans | Greatest of prime rate, federal funds rate plus spread and adjusted LIBOR plus spread | Subsequent Event | Minimum | |||
Debt | |||
Interest rate added to base rate (as a percent) | 0.00% | ||
2015 Credit Agreement | US Dollar revolving loans | Greatest of prime rate, federal funds rate plus spread and adjusted LIBOR plus spread | Subsequent Event | Maximum | |||
Debt | |||
Interest rate added to base rate (as a percent) | 0.30% | ||
2015 Credit Agreement | US Dollar revolving loans | Prime rate | Subsequent Event | |||
Debt | |||
Variable interest rate base | prime rate | ||
2015 Credit Agreement | US Dollar revolving loans | Federal funds rate | Subsequent Event | |||
Debt | |||
Variable interest rate base | federal funds rate | ||
Interest rate added to base rate (as a percent) | 0.50% | ||
2015 Credit Agreement | US Dollar revolving loans | Adjusted LIBOR | Subsequent Event | |||
Debt | |||
Variable interest rate base | adjusted LIBOR | ||
Interest rate added to base rate (as a percent) | 1.00% | ||
2015 Credit Agreement | US Dollar revolving loans | LIBOR | Subsequent Event | |||
Debt | |||
Variable interest rate base | LIBOR | ||
2015 Credit Agreement | US Dollar revolving loans | LIBOR | Subsequent Event | Minimum | |||
Debt | |||
Interest rate added to base rate (as a percent) | 0.90% | ||
2015 Credit Agreement | US Dollar revolving loans | LIBOR | Subsequent Event | Maximum | |||
Debt | |||
Interest rate added to base rate (as a percent) | 1.30% |
Debt (Details 3)
Debt (Details 3) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | May. 31, 2011 |
Revolving Loans | |||
Revolving loans | |||
Total Amount Committed by Lenders | $ 462.8 | ||
Outstanding Borrowings | 129.5 | ||
Outstanding Letters of Credit | 134.9 | $ 150.3 | |
Total Amount Available | 198.4 | ||
Other revolving lines of credit | |||
Revolving loans | |||
Total Amount Committed by Lenders | 212.8 | ||
Outstanding Letters of Credit | 132.2 | ||
Total Amount Available | $ 80.6 | ||
Amended Credit Agreement | US Dollar revolving loans | |||
Revolving loans | |||
Weighted Average Interest Rate (as a percent) | 1.50% | ||
Total Amount Committed by Lenders | $ 250 | $ 250 | |
Outstanding Borrowings | 129.5 | ||
Outstanding Letters of Credit | 2.7 | ||
Total Amount Available | $ 117.8 |
Debt (Details 4)
Debt (Details 4) - US Dollar notes under the Note Purchase Agreement $ in Millions | 9 Months Ended | |
Sep. 30, 2015USD ($) | Jan. 31, 2012USD ($) | |
Debt | ||
Senior notes | $ 240 | |
Additional aggregate principal amount that may be issued | $ 600 | |
Minimum percentage of original aggregate principal that may be prepaid | 10.00% | |
Prepayment price as percentage of principal amount | 100.00% | |
Prepayment price as percentage of principal amount, in the event of a change in control | 100.00% | |
Maximum leverage ratio | 3.50 | |
Period for interest coverage ratio | 1 year | |
Minimum interest coverage ratio | 2.50 | |
Priority debt as a percentage of consolidated net worth | 25.00% | |
Minimum | ||
Debt | ||
Written notice period to holders of the Notes | 30 days | |
Maximum | ||
Debt | ||
Written notice period to holders of the Notes | 60 days | |
3.16% Series 2012A Senior Notes, Tranche A, due January 18, 2017 | ||
Debt | ||
Senior notes | $ 20 | |
Interest rate, stated percentage | 3.16% | |
3.74% Series 2012A Senior Notes, Tranche B, due January 18, 2019 | ||
Debt | ||
Senior notes | $ 15 | |
Interest rate, stated percentage | 3.74% | |
4.31% Series 2012A Senior Notes, Tranche C, due January 18, 2022 | ||
Debt | ||
Senior notes | $ 105 | |
Interest rate, stated percentage | 4.31% | |
4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024 | ||
Debt | ||
Senior notes | $ 100 | |
Interest rate, stated percentage | 4.46% |
Derivative Instruments and He50
Derivative Instruments and Hedging Activities (Details) € in Millions, ¥ in Millions, SFr in Millions, $ in Millions | Sep. 30, 2015CHF (SFr) | Sep. 30, 2015EUR (€) | Sep. 30, 2015USD ($) | Dec. 31, 2014JPY (¥) | Dec. 31, 2014CHF (SFr) | Dec. 31, 2014EUR (€) | Dec. 31, 2014USD ($) |
Embedded derivatives in purchase and delivery contracts | |||||||
Derivative instruments and hedging activities | |||||||
Notional amount of derivative sale contracts | $ 36.4 | $ 41.1 | |||||
Notional amount of derivative purchase contracts | 3.1 | 8.7 | |||||
Fixed price commodity contracts | |||||||
Derivative instruments and hedging activities | |||||||
Notional Amount | 2.5 | 2.7 | |||||
Revolving Loans | |||||||
Derivative instruments and hedging activities | |||||||
Amount outstanding | 129.5 | ||||||
Not designated as hedging instruments | Foreign exchange contracts | |||||||
Derivative instruments and hedging activities | |||||||
Notional Amount | 100.1 | 99.8 | |||||
Fair Value of Assets | 1.3 | ||||||
Fair Value of Liabilities | 0.6 | 5.1 | |||||
Not designated as hedging instruments | Foreign exchange contracts | US Dollar:EUR | |||||||
Derivative instruments and hedging activities | |||||||
Notional Amount | € 56.4 | 61.7 | € 43.3 | 55.4 | |||
Fair Value of Assets | 1.3 | ||||||
Fair Value of Liabilities | 2.9 | ||||||
Not designated as hedging instruments | Foreign exchange contracts | EUR:US Dollar | |||||||
Derivative instruments and hedging activities | |||||||
Notional Amount | 0.1 | 0.3 | |||||
Not designated as hedging instruments | Foreign exchange contracts | GBP:EUR | |||||||
Derivative instruments and hedging activities | |||||||
Notional Amount | € 0.1 | 0.1 | |||||
Not designated as hedging instruments | Foreign exchange contracts | EUR:YEN | |||||||
Derivative instruments and hedging activities | |||||||
Notional Amount | ¥ 5.7 | 0.1 | |||||
Not designated as hedging instruments | Foreign exchange contracts | US Dollar:CHF | |||||||
Derivative instruments and hedging activities | |||||||
Notional Amount | SFr 36.7 | 38.3 | SFr 41.4 | 43.9 | |||
Fair Value of Liabilities | 0.6 | $ 2.2 | |||||
Amended Credit Agreement | US Dollar revolving loans | |||||||
Derivative instruments and hedging activities | |||||||
Amount outstanding | $ 129.5 |
Derivative Instruments and He51
Derivative Instruments and Hedging Activities (Details 2) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Foreign exchange contracts | Other current assets | ||
Derivative instruments and hedging activities | ||
Derivative assets | $ 1.3 | |
Foreign exchange contracts | Other current liabilities | ||
Derivative instruments and hedging activities | ||
Derivative liabilities | 0.6 | $ 5.1 |
Embedded derivatives in purchase and delivery contracts | Other current assets | ||
Derivative instruments and hedging activities | ||
Derivative assets | 0.4 | 0.6 |
Embedded derivatives in purchase and delivery contracts | Other current liabilities | ||
Derivative instruments and hedging activities | ||
Derivative liabilities | 0.4 | 0.4 |
Fixed price commodity contracts | Other current liabilities | ||
Derivative instruments and hedging activities | ||
Derivative liabilities | $ 0.4 | $ 0.2 |
Derivative Instruments and He52
Derivative Instruments and Hedging Activities (Details 3) - Not designated as hedging instruments - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative instruments and hedging activities | ||||
Impact on net income of unrealized gains and losses resulting from changes in fair value of derivative instruments | $ (2.7) | $ (6.3) | $ 5.4 | $ (9.5) |
Foreign exchange contracts | ||||
Derivative instruments and hedging activities | ||||
Impact on net income of unrealized gains and losses resulting from changes in fair value of derivative instruments | (2.2) | (6.3) | 5.8 | (9.5) |
Embedded derivatives in purchase and delivery contracts | ||||
Derivative instruments and hedging activities | ||||
Impact on net income of unrealized gains and losses resulting from changes in fair value of derivative instruments | (0.4) | 0.2 | (0.2) | 0.2 |
Fixed price commodity contracts | ||||
Derivative instruments and hedging activities | ||||
Impact on net income of unrealized gains and losses resulting from changes in fair value of derivative instruments | $ (0.1) | $ (0.2) | $ (0.2) | $ (0.2) |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income tax provision | $ 10.7 | $ 2.7 | $ 17.8 | $ 24.7 | ||
Effective tax rates (as a percent) | 45.30% | 30.00% | 29.30% | 42.70% | ||
Unrecognized tax benefits, excluding penalties and interest | $ 28.6 | $ 28.6 | $ 27 | |||
Portion of unrecognized tax benefits, which if recognized, would result in a reduction of the effective tax rate | 14.8 | 14.8 | 12.8 | |||
Accrued interest and penalties related to uncertain tax positions | 4.9 | 4.9 | $ 3.6 | |||
Penalties and interest expense relating to unrecognized tax benefits | $ 0 | $ 0.2 | $ 1.1 | $ 0.2 | ||
Subsequent Event | ||||||
Repatriation of foreign earnings to the United States | $ 235.3 | |||||
Subsequent Event | Expected | ||||||
Incremental U.S. income tax related to repatriation | 0 | |||||
Subsequent Event | Amended Credit Agreement | US Dollar revolving loans | ||||||
Outstanding balance on revolving line of credit, repaid | $ 129.5 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Revolving Loans | ||
Commitments and contingencies | ||
Bank guarantees primarily for customer advances | $ 134.9 | $ 150.3 |
Accumulated Other Comprehensi55
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Summary of comprehensive income | ||||
Consolidated net income | $ 12.9 | $ 6.3 | $ 42.9 | $ 33.1 |
Foreign currency translation adjustments | (10.2) | (84.1) | (47.3) | (84.7) |
Pension liability adjustments | 2.3 | 1.1 | 11.1 | 1 |
Other | 0.3 | |||
Net comprehensive income (loss) | 5 | (76.7) | 6.7 | (50.3) |
Less: Comprehensive income attributable to noncontrolling interests | 1.2 | 0.8 | 2.4 | 2.5 |
Comprehensive income (loss) attributable to Bruker Corporation | $ 3.8 | $ (77.5) | $ 4.3 | $ (52.8) |
Accumulated Other Comprehensi56
Accumulated Other Comprehensive Income (Loss) (Details 2) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Summary of the components of accumulated other comprehensive income, net of tax | |
Balance at beginning of period | $ 28.2 |
Other comprehensive loss before reclassifications | (47.1) |
Realized loss on reclassification, net of tax of $2.4 million | 11.2 |
Net current period other comprehensive income (loss) | (35.9) |
Balance at end of period | (7.7) |
Realized loss on reclassification, tax | 2.4 |
Foreign Currency Translation | |
Summary of the components of accumulated other comprehensive income, net of tax | |
Balance at beginning of period | 66 |
Other comprehensive loss before reclassifications | (47) |
Net current period other comprehensive income (loss) | (47) |
Balance at end of period | 19 |
Pension Liability Adjustment | |
Summary of the components of accumulated other comprehensive income, net of tax | |
Balance at beginning of period | (37.8) |
Other comprehensive loss before reclassifications | (0.1) |
Realized loss on reclassification, net of tax of $2.4 million | 11.2 |
Net current period other comprehensive income (loss) | 11.1 |
Balance at end of period | $ (26.7) |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Noncontrolling interests | ||||
Balance at beginning of period | $ 6.6 | $ 5.1 | $ 5.8 | $ 4.1 |
Net income | 1.1 | 0.8 | 2.7 | 2.5 |
Foreign currency translation adjustments | (0.3) | (1.1) | ||
Other | (0.3) | (0.5) | 0.1 | |
Balance at end of period | $ 7.7 | $ 5.6 | $ 7.7 | $ 5.6 |
Other Charges, Net (Details)
Other Charges, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Other Charges, Net | ||||
Information technology transformation costs | $ 2.6 | $ 1.1 | $ 6.2 | $ 2.4 |
Restructuring charges | 3 | 2.8 | 5.3 | 7 |
Pension settlement charge | 10.2 | |||
Professional fees incurred in connection with internal investigation | 0.4 | 0.3 | 0.4 | 3.1 |
Acquisition-related charges (benefits) | 0.4 | 1.2 | (2.5) | 2.1 |
Long-lived asset impairments | 2.5 | 6.9 | 4.3 | 6.9 |
Other charges, net | $ 8.9 | $ 12.3 | $ 23.9 | $ 21.5 |
Other Charges, Net (Details 2)
Other Charges, Net (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 15 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | |
Restructuring charges | |||||
Restructuring charges | $ 12.7 | $ 21.2 | |||
Inventory provisions for inventory write-downs | 3.4 | 5.4 | |||
Impairment of assets | 2.5 | $ 6.9 | 4.3 | $ 6.9 | |
Severance costs | 6.2 | 10.3 | |||
Exit related costs | 3.1 | 5.5 | |||
Cost of Revenue | |||||
Restructuring charges | |||||
Restructuring charges | 9.7 | 13.4 | 15.9 | 22.3 | |
Other Charges | |||||
Restructuring charges | |||||
Restructuring charges | 3 | 2.8 | 5.3 | 7 | |
BSI | |||||
Restructuring charges | |||||
Restructuring charges | 12 | 16.2 | 20.5 | 29.3 | |
Inventory provisions for inventory write-downs | 10.1 | 12.1 | |||
Severance costs | 4.1 | 11.3 | |||
Exit related costs | $ 2 | $ 5.9 | |||
BSI | CAM division | |||||
Restructuring charges | |||||
Restructuring charges | $ 18.8 | ||||
Inventory provisions for inventory write-downs | 0.5 | 10.3 | |||
Severance and exit costs | 0.8 | 8.5 | |||
BSI | CAM division | Cost of Revenue | |||||
Restructuring charges | |||||
Restructuring charges | 0.7 | ||||
BSI | CAM division | Other Charges | |||||
Restructuring charges | |||||
Restructuring charges | $ 0.6 | ||||
BSI | Bruker BioSpin - Magnetic Resonance | |||||
Restructuring charges | |||||
Expected reduction in employee headcount (as a percent) | 9.00% | ||||
Restructuring charges | $ 10.2 | ||||
Inventory provisions for inventory write-downs | 2.1 | ||||
Severance and exit costs | 8.1 | ||||
Impairment charge on property, plant and equipment | 1.8 | ||||
BSI | Bruker BioSpin - Magnetic Resonance | Cost of Revenue | |||||
Restructuring charges | |||||
Restructuring charges | 9 | ||||
BSI | Bruker BioSpin - Magnetic Resonance | Other Charges | |||||
Restructuring charges | |||||
Restructuring charges | 1.2 | ||||
BSI | Bruker BioSpin - Magnetic Resonance | Minimum | |||||
Restructuring charges | |||||
Expected restructuring and related one-time charges | 16 | 16 | 16 | ||
BSI | Bruker BioSpin - Magnetic Resonance | Minimum | Employee separation and facility exit costs | |||||
Restructuring charges | |||||
Expected restructuring and related one-time charges | 12 | 12 | 12 | ||
BSI | Bruker BioSpin - Magnetic Resonance | Minimum | Inventory write-downs and asset impairments | |||||
Restructuring charges | |||||
Expected restructuring and related one-time charges | 4 | 4 | 4 | ||
BSI | Bruker BioSpin - Magnetic Resonance | Maximum | |||||
Restructuring charges | |||||
Expected restructuring and related one-time charges | 20 | 20 | 20 | ||
BSI | Bruker BioSpin - Magnetic Resonance | Maximum | Employee separation and facility exit costs | |||||
Restructuring charges | |||||
Expected restructuring and related one-time charges | 15 | 15 | 15 | ||
BSI | Bruker BioSpin - Magnetic Resonance | Maximum | Inventory write-downs and asset impairments | |||||
Restructuring charges | |||||
Expected restructuring and related one-time charges | 5 | 5 | $ 5 | ||
BEST | |||||
Restructuring charges | |||||
Restructuring charges | $ 0.7 | $ 0.7 |
Other Charges, Net (Details 3)
Other Charges, Net (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Changes in the restructuring reserves | ||
Balance at the beginning of the period | $ 16.1 | |
Restructuring charges | $ 12.7 | 21.2 |
Cash payments | (14.7) | |
Other, non-cash adjustments and foreign currency effect | (2.4) | |
Balance at the end of the period | 20.2 | 20.2 |
Severance | ||
Changes in the restructuring reserves | ||
Balance at the beginning of the period | 7.1 | |
Restructuring charges | 10.3 | |
Cash payments | (9.6) | |
Other, non-cash adjustments and foreign currency effect | (0.5) | |
Balance at the end of the period | 7.3 | 7.3 |
Exit Costs | ||
Changes in the restructuring reserves | ||
Balance at the beginning of the period | 1.3 | |
Restructuring charges | 5.5 | |
Cash payments | (4.1) | |
Balance at the end of the period | 2.7 | 2.7 |
Provisions for Excess Inventory | ||
Changes in the restructuring reserves | ||
Balance at the beginning of the period | 7.7 | |
Restructuring charges | 5.4 | |
Cash payments | (1) | |
Other, non-cash adjustments and foreign currency effect | (1.9) | |
Balance at the end of the period | $ 10.2 | $ 10.2 |
Interest and Other Income (Ex61
Interest and Other Income (Expense), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Interest and Other Income (Expense), Net | ||||
Interest expense, net | $ (3) | $ (3.2) | $ (9.2) | $ (9.3) |
Exchange (losses) gains on foreign currency transactions | (2.1) | 0.5 | (5.4) | (1.1) |
Gain (loss) on disposal of product line | 8.7 | (0.2) | 9 | |
Other | 0.5 | (1.9) | 0.5 | (1.7) |
Interest and other income (expense), net | $ (4.6) | $ 4.1 | $ (14.3) | $ (3.1) |
Business Segment Information (D
Business Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Business segment information | |||||
Number of reporting segments | segment | 2 | ||||
Revenue: | |||||
Total revenue | $ 396.1 | $ 419.8 | $ 1,145.6 | $ 1,300.9 | |
Operating Income: | |||||
Total operating income | 28.2 | 4.9 | 75 | 60.9 | |
Assets: | |||||
Total assets | 1,842.9 | 1,842.9 | $ 1,864.8 | ||
Eliminations | |||||
Revenue: | |||||
Total revenue | (3.4) | (3.6) | (5.9) | (14.1) | |
Corporate, eliminations and other | |||||
Operating Income: | |||||
Total operating income | (0.1) | 0.2 | 0.7 | 1.3 | |
Assets: | |||||
Total assets | (63.5) | (63.5) | (64.1) | ||
BSI | Operating segments | |||||
Revenue: | |||||
Total revenue | 366.6 | 383.4 | 1,060.3 | 1,198.8 | |
Operating Income: | |||||
Total operating income | 25.8 | 0.8 | 68.2 | 48.5 | |
Assets: | |||||
Total assets | 1,821.2 | 1,821.2 | 1,827.7 | ||
BEST | Operating segments | |||||
Revenue: | |||||
Total revenue | 32.9 | 40 | 91.2 | 116.2 | |
Operating Income: | |||||
Total operating income | 2.5 | $ 3.9 | 6.1 | $ 11.1 | |
Assets: | |||||
Total assets | $ 85.2 | $ 85.2 | $ 101.2 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | Oct. 27, 2015 | |
Subsequent event | |||
Repatriation of foreign earnings to the United States | $ 235.3 | ||
Jordan Valley Semiconductors, LTD | Minimum | Expected | |||
Subsequent event | |||
Expected addition to Company revenues | $ 25 | ||
Jordan Valley Semiconductors, LTD | Maximum | Expected | |||
Subsequent event | |||
Expected addition to Company revenues | $ 30 | ||
2015 Credit Agreement | US Dollar revolving loans | |||
Subsequent event | |||
Maximum commitment | $ 500 |