Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | BRUKER CORP | |
Entity Central Index Key | 1,109,354 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
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 | 156,082,203 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 283.9 | $ 325 |
Short-term investments | 114.2 | |
Accounts receivable, net | 313.6 | 319.3 |
Inventories | 518 | 486.2 |
Other current assets | 125 | 114.1 |
Total current assets | 1,240.5 | 1,358.8 |
Property, plant and equipment, net | 270 | 266.5 |
Goodwill | 171.1 | 169.8 |
Intangibles, net and other long-term assets | 148.9 | 153.4 |
Total assets | 1,830.5 | 1,948.5 |
Current liabilities: | ||
Current portion of long-term debt | 15 | |
Accounts payable | 104.7 | 90.8 |
Customer advances | 125.3 | 111.7 |
Other current liabilities | 313.7 | 322 |
Total current liabilities | 558.7 | 524.5 |
Long-term debt | 205.6 | 415.6 |
Other long-term liabilities | 275.9 | 274.9 |
Commitments and contingencies (Note 13) | ||
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, 172,098,728 and 171,875,076 shares issued and 156,079,898 and 155,865,977 shares outstanding at March 31, 2018 and December 31, 2017, respectively | 1.7 | 1.7 |
Treasury stock at cost, 16,018,830 and 16,009,099 shares at March 31, 2018 and December 31, 2017, respectively | (401.3) | (401.2) |
Accumulated other comprehensive income | 51.2 | 27 |
Other shareholders' equity | 1,129.9 | 1,097.9 |
Total shareholders' equity attributable to Bruker Corporation | 781.5 | 725.4 |
Noncontrolling interest in consolidated subsidiaries | 8.8 | 8.1 |
Total shareholders' equity | 790.3 | 733.5 |
Total liabilities and shareholders' equity | $ 1,830.5 | $ 1,948.5 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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 | 172,098,728 | 171,875,076 |
Common stock, shares outstanding | 156,079,898 | 155,865,977 |
Treasury stock, shares | 16,018,830 | 16,009,099 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | $ 431.7 | $ 384.9 |
Cost of revenue | 232.3 | 208.5 |
Gross profit | 199.4 | 176.4 |
Operating expenses: | ||
Selling, general and administrative | 110.3 | 98.1 |
Research and development | 43.2 | 37.6 |
Other charges, net | 7.8 | 3.1 |
Total operating expenses | 161.3 | 138.8 |
Operating income | 38.1 | 37.6 |
Interest and other income (expense), net | (2.3) | (6) |
Income before income taxes and noncontrolling interest in consolidated subsidiaries | 35.8 | 31.6 |
Income tax provision | 8.4 | 9.9 |
Consolidated net income | 27.4 | 21.7 |
Net income attributable to noncontrolling interest in consolidated subsidiaries | 0.4 | 0.1 |
Net income attributable to Bruker Corporation | $ 27 | $ 21.6 |
Net income per common share attributable to Bruker Corporation shareholders: | ||
Basic (in dollars per share) | $ 0.17 | $ 0.14 |
Diluted (in dollars per share) | $ 0.17 | $ 0.13 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 155.9 | 159.7 |
Diluted (in shares) | 157 | 160.5 |
Comprehensive income | $ 51.8 | $ 37.5 |
Less: Comprehensive income attributable to noncontrolling interests | 0.6 | 0.2 |
Comprehensive income attributable to Bruker Corporation | $ 51.2 | $ 37.3 |
Dividend declared per common share (in dollars per share) | $ 0.04 | $ 0.04 |
Product | ||
Revenue | $ 352.2 | $ 318.9 |
Cost of revenue | 185.6 | 172.7 |
Service | ||
Revenue | 77.7 | 63.3 |
Cost of revenue | 46.5 | 35.7 |
Other | ||
Revenue | 1.8 | 2.7 |
Cost of revenue | $ 0.2 | $ 0.1 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Consolidated net income | $ 27.4 | $ 21.7 |
Adjustments to reconcile consolidated net income to cash flows from operating activities: | ||
Depreciation and amortization | 15.8 | 15.1 |
Stock-based compensation expense | 2.5 | 2.6 |
Deferred income taxes | (7.1) | 0.4 |
Other non-cash expenses, net | 18.2 | 4.1 |
Changes in operating assets and liabilities, net of acquisitions and divestitures: | ||
Accounts receivable | 10 | 25.6 |
Inventories | (32) | (31.1) |
Accounts payable and accrued expenses | (13.7) | (2.7) |
Income taxes payable, net | (3.3) | (6.4) |
Deferred revenue | 5.9 | 0.9 |
Customer advances | 17.8 | (3.1) |
Other changes in operating assets and liabilities, net | 2.3 | 5.5 |
Net cash provided by operating activities | 43.8 | 32.6 |
Cash flows from investing activities: | ||
Purchase of short-term investments | (85.3) | |
Maturities of short-term investments | 117 | 58.7 |
Cash paid for acquisitions, net of cash acquired | (0.4) | (39.8) |
Purchases of property, plant and equipment | (8.5) | (11.5) |
Proceeds from sales of property, plant and equipment | 6.6 | |
Net cash provided by (used in) investing activities | 108.1 | (71.3) |
Cash flows from financing activities: | ||
Repayments of the Note Purchase Agreement | (20) | |
Repayments of revolving lines of credit | (195) | (40) |
Proceeds from revolving lines of credit | 33 | |
Repayment of other debt, net | (0.1) | (0.1) |
Proceeds from issuance of common stock, net | 2.6 | 1.2 |
Payment of dividends | (6.3) | (6.4) |
Net cash used in financing activities | (198.8) | (32.3) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 5.8 | 5.8 |
Net change in cash, cash equivalents and restricted cash | (41.1) | (65.2) |
Cash, cash equivalents and restricted cash at beginning of period | 328.9 | 345.9 |
Cash, cash equivalents and restricted cash at end of period | $ 287.8 | $ 280.7 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2018 | |
Description of Business | |
Description of Business | 1. Description of Business Bruker Corporation, together with its consolidated subsidiaries (“Bruker” or the “Company”), develops, manufactures and distributes high-performance scientific instruments and analytical and diagnostic solutions that enable its customers to explore life and materials at microscopic, molecular and cellular levels. Many of the Company’s products are used to detect, measure and visualize structural characteristics of chemical, biological and industrial material samples. The Company’s products address the rapidly evolving needs of a diverse array of customers in life science research, pharmaceuticals, biotechnology, applied markets, cell biology, clinical research, microbiology, in-vitro diagnostics, nanotechnology and materials science research. The Company has two reportable segments, Bruker Scientific Instruments (BSI) , which represented approximately 89.6% and 90.0% of the Company’s revenues during the three months ended March 31, 2018 and 2017, respectively; and Bruker Energy & Supercon Technologies (BEST) , which represented 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 reportable segment because each has similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments. Bruker BioSpin — The Bruker BioSpin Group designs, manufactures and distributes enabling life science tools based on magnetic resonance technology. The majority of the Bruker BioSpin Group’s revenues are generated by academic and government research customers. Other customers include pharmaceutical and biotechnology companies and nonprofit laboratories, as well as chemical, food and beverage, clinical and other industrial companies. Bruker CALID ( C hemicals, A pplied Markets, L ife Science, I n-Vitro Diagnostics, D etection) — The Bruker CALID Group designs, manufactures and distributes life science mass spectrometry and ion mobility spectrometry solutions, analytical and process analysis instruments and solutions based on infrared and Raman molecular spectroscopy technologies and radiological/nuclear detectors for Chemical, Biological, Radiological, Nuclear and Explosive (CBRNE) detection. Customers of the Bruker CALID Group include: academic institutions and medical schools; pharmaceutical, biotechnology and diagnostics companies; contract research organizations; nonprofit or for-profit forensics laboratories; agriculture, food and beverage safety laboratories; environmental and clinical microbiology laboratories; hospitals and government departments and agencies. Bruker Nano — The Bruker Nano Group designs, manufactures and distributes advanced X-ray instruments; atomic force microscopy instrumentation; advanced fluorescence optical microscopy instruments; analytical tools for electron microscopes and X-ray metrology; defect-detection equipment for semiconductor process control; handheld, portable and mobile X-ray fluorescence spectrometry instruments; and spark optical emission spectroscopy systems. Customers of the Bruker Nano Group include academic institutions, governmental customers, nanotechnology companies, semiconductor companies, raw material manufacturers, industrial companies, biotechnology and pharmaceutical companies and other businesses involved in materials analysis. The Company’s BEST reportable 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 intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements as of March 31, 2018 and December 31, 2017, and for the three months ended March 31, 2018 and 2017, 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 U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair statement 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. At March 31, 2018, 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, 2017, have not changed other than for revenue recognition as detailed in Footnote 2. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | |
Revenue | 2. Revenue In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements under Accounting Standards Codification (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 U.S. 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. The new guidance was effective as of January 1, 2018 and was applied on a modified retrospective basis. The Company elected the practical expedient and only evaluated contracts for which substantially all revenue had not been recognized under ASC 605 with the cumulative effect of the new guidance recorded as of the date of initial application. The impact of adoption was an increase to beginning retained earnings of $8.2 million, offset in part by a $2.1 million impact related to taxes. As the adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements, transitional disclosures were not provided. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers . The key elements of ASC 606 are: 1) identifying a contract with the customer; 2) identifying the performance obligations in the contract; 3) determining the transaction price; 4) allocating the transaction price to the performance obligations in the contract; and 5) recognizing revenue when (or as) each performance obligation is satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of the Company’s contracts have multiple performance obligations, most commonly due to providing additional goods or services along with a system such as installation, accessories, parts and services. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service being provided to the customer. The Company’s best evidence of standalone selling price is its normal selling pricing and discounting practices for the specific product or service when sold on a standalone basis. Alternatively, when not sold separately, the Company may determine standalone selling price using an expected cost plus a margin approach. The Company’s performance obligations are typically satisfied at a point in time, most commonly either on shipment or customer acceptance. Certain performance obligations, such as maintenance contracts and extended warranty, are recognized over time based on the contractual obligation period. In addition, certain arrangements to provide more customized deliverables may be satisfied over time based on the extent of progress towards completion. Typically, progress is measured using a cost-to-cost method based on cost incurred to date relative to total estimated costs upon completion as this best depicts the transfer of control to the customer. Application of the cost-to-cost method requires the Company to make reasonable estimates of the extent of progress toward completion and the total costs the Company expects to incur. Losses are recorded immediately when we estimate that contracts will ultimately result in a loss. The Company includes costs incurred in connection with shipping and handling of products within selling, general and administrative costs. Amounts billed to customers in connection with these costs are included in total revenues. When control of the goods transfers prior to the completion of the Company’s obligation to ship the products to its customers, the Company has elected the practical expedient to account for the shipping services as a fulfillment cost. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period is one year or less or the amount is immaterial. The Company excludes from the transaction price all taxes assessed by a governmental authority on revenue-producing transactions that are collected by the Company from a customer. The Company has historically required an advance deposit based the terms and conditions of contracts with customers for many its contracts. Typically, revenue is recognized within one year of receiving an advance deposit. The Company does not have any material payment terms that extend beyond one year. For contracts where an advance payment is received greater than one year from expected revenue recognition, or a portion of the payment due extends beyond one year, the Company determined it does not constitute a significant financing component. There is minimal variable consideration included in the transaction price of the Company’s contracts. The Company’s revenues and cash flows may be adversely impacted by unfavorable changes in economic or political conditions in the countries and markets in which they operate, including, among others, adverse changes in interest rates or tax rates, volatility in financial and commodity markets, contraction in the availability of credit in the marketplace, and changes in capital spending patterns. Economic factors that could adversely influence demand for the Company’s products include uncertainty about global economic conditions leading to reduced levels of investment, changes in government spending levels and/or priorities, the size and availability of government budgets, customers’ and suppliers’ access to credit and other macroeconomic factors affecting government, academic or industrial spending behavior. Slower economic growth or deterioration in economic conditions could result in a decrease in government funding for scientific research, a delay in orders from current or potential customers or a reduction in purchases of our products. The Company cannot predict how changes in economic conditions or political instability will affect customers and suppliers or how any negative impact on customers and suppliers might adversely impact the Company’s business results or financial condition. The following table presents the Company’s revenues by Group and end customer geographical location for the three month period ended March 31, 2018 (in millions): Three Months 2018 Revenue by Group: Bruker BioSpin $ Bruker CALID Bruker Nano BEST Eliminations ) Total revenue $ Three Months 2018 Revenue by End Customer Geography: United States $ Germany Rest of Europe Asia Pacific Other Total revenue $ Revenue for the Company recognized at a point in time versus over time are as follows for the three month period ended March 31, 2018 (in millions): Three Months 2018 Revenue recognized at a point in time $ Revenue recognized over time Total revenue $ Remaining Performance Obligations Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. As of March 31, 2018, remaining performance obligations were approximately $1,012.7 million. The Company expects to recognize revenue on approximately 75.9% of the remaining performance obligations over the next twelve months and the remaining performance obligations primarily within one to three years. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue, customer deposits and billings in excess of revenue recognized (contract liabilities) on the Company’s unaudited condensed consolidated balance sheets. Contract assets— Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. Billing often occurs subsequent to revenue recognition, resulting in contract assets. Contract assets are generally classified as current assets in the unaudited condensed consolidated balance sheets. The balance of contract assets as of March 31, 2018 and January 1, 2018, the date of adoption of ASC 606, was $22.2 million and $12.8 million, respectively. The increase in the contract asset balance during the three month period ended March 31, 2018 is primarily a result of foreign currency translation and contracts which have been recognized as revenue during the three month period ending March 31, 2018 for which billing cannot contractually occur as of March 31, 2018. Contract liabilities— The Company often receives cash payments from customers in advance of the Company’s performance, resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the unaudited condensed consolidated balance sheet based on the timing of when revenue recognition is expected. As of March 31, 2018 and January 1, 2018, the date of adoption of ASC 606, contract liabilities were $311.6 million and $291.3 million, respectively. The increase in the contract liability balance during the three month period ended March 31, 2018 is primarily a result of cash payments received in advance of satisfying performance obligations and foreign currency translation, offset by revenue recognized during the period that was included in the contract liability balance at the date of adoption. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2018 | |
Acquisitions | |
Acquisitions | 3. Acquisitions There were no material acquisitions completed in the three months ended March 31, 2018. On January 23, 2017, the Company acquired 100% of the shares of Hysitron, Incorporated (“Hysitron”). The acquisition adds Hysitron’s nanomechanical testing instruments to the Company’s existing portfolio of atomic force microscopes, surface profilometers, and tribology and mechanical testing systems. Hysitron is included in the Bruker Nano Group within the BSI reportable segment. The acquisition of Hysitron was accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition of Hysitron were as follows (in millions): Consideration Transferred: Cash paid $ Cash acquired ) Contingent consideration Total consideration transferred $ Allocation of Consideration Transferred: Accounts receivable, net $ Inventories Other current assets Property, plant and equipment Intangible assets: Customer relationships Existing technology Trade name Other Goodwill Deferred taxes, net ) Capital lease ) Liabilities assumed ) Total consideration transferred $ The fair value allocation included contingent consideration in the amount of $1.6 million, which represented the estimated fair value of future payments to the former shareholders of Hysitron based on achieving annual revenue targets for the years 2017 through 2018. The Company completed the fair value allocation in the second quarter of 2017. The maximum potential future payments related to the contingent consideration is $10 million. The amortization period for intangible assets acquired in connection with Hysitron is 7 years for customer relationships, trademarks and other intangibles and 5 years for existing technology. The results of Hysitron, including the amount allocated to goodwill that is attributable to expected synergies and not expected to be deductible for tax purposes, have been included in the BSI Segment from the date of acquisition. Pro forma financial information reflecting the acquisition of Hysitron has not been presented because the impact on revenues, net income and total assets is not material. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | 4. Stock-Based Compensation On May 14, 2010, the Bruker Corporation 2010 Incentive Compensation Plan (the “2010 Plan”) was approved by the Company’s stockholders. The 2010 Plan provided for the issuance of up to 8,000,000 shares of the Company’s common stock. The 2010 Plan allowed a committee of the Board of Directors (the “Compensation Committee”) to grant incentive stock options, non-qualified stock options and restricted stock awards. The Compensation Committee had the authority to determine which employees would receive the awards, the amount of the awards and other terms and conditions of any awards. Awards granted under the 2010 Plan typically were made subject to a vesting period of three to five years. On May 20, 2016, the Bruker Corporation 2016 Incentive Compensation Plan (the “2016 Plan”) was approved by the Company’s stockholders. With the approval of the 2016 Plan, no further grants will be made under the 2010 Plan. The 2016 Plan provides for the issuance of up to 9,500,000 shares of the Company’s common stock and permits the grant of awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance shares and performance units, as well as cash-based awards. The 2016 Plan is administered by the Compensation Committee of the Board of Directors. The Compensation Committee has the authority to determine which employees will receive awards, the amount of any awards, and other terms and conditions of such awards. Awards granted under the 2016 Plan typically vest over a period of one to four years. The Company recorded stock-based compensation expense as follows in the unaudited condensed consolidated statements of income and comprehensive income (in millions): Three Months Ended March 31, 2018 2017 Stock options $ $ Restricted stock awards Restricted stock units Total stock-based compensation $ $ Three Months Ended March 31, 2018 2017 Costs of product revenue $ $ Selling, general and administrative Research and development Total stock-based compensation $ $ Stock-based compensation expense is recognized on a straight-line basis over the underlying requisite service period 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 four years. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. There were no stock options awarded during the three months ended March 31, 2018. Assumptions for the three months ended March 31, 2017 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: 2017 Risk-free interest rates 2.02% - 2.09% Expected life 5.56 years Volatility 33.97% - 34.13% Expected dividend yield 0.67% - 0.74% Stock option activity for the three months ended March 31, 2018 was as follows: Shares Subject Weighted Weighted Aggregate Outstanding at December 31, 2017 $ Exercised ) Forfeited ) Outstanding at March 31, 2018 $ $ Exercisable at March 31, 2018 $ $ Exercisable and expected to vest at March 31, 2018 (a) $ $ (a) In addition to the options that are vested at March 31, 2018, 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 March 31, 2018. (b) The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of $29.92 on March 31, 2018 and the exercise price of the underlying stock options. The weighted average fair value of options granted was $7.40 per share during the three months ended March 31, 2017, with no corresponding amount in the current period. The total intrinsic value of options exercised was $2.8 million and $0.8 million for the three months ended March 31, 2018 and 2017, respectively. Restricted stock award activity for the three months ended March 31, 2018 was as follows: Shares Subject Weighted Outstanding at December 31, 2017 $ Vested ) Forfeited ) Outstanding at March 31, 2018 $ The total fair value of restricted stock vested was $0.1 million in each of the three months ended March 31, 2018 and 2017, respectively. Restricted stock unit activity for the three months ended March 31, 2018 was as follows: Shares Subject Weighted Outstanding at December 31, 2017 $ Granted Vested ) Forfeited ) Outstanding at March 31, 2018 $ The total fair value of restricted stock units vested was $1.5 million in the three months ended March 31, 2018, with no corresponding amount in the comparable period in 2017. At March 31, 2018, the Company expects to recognize pre-tax stock-based compensation expense of $6.5 million associated with outstanding stock option awards granted under the Company’s stock plans over the weighted average remaining service period of 2.05 years. The Company expects to recognize additional pre-tax stock-based compensation expense of $0.7 million associated with outstanding restricted stock awards granted under the Company’s stock plans over the weighted average remaining service period of 1.17 years. The Company also expects to recognize additional pre-tax stock-based compensation expense of $12.9 million associated with outstanding restricted stock units granted under the 2016 Plan over the weighted average remaining service period of 2.98 years. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share | |
Earnings Per Share | 5. 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 and net income per common share attributable to Bruker Corporation shareholders (in millions, except per share amounts): Three Months Ended March 31, 2018 2017 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 awards and units Net income per common share attributable to Bruker Corporation shareholders: Basic $ $ Diluted $ $ Stock options to purchase approximately 0.2 million shares and 0.3 million shares were excluded from the computation of diluted earnings per share in the three months ended March 31, 2018 and 2017, respectively, as their effect would have been anti-dilutive. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 6. 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 March 31, 2018 and December 31, 2017 (in millions): March 31, 2018 Total Quoted Prices Significant Significant Assets: Embedded derivatives in purchase and delivery contracts $ $ — $ $ — Foreign exchange contracts — — Fixed price commodity contracts — — Total assets recorded at fair value $ $ — $ $ — Liabilities: Contingent consideration $ $ — $ — $ Foreign exchange contracts — — Embedded derivatives in purchase and delivery contracts — — Total liabilities recorded at fair value $ $ — $ $ December 31, 2017 Total Quoted Prices Significant Significant Assets: Foreign exchange contracts $ $ — $ $ — Embedded derivatives in purchase and delivery contracts — — Fixed price commodity contracts — — Total assets recorded at fair value $ $ — $ $ — Liabilities: Contingent consideration $ $ — $ — $ Foreign exchange contracts — — Embedded derivatives in purchase and delivery 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 forward foreign exchange contracts, commodity contracts, derivatives embedded in certain purchase and sale contracts, accounts receivable, borrowings under a revolving credit agreement, accounts payable, contingent consideration and long-term debt. The carrying amounts of the Company’s cash equivalents, short-term investments and restricted cash, accounts receivable, borrowings under a revolving credit agreement and accounts payable approximate fair value because of 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 $227.6 million and $231.3 million at March 31, 2018 and December 31, 2017, respectively, based on the outstanding amount at March 31, 2018 and December 31, 2017, market prices and observable sources with similar maturity dates. The Company measures certain assets and liabilities at fair value with changes in fair value recognized in earnings. 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 months ended March 31, 2018 or 2017. Excluded from the table above are cash equivalents, restricted cash and short-term investments related to time and call deposits. The Company has 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 95 days. The Company has classified these investments within cash and cash equivalents or short-term investments within the consolidated balance sheets based on call and maturity dates and these are not subject to fair value measurement. The following tables set forth the balances of cash equivalents, restricted cash and short-term investments as of March 31, 2018 and December 31, 2017: March 31, December 31, 2018 2017 Cash Equivalents $ — $ — Restricted Cash Short-term Investments — As part of certain acquisitions in 2017, 2016 and 2015, 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 and gross margin targets in certain years as specified in the purchase and sale agreements. The Company initially values the contingent considerations by using a Monte Carlo simulation or an income approach method. The Monte Carlo method models future revenue and costs of goods sold projections and discounts the average results to present value. The income approach method involves calculating the earnout payment based on the forecasted cash flows, adjusting the future earnout payment for the risk of reaching the projected financials, and then discounting the future payments to present value by the counterparty risk. The counterparty risk considers the risk of the buyer having the cash to make the earnout payments and is commensurate with a cost of debt over an appropriate term. For the three months ended March 31, 2018, additional contingent consideration of $0.6 million was recognized in earnings related to a recent acquisition within the Bruker Nano Group based upon an increase in forecasted revenue levels for the acquired business for the remainder of 2018 and was recorded within other charges, net in the unaudited condensed consolidated statements of income and comprehensive income. The following table sets forth the changes in contingent consideration liabilities for the three months ended March 31, 2018 (in millions): Balance at December 31, 2017 $ Current period adjustments Foreign currency effect Balance at March 31, 2018 $ |
Restricted Cash
Restricted Cash | 3 Months Ended |
Mar. 31, 2018 | |
Restricted Cash | |
Restricted Cash | 7. Restricted Cash Restricted cash is included as a component of cash, cash equivalents, and restricted cash on the Company’s unaudited condensed consolidated statement of cash flows. The Company has certain subsidiaries which are required by local governance to maintain restricted cash balances to cover future employee benefit payments. Restricted cash balances are classified as non-current unless, under the terms of the applicable agreements, the funds will be released from restrictions within one year from the balance sheet date. The current and non-current portion of restricted cash is recorded within other current assets and other long-term assets, respectively, in the accompanying consolidated balance sheets. The inclusion of restricted cash increased the balances of the unaudited condensed consolidated statement of cash flows as follows: Three Months Ended March 31, 2018 2017 Beginning Balance $ $ Ending Balance |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Inventories | 8. Inventories Inventories consisted of the following (in millions): March 31, December 31, 2018 2017 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 March 31, 2018 and December 31, 2017, the value of inventory-in-transit was $28.5 million and $41.4 million, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 9. Goodwill and Intangible Assets The following table sets forth the changes in the carrying amount of goodwill for the three months ended March 31, 2018 (in millions): Balance at December 31, 2017 $ Foreign currency effect Balance at March 31, 2018 $ The following is a summary of intangible assets (in millions): March 31, 2018 December 31, 2017 Gross Accumulated Net Carrying Gross Accumulated Net Carrying 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 the three months ended March 31, 2018 and 2017, the Company recorded amortization expense of $6.8 million and $6.9 million, respectively, related to intangible assets subject to amortization. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt | |
Debt | 10. Debt The Company’s debt obligations as of March 31, 2018 and December 31, 2017 consisted of the following (in millions): March 31, December 31, 2018 2017 US Dollar revolving loan under the 2015 Credit Agreement $ — $ US Dollar notes under the Note Purchase Agreement Unamortized debt issuance costs 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 $ $ On October 27, 2015, the Company entered into a new revolving credit agreement, referred to as the 2015 Credit Agreement. The 2015 Credit Agreement provides a maximum commitment on the Company’s revolving credit line of $500 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 (as defined in the 2015 Credit Agreement). 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. As of March 31, 2018, there were no outstanding borrowings under the 2015 Credit Agreement. The following is a summary of the maximum commitments and the net amounts available to the Company under the 2015 Credit Agreement and other lines of credit with various financial institutions located primarily in Germany and Switzerland that are unsecured and typically due upon demand with interest payable monthly, at March 31, 2018 (in millions): Weighted Total Amount Outstanding Outstanding Total Amount 2015 Credit Agreement % $ $ — $ $ Other lines of credit — — Total revolving lines of credit $ $ — $ $ 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 consisted 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. On January 18, 2017, the outstanding $20.0 million principal amount of Tranche A of the Senior Notes was repaid in accordance with the terms of the Note Purchase Agreement. 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 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 March 31, 2018, the Company was in compliance with the covenants of the Note Purchase Agreement and the 2015 Credit Agreement. The Company’s leverage ratio (as defined in the respective agreements) was 0.69 and interest coverage ratio (as defined in the respective agreements) was 15.8. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | 11. 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 2015 Credit Agreement, which did not have an outstanding balance as of March 31, 2018. The Company currently has fixed 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 and Switzerland, 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 currency contracts in order to minimize the volatility that fluctuations in currency translation 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 consolidated statements of income and comprehensive income. The Company had the following notional amounts outstanding under foreign exchange contracts at March 31, 2018 and December 31, 2017 (in millions): Buy Notional Sell Maturity Notional Fair Value of Fair Value of March 31, 2018: Euro U.S. Dollars April 2018 to $ $ $ — U.S. Dollars Euro April 2018 — — Swiss Francs U.S. Dollars April 2018 — — Swiss Francs Japanese Yen April 2018 — U.S. Dollars Japanese Yen April 2018 — — Japanese Yen U.S. Dollars April 2018 — — Euro Polish Zloty April 2018 — — Polish Zloty Euro April 2018 — — Singapore Dollar U.S. Dollars April 2018 — — $ $ $ December 31, 2017: Euro U.S. Dollars January 2018 $ $ $ — Swiss Francs U.S. Dollars January 2018 — — Singapore Dollar U.S. Dollars January 2018 — — Euro Polish Zloty January 2018 — $ $ $ 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 separately valuing the “embedded derivative” component of these contracts. The contracts, denominated in currencies other than the functional currency of the transacting parties, amounted to $92.3 million for the delivery of products and $3.7 million for the purchase of products at March 31, 2018 and $98.3 million for the delivery of products and $3.6 million for the purchase of products at December 31, 2017. The changes in the fair value of these embedded derivatives are recorded in interest and other income (expense), net in the consolidated statements of income and comprehensive income. Commodity Price Risk Management The Company has arrangements with certain customers under which it has a firm commitment to deliver copper based superconductor wire 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 commodities, the Company enters into commodity hedge contracts. At March 31, 2018 and December 31, 2017, the Company had fixed price commodity contracts with notional amounts aggregating $4.0 million and $3.0 million, respectively. The changes in the fair value of these commodity contracts are recorded within interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income. The fair value of the derivative instruments described above is recorded in the unaudited condensed consolidated balance sheets for the periods as follows (in millions): March 31, December 31, Balance Sheet Location 2018 2017 Derivative assets: Foreign exchange contracts Other current assets $ $ Embedded derivatives in purchase and delivery contracts Other current assets Fixed price commodity contracts Other current assets Derivative liabilities: Foreign exchange contracts Other current liabilities $ $ Embedded derivatives in purchase and delivery contracts Other current liabilities Embedded derivatives in purchase and delivery contracts Other long-term 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 March 31, 2018 2017 Foreign exchange contracts $ ) $ Embedded derivatives in purchase and delivery contracts ) Fixed price commodity contracts ) Net impact to interest and other income (expense) $ ) $ The amounts related to derivative instruments not designated as hedging instruments are recorded within interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income. |
Provision for Income Taxes
Provision for Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Provision for Income Taxes | |
Provision for Income Taxes | 12. Provision for Income Taxes On December 22, 2017 (Enactment Date), the President of the United States signed tax reform legislation (2017 Tax Act), which enacted a wide range of changes to the U.S. corporate income tax system, many of which differ significantly from the provisions of the previous U.S. tax law. Also on December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118, which provides companies with additional guidance on how to implement the provisions of the 2017 Tax Act in their financial statements. The guidance provides for a measurement period, up to one year from the Enactment Date, in which provisional amounts may be adjusted when additional information is obtained, prepared or analyzed about facts and circumstances that existed as of the Enactment Date, if known, which would have impacted the amounts that were initially recorded by the Company. The Company has not yet completed the assessment of the tax effects associated with the enactment of the 2017 Tax Act; however, a reasonable estimate has been made of the effects on the existing deferred tax balances and the one-time transition tax. Changes in the tax rates and laws are accounted for in the period of enactment. The Company expects to finalize the provisional estimates before the end of 2018 after completing the review and analysis, including reviews and analyses of any interpretations issued during this measurement period. The 2017 Tax Act also transitions international taxation from a worldwide system to a modified territorial system and includes base erosion prevention measures on non-U.S. earnings, which has the effect of subjecting certain earnings of the Company’s foreign subsidiaries to U.S. taxation as global intangible low-taxed income (GILTI). These changes became effective beginning in 2018. The Company does not recognize deferred taxes for basis differences expected to reverse as GILTI is incurred and instead accounts for any taxes assessed as period costs. The actual results of the implementation of the 2017 Tax Act may materially differ from the Company’s current estimate due to, among other things, further guidance that may be issued by U.S. tax authorities or regulatory bodies including the SEC and the FASB to interpret the 2017 Tax Act. The Company will continue to analyze the 2017 Tax Act and any additional guidance that may be issued and finalize the full effects of applying the new legislation in the measurement period. 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 March 31, 2018 and 2017 was $8.4 million and $9.9 million, respectively, representing effective tax rates of 23.5% and 31.3%, respectively. The decrease in the Company’s effective tax rate for the three months ended March 31, 2018, compared to the same periods in 2017, was primarily due to the non-recurring impact of unfavorable discrete items in the three month period ended March 31, 2017. 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 March 31, 2018 and December 31, 2017, the Company had unrecognized tax benefits, excluding penalties and interest, of approximately $4.5 million and $4.4 million, respectively, which, 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 March 31, 2018 and December 31, 2017, approximately $0.3 million and $0.2 million, respectively, of accrued interest and penalties related to uncertain tax positions was included in other long-term liabilities on the Company’s unaudited condensed consolidated balance sheets. No penalties and interest were recorded in the provision for income taxes for unrecognized tax benefits during the three months ended March 31, 2018 or March 31, 2017. The Company files tax returns in the United States, which includes 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 majority of the Company’s earnings are derived in Germany and Switzerland. Accounting for the various federal and local taxing authorities, the statutory rates for 2018 are approximately 30.0% and 20.0% for Germany and Switzerland, respectively. The mix of earnings in those two jurisdictions resulted in an increase of 4.0% from the U.S. statutory rate of 21.0% in the three months ended March 31, 2018. The Company has not been a party to any tax holiday agreements. The tax years 2013 to 2017 are open to examination in Germany and Switzerland. Tax years 2011 to 2017 remain open for examination in the United States. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies In accordance with ASC Topic 450, Contingencies, the Company accrues anticipated costs of settlement, damages or other costs to the extent specific losses are probable and estimable. Litigation and Related Contingencies Lawsuits, claims and proceedings of a nature considered normal to its businesses may be pending from time to time against the Company. Third parties might allege that the Company or its collaborators are infringing their patent rights or that the Company is otherwise violating their intellectual property rights. Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated or a range of loss can be determined. These accruals represent management’s best estimate of probable loss. Disclosure also is provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. The Company believes the outcome of pending proceedings, individually and in the aggregate, will not have a material impact on the Company’s financial statements. As of March 31, 2018 and December 31, 2017, no material accruals have been recorded for potential contingencies. Governmental Investigations The Company is subject from time to time to investigations by U.S. or foreign governmental agencies, from which civil, criminal or administrative proceedings could result. On October 19, 2017, the Company received a notice of investigation and subpoena to produce documents from the Division of Enforcement of the SEC. The subpoena seeks information related to an employee terminated as part of a restructuring and certain matters involving the Company’s policies and accounting practices related to revenue recognition and restructuring activities, as well as related financial reporting, disclosure and compliance matters, since January 1, 2013. The subpoena also seeks information concerning, among other things, the Company’s previously identified material weakness in internal controls over the accounting for income taxes, related financial reporting matters and certain payments for non-employee travel expenses. The Company is producing documents in response to the subpoena and intends to continue to cooperate fully with the SEC’s investigation. At this time, the Company is unable to predict the duration, scope or outcome of this investigation. Letters of Credit and Guarantees At March 31, 2018 and December 31, 2017, the Company had bank guarantees of $138.8 million, related primarily to 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. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Shareholders' Equity | |
Shareholders' Equity | 14. Shareholders’ Equity Share Repurchase Program In May 2017, the Company’s Board of Directors approved a share repurchase program under which repurchases of common stock up to $225.0 million may occur from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations. No repurchases occurred in the three months ended March 31, 2018. Any future repurchases will be funded from cash on hand, future cash flows from operations and available borrowings under the revolving credit facility. Cash Dividends on Shares of Common Stock On February 22, 2016, the Company announced the establishment of a dividend policy and the declaration by its Board of Directors of an initial quarterly cash dividend in the amount of $0.04 per share of the Company’s issued and outstanding common stock. Under the dividend policy, the Company will target a cash dividend to the Company’s shareholders in the amount of $0.16 per share per annum, payable in equal quarterly installments. Dividends were paid on March 23, 2018 to shareholders of record as of March 6, 2018 an aggregate cost of $6.3 million. Subsequent dividend declarations and the establishment of record and payment dates for such future dividend payments, if any, are subject to the Board of Directors’ continuing determination that the dividend policy is in the best interests of the Company’s shareholders. The dividend policy may be suspended or cancelled at the discretion of the Board of Directors at any time. Accumulated Other Comprehensive Income Comprehensive income refers to revenues, expenses, gains and losses that under U.S. GAAP are included in other comprehensive income, 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 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 (in millions): Three Months Ended March 31, 2018 2017 Consolidated net income $ $ Foreign currency translation adjustments Pension liability adjustments, net of tax ) Net comprehensive income Less: Comprehensive income attributable to noncontrolling interests Comprehensive income attributable to Bruker Corporation $ $ The following is a summary of the components of accumulated other comprehensive income (loss), net of tax, at March 31, 2018 (in millions): Foreign Pension Accumulated Balance at December 31, 2017 $ $ ) $ Other comprehensive income (loss) before reclassifications ) Amounts reclassified from other comprehensive income (loss), net of tax of $0.0 million — Net current period other comprehensive income ) Balance at March 31, 2018 $ $ ) $ |
Noncontrolling Interests
Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2018 | |
Noncontrolling Interests | |
Noncontrolling Interests | 15. 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 March 31, 2018 2017 Balance at beginning of period $ $ Net income Foreign currency translation adjustments Impact of ASC 606 adoption — Balance at end of period $ $ |
Other Charges, Net
Other Charges, Net | 3 Months Ended |
Mar. 31, 2018 | |
Other Charges, Net | |
Other Charges, Net | 16. Other Charges, Net The components of other charges, net were as follows (in millions): Three Months Ended March 31, 2018 2017 Information technology transformation costs $ $ Restructuring charges Acquisition-related charges Other — Other charges, net $ $ Restructuring Initiatives Restructuring charges for the three month period ended March 31, 2018 included charges for various programs which were recorded in the accompanying unaudited condensed consolidated statements of income and comprehensive income. The charges for the three month period ended March 31, 2017 related primarily to the previously reported and completed 2016 and 2015 restructuring plans. Three Months Ended March 31, 2018 2017 Cost of revenues $ $ ) Other charges, net $ $ The following table sets forth the changes in restructuring reserves for the three months ended March 31, 2018 (in millions): Total Severance Exit Costs Provisions Balance at December 31, 2017 $ $ $ $ Restructuring charges — Cash payments ) ) ) — Other, non-cash adjustments and foreign currency effect ) ) ) Balance at March 31, 2018 $ $ $ $ |
Interest and Other Income (Expe
Interest and Other Income (Expense), Net | 3 Months Ended |
Mar. 31, 2018 | |
Interest and Other Income (Expense), Net | |
Interest and Other Income (Expense), Net | 17. Interest and Other Income (Expense), Net The components of interest and other income (expense), net, were as follows (in millions): Three Months Ended March 31, 2018 2017 Interest expense, net $ ) $ ) Exchange gains (losses) on foreign currency transactions ) Other — Interest and other income (expense), net $ ) $ ) |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Business Segment Information | |
Business Segment Information | 18. Business Segment Information The Company has two reportable segments, BSI and BEST, as discussed in Note 1 to the unaudited condensed consolidated financial statements. Revenue and operating income by reportable segment are presented below (in millions): Three Months Ended March 31, 2018 2017 Revenue: BSI $ $ BEST Eliminations (a) ) ) Total revenue $ $ Operating Income (loss) 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 reportable segment are as follows (in millions): March 31, December 31, 2018 2017 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 | 3 Months Ended |
Mar. 31, 2018 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | 19. Recent Accounting Pronouncements In March 2017, the FASB issued ASU No. 2017-07, Compensation- Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . This new standard intends to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new standard requires the service cost component of net periodic cost be reported in the same line item(s) as other employee compensation costs and all other components of the net periodic cost be reported in the condensed consolidated statements of income and comprehensive income below operating income. The Company adopted this guidance on January 1, 2018 and the adoption did not have a material impact on the condensed consolidated statements of income and comprehensive income as of March 31, 2018 or 2017. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new standard simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. This ASU will be applied prospectively and is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact on our financial position, results of operations or statements of cash flows upon adoption. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard was adopted as of the effective date of January 1, 2018. We have evaluated the provisions of this standard and have determined that the impact of adoption of ASU No. 2017-01 was not material to our consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740)—Intra-Entity Transfer of Assets Other than Inventory . The new standard requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (excluding inventory) when the transfer occurs. This is a change from existing U.S. GAAP which prohibits recognition of current and deferred income taxes until the asset is sold to a third party. This new standard was adopted as of the effective date of January 1, 2018. We have evaluated the provisions of this standard and have determined that the impact of adoption of ASU No. 2016-16 was not material to our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard provides guidance on the recognition, measurement, presentation and disclosure of leases. The new standard supersedes present U.S. GAAP guidance on leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease liabilities, as well as additional disclosures. The new standard is effective as of January 1, 2019, and early adoption is permitted. The Company currently expects to adopt the new standard as of January 1, 2019. The Company is continuing to evaluate the provisions of the new standard, but currently expects that it will have a material impact on its consolidated balance sheet due to the recognition of right-of-use assets and lease liabilities for substantially all leases currently accounted for as operating leases. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Event | |
Subsequent Event | 20. Subsequent Event On April 8, 2018, Bruker acquired 100% interest in Anasys Instruments Corp., a privately held Company that develops and manufactures nanoscale infrared spectroscopy and thermal measurement instruments. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | |
Schedule of revenues disaggregated by Group, end customer geographical location and timing of recognition | The following table presents the Company’s revenues by Group and end customer geographical location for the three month period ended March 31, 2018 (in millions): Three Months 2018 Revenue by Group: Bruker BioSpin $ Bruker CALID Bruker Nano BEST Eliminations ) Total revenue $ Three Months 2018 Revenue by End Customer Geography: United States $ Germany Rest of Europe Asia Pacific Other Total revenue $ Revenue for the Company recognized at a point in time versus over time are as follows for the three month period ended March 31, 2018 (in millions): Three Months 2018 Revenue recognized at a point in time $ Revenue recognized over time Total revenue $ |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Hysitron, Incorporated | |
Acquisitions | |
Components and fair value allocation of the consideration transferred in connection with acquisitions | The components and fair value allocation of the consideration transferred in connection with the acquisition of Hysitron were as follows (in millions): Consideration Transferred: Cash paid $ Cash acquired ) Contingent consideration Total consideration transferred $ Allocation of Consideration Transferred: Accounts receivable, net $ Inventories Other current assets Property, plant and equipment Intangible assets: Customer relationships Existing technology Trade name Other Goodwill Deferred taxes, net ) Capital lease ) Liabilities assumed ) Total consideration transferred $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation | |
Stock-based compensation expense, by award | The Company recorded stock-based compensation expense as follows in the unaudited condensed consolidated statements of income and comprehensive income (in millions): Three Months Ended March 31, 2018 2017 Stock options $ $ Restricted stock awards Restricted stock units Total stock-based compensation $ $ |
Stock-based compensation expense, cost allocation | The Company recorded stock-based compensation expense as follows in the unaudited condensed consolidated statements of income and comprehensive income (in millions): Three Months Ended March 31, 2018 2017 Costs of product revenue $ $ Selling, general and administrative Research and development Total stock-based compensation $ $ |
Assumptions regarding volatility, expected life, dividend yield and risk-free interest rates | Assumptions for the three months ended March 31, 2017 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: 2017 Risk-free interest rates 2.02% - 2.09% Expected life 5.56 years Volatility 33.97% - 34.13% Expected dividend yield 0.67% - 0.74% |
Schedule of stock option activity | Stock option activity for the three months ended March 31, 2018 was as follows: Shares Subject Weighted Weighted Aggregate Outstanding at December 31, 2017 $ Exercised ) Forfeited ) Outstanding at March 31, 2018 $ $ Exercisable at March 31, 2018 $ $ Exercisable and expected to vest at March 31, 2018 (a) $ $ (a) In addition to the options that are vested at March 31, 2018, 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 March 31, 2018. (b) The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of $29.92 on March 31, 2018 and the exercise price of the underlying stock options. |
Restricted stock awards | |
Stock-Based Compensation | |
Schedule of restricted stock award and restricted stock unit activity | Restricted stock award activity for the three months ended March 31, 2018 was as follows: Shares Subject Weighted Outstanding at December 31, 2017 $ Vested ) Forfeited ) Outstanding at March 31, 2018 $ |
Restricted stock units | |
Stock-Based Compensation | |
Schedule of restricted stock award and restricted stock unit activity | Restricted stock unit activity for the three months ended March 31, 2018 was as follows: Shares Subject Weighted Outstanding at December 31, 2017 $ Granted Vested ) Forfeited ) Outstanding at March 31, 2018 $ |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share | |
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 and net income per common share attributable to Bruker Corporation shareholders (in millions, except per share amounts): Three Months Ended March 31, 2018 2017 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 awards and units Net income per common share attributable to Bruker Corporation shareholders: Basic $ $ Diluted $ $ |
Fair Value of Financial Instr30
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 and December 31, 2017 (in millions): March 31, 2018 Total Quoted Prices Significant Significant Assets: Embedded derivatives in purchase and delivery contracts $ $ — $ $ — Foreign exchange contracts — — Fixed price commodity contracts — — Total assets recorded at fair value $ $ — $ $ — Liabilities: Contingent consideration $ $ — $ — $ Foreign exchange contracts — — Embedded derivatives in purchase and delivery contracts — — Total liabilities recorded at fair value $ $ — $ $ December 31, 2017 Total Quoted Prices Significant Significant Assets: Foreign exchange contracts $ $ — $ $ — Embedded derivatives in purchase and delivery contracts — — Fixed price commodity contracts — — Total assets recorded at fair value $ $ — $ $ — Liabilities: Contingent consideration $ $ — $ — $ Foreign exchange contracts — — Embedded derivatives in purchase and delivery contracts — — Total liabilities recorded at fair value $ $ — $ $ |
Schedule of balances of cash equivalents, restricted cash and short-term investments | The following tables set forth the balances of cash equivalents, restricted cash and short-term investments as of March 31, 2018 and December 31, 2017: March 31, December 31, 2018 2017 Cash Equivalents $ — $ — Restricted Cash Short-term Investments — |
Schedule of changes in contingent consideration liabilities | The following table sets forth the changes in contingent consideration liabilities for the three months ended March 31, 2018 (in millions): Balance at December 31, 2017 $ Current period adjustments Foreign currency effect Balance at March 31, 2018 $ |
Restricted Cash (Tables)
Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restricted Cash | |
Schedule of increase in cash flow statement balances due to inclusion of restricted cash | The inclusion of restricted cash increased the balances of the unaudited condensed consolidated statement of cash flows as follows: Three Months Ended March 31, 2018 2017 Beginning Balance $ $ Ending Balance |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Schedule of inventories | Inventories consisted of the following (in millions): March 31, December 31, 2018 2017 Raw materials $ $ Work-in-process Finished goods Demonstration units Inventories $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and 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 three months ended March 31, 2018 (in millions): Balance at December 31, 2017 $ Foreign currency effect Balance at March 31, 2018 $ |
Summary of intangible assets - subject to amortization | The following is a summary of intangible assets (in millions): March 31, 2018 December 31, 2017 Gross Accumulated Net Carrying Gross Accumulated Net Carrying Existing technology and related patents $ $ ) $ $ $ ) $ Customer relationships ) ) Non compete contracts ) ) Trade names ) ) Intangible assets subject to amortization ) ) In-process research and development — — Intangible assets $ $ ) $ $ $ ) $ |
Summary of intangible assets - in-process research and development | The following is a summary of intangible assets (in millions): March 31, 2018 December 31, 2017 Gross Accumulated Net Carrying Gross Accumulated Net Carrying 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) | 3 Months Ended |
Mar. 31, 2018 | |
Debt | |
Components of debt obligations | The Company’s debt obligations as of March 31, 2018 and December 31, 2017 consisted of the following (in millions): March 31, December 31, 2018 2017 US Dollar revolving loan under the 2015 Credit Agreement $ — $ US Dollar notes under the Note Purchase Agreement Unamortized debt issuance costs 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 the 2015 Credit Agreement and other lines of credit | The following is a summary of the maximum commitments and the net amounts available to the Company under the 2015 Credit Agreement and other lines of credit with various financial institutions located primarily in Germany and Switzerland that are unsecured and typically due upon demand with interest payable monthly, at March 31, 2018 (in millions): Weighted Total Amount Outstanding Outstanding Total Amount 2015 Credit Agreement % $ $ — $ $ Other lines of credit — — Total revolving lines of credit $ $ — $ $ |
Derivative Instruments and He35
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 and December 31, 2017 (in millions): Buy Notional Sell Maturity Notional Fair Value of Fair Value of March 31, 2018: Euro U.S. Dollars April 2018 to $ $ $ — U.S. Dollars Euro April 2018 — — Swiss Francs U.S. Dollars April 2018 — — Swiss Francs Japanese Yen April 2018 — U.S. Dollars Japanese Yen April 2018 — — Japanese Yen U.S. Dollars April 2018 — — Euro Polish Zloty April 2018 — — Polish Zloty Euro April 2018 — — Singapore Dollar U.S. Dollars April 2018 — — $ $ $ December 31, 2017: Euro U.S. Dollars January 2018 $ $ $ — Swiss Francs U.S. Dollars January 2018 — — Singapore Dollar U.S. Dollars January 2018 — — Euro Polish Zloty January 2018 — $ $ $ |
Schedule of fair value and balance sheet location of derivative instruments | The fair value of the derivative instruments described above is recorded in the unaudited condensed consolidated balance sheets for the periods as follows (in millions): March 31, December 31, Balance Sheet Location 2018 2017 Derivative assets: Foreign exchange contracts Other current assets $ $ Embedded derivatives in purchase and delivery contracts Other current assets Fixed price commodity contracts Other current assets Derivative liabilities: Foreign exchange contracts Other current liabilities $ $ Embedded derivatives in purchase and delivery contracts Other current liabilities Embedded derivatives in purchase and delivery contracts Other long-term liabilities |
Schedule of impact on net income of unrealized gains and losses resulting from changes in the fair value of derivative 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 March 31, 2018 2017 Foreign exchange contracts $ ) $ Embedded derivatives in purchase and delivery contracts ) Fixed price commodity contracts ) Net impact to interest and other income (expense) $ ) $ |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Shareholders' Equity | |
Summary of comprehensive income | The following is a summary of comprehensive income (in millions): Three Months Ended March 31, 2018 2017 Consolidated net income $ $ Foreign currency translation adjustments Pension liability adjustments, net of tax ) Net comprehensive income Less: Comprehensive income attributable to noncontrolling interests Comprehensive income 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 March 31, 2018 (in millions): Foreign Pension Accumulated Balance at December 31, 2017 $ $ ) $ Other comprehensive income (loss) before reclassifications ) Amounts reclassified from other comprehensive income (loss), net of tax of $0.0 million — Net current period other comprehensive income ) Balance at March 31, 2018 $ $ ) $ |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Noncontrolling Interests | |
Schedule of changes in noncontrolling interests | The following table sets forth the changes in noncontrolling interests (in millions): Three Months Ended March 31, 2018 2017 Balance at beginning of period $ $ Net income Foreign currency translation adjustments Impact of ASC 606 adoption — Balance at end of period $ $ |
Other Charges, Net (Tables)
Other Charges, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Charges, Net | |
Components of other charges, net | The components of other charges, net were as follows (in millions): Three Months Ended March 31, 2018 2017 Information technology transformation costs $ $ Restructuring charges Acquisition-related charges Other — Other charges, net $ $ |
Summary of restructuring expenses | The charges for the three month period ended March 31, 2017 related primarily to the previously reported and completed 2016 and 2015 restructuring plans. Three Months Ended March 31, 2018 2017 Cost of revenues $ $ ) Other charges, net $ $ |
Schedule of changes in the restructuring reserves | The following table sets forth the changes in restructuring reserves for the three months ended March 31, 2018 (in millions): Total Severance Exit Costs Provisions Balance at December 31, 2017 $ $ $ $ Restructuring charges — Cash payments ) ) ) — Other, non-cash adjustments and foreign currency effect ) ) ) Balance at March 31, 2018 $ $ $ $ |
Interest and Other Income (Ex39
Interest and Other Income (Expense), Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 2017 Interest expense, net $ ) $ ) Exchange gains (losses) on foreign currency transactions ) Other — Interest and other income (expense), net $ ) $ ) |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Segment Information | |
Schedule of revenue, operating income and total assets by reportable segment | Revenue and operating income by reportable segment are presented below (in millions): Three Months Ended March 31, 2018 2017 Revenue: BSI $ $ BEST Eliminations (a) ) ) Total revenue $ $ Operating Income (loss) 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 reportable segment are as follows (in millions): March 31, December 31, 2018 2017 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) - segment | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Description of Business | ||
Number of reportable segments | 2 | |
BSI | ||
Description of Business | ||
Segment revenue (as a percent) | 89.60% | 90.00% |
Number of operating segments | 3 |
Revenue - Impact of ASU Adoptio
Revenue - Impact of ASU Adoption (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Impact of ASU adoption | ||
Income tax expense (benefit) | $ 8.4 | $ 9.9 |
Practical expedient, incremental costs of obtaining a contract | true | |
ASU No. 2014-09 | Adjustments | ||
Impact of ASU adoption | ||
Retained earnings | $ 8.2 | |
Income tax expense (benefit) | $ (2.1) |
Revenue - Disaggregation (Detai
Revenue - Disaggregation (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | $ 431.7 |
Revenue recognized at a point in time | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 395.2 |
Revenue recognized over time | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 36.5 |
United States | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 104.8 |
Germany | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 41.5 |
Rest of Europe | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 119.9 |
Asia Pacific | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 126.9 |
Other | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 38.6 |
Operating segments | BSI | Bruker BioSpin | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 131.8 |
Operating segments | BSI | Bruker CALID | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 131.3 |
Operating segments | BSI | Bruker Nano | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 123.9 |
Operating segments | BEST | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | 45.6 |
Eliminations | |
Revenues disaggregated by Group and end customer geographical location | |
Revenue | $ (0.9) |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue | |
Amount of remaining performance obligations | $ 1,012.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Remaining Performance Obligations | |
Remaining performance obligation expected to be recognized in the given period (as a percent) | 75.90% |
Duration of expected recognition period for remaining performance obligation | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | Minimum | |
Remaining Performance Obligations | |
Duration of expected recognition period for remaining performance obligation | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | Maximum | |
Remaining Performance Obligations | |
Duration of expected recognition period for remaining performance obligation | 3 years |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 |
Revenue | ||
Contract assets | $ 22.2 | $ 12.8 |
Contract liabilities | $ 311.6 | $ 291.3 |
Acquisitions - Hysitron (Detail
Acquisitions - Hysitron (Details) - USD ($) $ in Millions | Jan. 23, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Allocation of Consideration Transferred: | |||
Goodwill | $ 171.1 | $ 169.8 | |
Hysitron, Incorporated | |||
Acquisitions | |||
Ownership percentage acquired | 100.00% | ||
Consideration Transferred: | |||
Cash paid | $ 27.9 | ||
Cash acquired | (0.7) | ||
Contingent consideration | 1.6 | ||
Total consideration transferred | 28.8 | ||
Allocation of Consideration Transferred: | |||
Accounts receivable, net | 3 | ||
Inventories | 3.8 | ||
Other current assets | 0.2 | ||
Property, plant and equipment | 0.6 | ||
Goodwill | 16.6 | ||
Deferred taxes, net | (4.1) | ||
Capital lease | (0.2) | ||
Liabilities assumed | (3.4) | ||
Total consideration transferred | 28.8 | ||
Maximum potential future payments related to the contingent consideration | 10 | ||
Customer relationships | Hysitron, Incorporated | |||
Allocation of Consideration Transferred: | |||
Intangible assets | $ 5.8 | ||
Amortization period for intangible assets acquired | 7 years | ||
Existing technology | Hysitron, Incorporated | |||
Allocation of Consideration Transferred: | |||
Intangible assets | $ 4.7 | ||
Amortization period for intangible assets acquired | 5 years | ||
Trade names | Hysitron, Incorporated | |||
Allocation of Consideration Transferred: | |||
Intangible assets | $ 1.2 | ||
Amortization period for intangible assets acquired | 7 years | ||
Other | Hysitron, Incorporated | |||
Allocation of Consideration Transferred: | |||
Property, plant and equipment | $ 0.6 | ||
Amortization period for intangible assets acquired | 7 years |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plan Information (Details) - shares | May 14, 2010 | Mar. 31, 2018 |
2010 Plan | ||
Stock-Based Compensation | ||
Common stock authorized for issuance (in shares) | 8,000,000 | 0 |
2010 Plan | Minimum | ||
Stock-Based Compensation | ||
Vesting period | 3 years | |
2010 Plan | Maximum | ||
Stock-Based Compensation | ||
Vesting period | 5 years | |
2016 Plan | ||
Stock-Based Compensation | ||
Common stock authorized for issuance (in shares) | 9,500,000 | |
2016 Plan | Minimum | ||
Stock-Based Compensation | ||
Vesting period | 1 year | |
2016 Plan | Maximum | ||
Stock-Based Compensation | ||
Vesting period | 4 years |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-Based Compensation | ||
Total stock-based compensation | $ 2.5 | $ 2.6 |
Costs of product revenue | ||
Stock-Based Compensation | ||
Total stock-based compensation | 0.4 | 0.4 |
Selling, general and administrative | ||
Stock-Based Compensation | ||
Total stock-based compensation | 1.7 | 1.8 |
Research and development | ||
Stock-Based Compensation | ||
Total stock-based compensation | 0.4 | 0.4 |
Stock options | ||
Stock-Based Compensation | ||
Total stock-based compensation | 1 | 1.7 |
Restricted stock awards | ||
Stock-Based Compensation | ||
Total stock-based compensation | 0.2 | 0.3 |
Restricted stock units | ||
Stock-Based Compensation | ||
Total stock-based compensation | $ 1.3 | $ 0.6 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions (Details) - Stock options - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-Based Compensation | ||
Awarded during the period (in shares) | 0 | |
Risk-free interest rates, minimum (as a percent) | 2.02% | |
Risk-free interest rates, maximum (as a percent) | 2.09% | |
Volatility, minimum (as a percent) | 33.97% | |
Volatility, maximum (as a percent) | 34.13% | |
Minimum | ||
Stock-Based Compensation | ||
Vesting period | 3 years | |
Expected dividend yield (as a percent) | 0.67% | |
Maximum | ||
Stock-Based Compensation | ||
Vesting period | 4 years | |
Expected life | 5 years 6 months 22 days | |
Expected dividend yield (as a percent) | 0.74% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock options, Shares Subject to Options | ||
Outstanding at the beginning of the period (in shares) | 3,235,673 | |
Exercised (in shares) | (180,890) | |
Forfeited (in shares) | (105,882) | |
Outstanding at the end of the period (in shares) | 2,948,901 | |
Exercisable at the end of the period (in shares) | 1,641,446 | |
Exercisable and expected to vest at the end of the period (in shares) | 2,798,092 | |
Stock options, Weighted Average Option Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 20.16 | |
Exercised (in dollars per share) | 14.87 | |
Forfeited (in dollars per share) | 20.48 | |
Outstanding at the end of the period (in dollars per share) | 20.47 | |
Exercisable at the end of the period (in dollars per share) | 18.97 | |
Exercisable and expected to vest at the end of the period (in dollars per share) | $ 20.36 | |
Stock options, additional information | ||
Weighted Average Remaining Contractual Term, Outstanding | 6 years 4 months 24 days | |
Weighted Average Remaining Contractual Term, Exercisable | 5 years 8 months 12 days | |
Weighted Average Remaining Contractual Term, Exercisable and expected to vest | 6 years 3 months 18 days | |
Aggregate Intrinsic Value, Outstanding | $ 27.9 | |
Aggregate Intrinsic Value, Exercisable | 18 | |
Aggregate Intrinsic Value, Exercisable and expected to vest | $ 26.8 | |
Fair value of the Company's common stock price (in dollars per share) | $ 29.92 | |
Weighted average fair values of options granted (in dollars per share) | $ 0 | $ 7.40 |
Intrinsic value of options exercised | $ 2.8 | $ 0.8 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Award and RSU Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Restricted stock awards | |||
Restricted stock, Shares Subject to Restriction | |||
Outstanding at the beginning of the period (in shares) | 85,529 | ||
Vested (in shares) | (3,276) | ||
Forfeited (in shares) | (6,553) | ||
Outstanding at the end of the period (in shares) | 75,700 | 85,529 | |
Restricted stock, Weighted Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 20.39 | ||
Vested (in dollars per share) | 24.80 | ||
Forfeited (in dollars per share) | 24.80 | ||
Outstanding at the end of the period (in dollars per share) | $ 19.82 | $ 20.39 | |
Additional share-based compensation disclosures | |||
Total fair value of shares vested | $ 0.1 | $ 0.1 | |
Restricted stock units | |||
Restricted stock, Shares Subject to Restriction | |||
Outstanding at the beginning of the period (in shares) | 652,123 | ||
Granted (in shares) | 50,180 | ||
Vested (in shares) | (43,052) | ||
Forfeited (in shares) | (27,095) | ||
Outstanding at the end of the period (in shares) | 632,156 | 652,123 | |
Restricted stock, Weighted Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 25.47 | ||
Granted (in dollars per share) | 35.58 | ||
Vested (in dollars per share) | 21.91 | ||
Forfeited (in dollars per share) | 26.75 | ||
Outstanding at the end of the period (in dollars per share) | $ 26.46 | $ 25.47 | |
Additional share-based compensation disclosures | |||
Total fair value of shares vested | $ 1.5 | $ 0 |
Stock-Based Compensation - Unre
Stock-Based Compensation - Unrecognized Compensation Expense (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Stock options | |
Stock-Based Compensation | |
Expected pre-tax stock-based compensation expense | $ 6.5 |
Weighted average remaining service period | 2 years 18 days |
Restricted stock awards | |
Stock-Based Compensation | |
Expected pre-tax stock-based compensation expense | $ 0.7 |
Weighted average remaining service period | 1 year 2 months 1 day |
Restricted stock units | |
Stock-Based Compensation | |
Expected pre-tax stock-based compensation expense | $ 12.9 |
Weighted average remaining service period | 2 years 11 months 23 days |
Earnings Per Share - Computatio
Earnings Per Share - Computation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share | ||
Net income attributable to Bruker Corporation, as reported -basic | $ 27 | $ 21.6 |
Weighted average shares outstanding: | ||
Weighted average shares outstanding-basic | 155.9 | 159.7 |
Effect of dilutive securities: | ||
Stock options and restricted stock awards and units (in shares) | 1.1 | 0.8 |
Weighted average shares outstanding-diluted | 157 | 160.5 |
Net income per common share attributable to Bruker Corporation shareholders: | ||
Basic (in dollars per share) | $ 0.17 | $ 0.14 |
Diluted (in dollars per share) | $ 0.17 | $ 0.13 |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Stock Options (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock options | ||
Anti-dilutive securities | ||
Number of shares excluded from the computation of diluted earnings per share | 0.2 | 0.3 |
Fair Value of Financial Instr55
Fair Value of Financial Instruments - Hierarchy (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Significant Other Observable Inputs (Level 2) | ||
Liabilities: | ||
Fair value of long-term fixed interest rate debt | $ 227.6 | $ 231.3 |
Recurring basis | ||
Assets: | ||
Embedded derivatives in purchase and delivery contracts | 1.3 | 0.9 |
Foreign exchange contracts | 0.1 | 4.5 |
Fixed price commodity contracts | 0.2 | 0.8 |
Total assets recorded at fair value | 1.6 | 6.2 |
Liabilities: | ||
Contingent consideration | 13.5 | 12.7 |
Foreign exchange contracts | 0.1 | 0.1 |
Embedded derivatives in purchase and delivery contracts | 3.2 | 2.9 |
Total liabilities recorded at fair value | 16.8 | 15.7 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Embedded derivatives in purchase and delivery contracts | 1.3 | 0.9 |
Foreign exchange contracts | 0.1 | 4.5 |
Fixed price commodity contracts | 0.2 | 0.8 |
Total assets recorded at fair value | 1.6 | 6.2 |
Liabilities: | ||
Foreign exchange contracts | 0.1 | 0.1 |
Embedded derivatives in purchase and delivery contracts | 3.2 | 2.9 |
Total liabilities recorded at fair value | 3.3 | 3 |
Recurring basis | Significant Unobservable Inputs (Level 3) | ||
Liabilities: | ||
Contingent consideration | 13.5 | 12.7 |
Total liabilities recorded at fair value | $ 13.5 | $ 12.7 |
Fair Value of Financial Instr56
Fair Value of Financial Instruments - Time and Call Deposits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Investments in time and call deposits | ||
Restricted cash | $ 4.1 | $ 4 |
Short-term investments | $ 114.2 | |
Minimum | ||
Investments in time and call deposits | ||
Maturity of time deposits | 1 month | |
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 |
Fair Value of Financial Instr57
Fair Value of Financial Instruments - Contingent Consideration (Details) - Contingent consideration $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Changes in contingent consideration liabilities | |
Balance at the beginning of the period | $ 12.7 |
Current period adjustments | 0.6 |
Foreign currency effect | 0.2 |
Balance at the end of the period | $ 13.5 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Restricted Cash | ||||
Current portion of restricted cash, balance sheet location | us-gaap:OtherAssetsCurrent | |||
Non-current portion of restricted cash, balance sheet location | us-gaap:OtherAssetsNoncurrent | |||
Cash and cash equivalents, including restricted cash | $ 287.8 | $ 328.9 | $ 280.7 | $ 345.9 |
ASU 2016-18 - Restricted Cash | ||||
Restricted Cash | ||||
Cash and cash equivalents, including restricted cash | $ 3.9 | $ 3.9 | $ 3.2 | $ 3.4 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventories | ||
Raw materials | $ 161.1 | $ 152 |
Work-in-process | 204.6 | 183.1 |
Finished goods | 95 | 96.6 |
Demonstration units | 57.3 | 54.5 |
Inventories | 518 | 486.2 |
Inventory-in-transit | $ 28.5 | $ 41.4 |
Goodwill and Intangible Asset60
Goodwill and Intangible Assets - Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill | |
Balance at the beginning of the period | $ 169.8 |
Foreign currency impact | 1.3 |
Balance at the end of the period | $ 171.1 |
Goodwill and Intangible Asset61
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Intangible assets | |||
Gross Carrying Amount, intangible assets subject to amortization | $ 239.4 | $ 236 | |
Accumulated Amortization, intangible assets subject to amortization | (163.3) | (154.2) | |
Net Carrying Amount, intangible assets subject to amortization | 76.1 | 81.8 | |
Gross Carrying Amount, total intangible assets | 240.1 | 236.6 | |
Net Carrying Amount, total intangible assets | 76.8 | 82.4 | |
Amortization expense related to intangible assets subject to amortization | 6.8 | $ 6.9 | |
In-process research and development | |||
Intangible assets | |||
Gross Carrying Amount, intangible assets not subject to amortization | 0.7 | 0.6 | |
Net Carrying Amount, intangible assets not subject to amortization | 0.7 | 0.6 | |
Existing technology and related patents | |||
Intangible assets | |||
Gross Carrying Amount, intangible assets subject to amortization | 198.6 | 195.4 | |
Accumulated Amortization, intangible assets subject to amortization | (146.8) | (138.9) | |
Net Carrying Amount, intangible assets subject to amortization | 51.8 | 56.5 | |
Customer relationships | |||
Intangible assets | |||
Gross Carrying Amount, intangible assets subject to amortization | 34.7 | 34.6 | |
Accumulated Amortization, intangible assets subject to amortization | (13.9) | (12.9) | |
Net Carrying Amount, intangible assets subject to amortization | 20.8 | 21.7 | |
Non compete contracts | |||
Intangible assets | |||
Gross Carrying Amount, intangible assets subject to amortization | 1.8 | 1.8 | |
Accumulated Amortization, intangible assets subject to amortization | (1.6) | (1.5) | |
Net Carrying Amount, intangible assets subject to amortization | 0.2 | 0.3 | |
Trade names | |||
Intangible assets | |||
Gross Carrying Amount, intangible assets subject to amortization | 4.3 | 4.2 | |
Accumulated Amortization, intangible assets subject to amortization | (1) | (0.9) | |
Net Carrying Amount, intangible assets subject to amortization | $ 3.3 | $ 3.3 |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Debt | ||
Total debt | $ 220.6 | $ 415.6 |
Current portion of long-term debt | (15) | |
Total long-term debt, less current portion | 205.6 | 415.6 |
US Dollar notes under the Note Purchase Agreement | ||
Debt | ||
Debt, before unamortized debt issuance costs | 220 | 220 |
Unamortized debt issuance costs | (0.6) | (0.7) |
Capital lease obligations and other loans | ||
Debt | ||
Total debt | 1.2 | 1.3 |
2015 Credit Agreement | ||
Debt | ||
Total long-term debt, less current portion | $ 0 | |
2015 Credit Agreement | US Dollar revolving loan | ||
Debt | ||
Total debt | $ 195 |
Debt - Credit Agreements (Detai
Debt - Credit Agreements (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Revolving lines of credit | ||
Maximum commitment | $ 763.6 | |
Long-term debt | 205.6 | $ 415.6 |
2015 Credit Agreement | ||
Revolving lines of credit | ||
Long-term debt | 0 | |
2015 Credit Agreement | US Dollar revolving loan | ||
Revolving lines of credit | ||
Maximum commitment | $ 500 | |
Maximum leverage ratio allowed | 3.5 | |
Minimum interest coverage ratio required | 2.5 | |
2015 Credit Agreement | US Dollar revolving loan | Minimum | ||
Revolving lines of credit | ||
Facility fee (as a percent) | 0.10% | |
2015 Credit Agreement | US Dollar revolving loan | Maximum | ||
Revolving lines of credit | ||
Facility fee (as a percent) | 0.20% | |
2015 Credit Agreement | US Dollar revolving loan | Greatest of prime rate, federal funds rate plus spread and adjusted LIBOR plus spread | Minimum | ||
Revolving lines of credit | ||
Interest rate added to base rate (as a percent) | 0.00% | |
2015 Credit Agreement | US Dollar revolving loan | Greatest of prime rate, federal funds rate plus spread and adjusted LIBOR plus spread | Maximum | ||
Revolving lines of credit | ||
Interest rate added to base rate (as a percent) | 0.30% | |
2015 Credit Agreement | US Dollar revolving loan | Prime rate | ||
Revolving lines of credit | ||
Variable interest rate base | prime rate | |
2015 Credit Agreement | US Dollar revolving loan | Federal funds rate | ||
Revolving lines of credit | ||
Variable interest rate base | federal funds rate | |
Interest rate added to base rate (as a percent) | 0.50% | |
2015 Credit Agreement | US Dollar revolving loan | Adjusted LIBOR | ||
Revolving lines of credit | ||
Variable interest rate base | adjusted LIBOR | |
Interest rate added to base rate (as a percent) | 1.00% | |
2015 Credit Agreement | US Dollar revolving loan | LIBOR | ||
Revolving lines of credit | ||
Variable interest rate base | LIBOR | |
2015 Credit Agreement | US Dollar revolving loan | LIBOR | Minimum | ||
Revolving lines of credit | ||
Interest rate added to base rate (as a percent) | 0.90% | |
2015 Credit Agreement | US Dollar revolving loan | LIBOR | Maximum | ||
Revolving lines of credit | ||
Interest rate added to base rate (as a percent) | 1.30% |
Debt - Revolving Loan Arrangeme
Debt - Revolving Loan Arrangements (Details) $ in Millions | Mar. 31, 2018USD ($) |
Revolving lines of credit | |
Total Amount Committed by Lenders | $ 763.6 |
Outstanding Letters of Credit | 138.8 |
Total Amount Available | 624.8 |
Other lines of credit | |
Revolving lines of credit | |
Total Amount Committed by Lenders | 263.6 |
Outstanding Letters of Credit | 137.7 |
Total Amount Available | $ 125.9 |
2015 Credit Agreement | US Dollar revolving loan | |
Revolving lines of credit | |
Weighted Average Interest Rate (as a percent) | 0.00% |
Total Amount Committed by Lenders | $ 500 |
Outstanding Letters of Credit | 1.1 |
Total Amount Available | $ 498.9 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) $ in Millions | Jan. 18, 2017USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Jan. 31, 2012USD ($) |
Debt | ||||
Principal repayment of Senior Notes | $ 20 | |||
US Dollar notes under the Note Purchase Agreement | ||||
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 allowed | 3.50 | |||
Period for interest coverage ratio | 1 year | |||
Minimum interest coverage ratio required | 2.50 | |||
Priority debt as a percentage of consolidated net worth | 25.00% | |||
US Dollar notes under the Note Purchase Agreement | Minimum | ||||
Debt | ||||
Written notice period to holders of the Notes | 30 days | |||
US Dollar notes under the Note Purchase Agreement | Maximum | ||||
Debt | ||||
Written notice period to holders of the Notes | 60 days | |||
3.16% Series 2012A Senior Notes, Tranche A, due January 18, 2017 | US Dollar notes under the Note Purchase Agreement | ||||
Debt | ||||
Senior notes | $ 20 | |||
Interest rate, stated percentage | 3.16% | |||
Principal repayment of Senior Notes | $ 20 | |||
3.74% Series 2012A Senior Notes, Tranche B, due January 18, 2019 | US Dollar notes under the Note Purchase Agreement | ||||
Debt | ||||
Senior notes | $ 15 | |||
Interest rate, stated percentage | 3.74% | |||
4.31% Series 2012A Senior Notes, Tranche C, due January 18, 2022 | US Dollar notes under the Note Purchase Agreement | ||||
Debt | ||||
Senior notes | $ 105 | |||
Interest rate, stated percentage | 4.31% | |||
4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024 | US Dollar notes under the Note Purchase Agreement | ||||
Debt | ||||
Senior notes | $ 100 | |||
Interest rate, stated percentage | 4.46% |
Debt - Covenant Compliance (Det
Debt - Covenant Compliance (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Debt | |
Actual leverage ratio | 0.69 |
Actual interest coverage ratio | 15.8 |
Derivative Instruments and He67
Derivative Instruments and Hedging Activities - Risk Management (Details) € in Millions, ¥ in Millions, zł in Millions, SFr in Millions, $ in Millions, $ in Millions | Mar. 31, 2018PLN (zł) | Mar. 31, 2018JPY (¥) | Mar. 31, 2018CHF (SFr) | Mar. 31, 2018SGD ($) | Mar. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Dec. 31, 2017CHF (SFr) | Dec. 31, 2017SGD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) |
Embedded derivatives in purchase and delivery contracts | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional amount of derivative sale contracts | $ 92.3 | $ 98.3 | ||||||||
Notional amount of derivative purchase contracts | 3.7 | 3.6 | ||||||||
Fixed price commodity contracts | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | 4 | 3 | ||||||||
Not designated as hedging instruments | Foreign exchange contracts | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | 107.3 | 84.2 | ||||||||
Fair Value of Assets | 0.1 | 4.5 | ||||||||
Fair Value of Liabilities | 0.1 | 0.1 | ||||||||
Not designated as hedging instruments | USD:EUR | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | € 55.4 | 68.9 | € 59.5 | 67 | ||||||
Fair Value of Assets | 0.1 | 4.5 | ||||||||
Not designated as hedging instruments | EUR:USD | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | 14.7 | |||||||||
Not designated as hedging instruments | USD:CHF | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | SFr 8.3 | 8.7 | SFr 11 | 11.3 | ||||||
Not designated as hedging instruments | YEN:CHF | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | SFr 1.8 | 1.9 | ||||||||
Fair Value of Liabilities | 0.1 | |||||||||
Not designated as hedging instruments | YEN:USD | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | 3.7 | |||||||||
Not designated as hedging instruments | USD:YEN | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | ¥ 391 | 3.7 | ||||||||
Not designated as hedging instruments | PLN:EUR | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | € 2.3 | 2.8 | € 1.8 | 2.3 | ||||||
Fair Value of Liabilities | 0.1 | |||||||||
Not designated as hedging instruments | EUR:PLN | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | zł 2.6 | 0.8 | ||||||||
Not designated as hedging instruments | USD:SGD | ||||||||||
Derivative instruments and hedging activities | ||||||||||
Notional Amount | $ 2.8 | $ 2.1 | $ 4.9 | $ 3.6 |
Derivative Instruments and He68
Derivative Instruments and Hedging Activities - Fair Values (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Foreign exchange contracts | Other current assets | ||
Derivative instruments and hedging activities | ||
Derivative assets | $ 0.1 | $ 4.5 |
Foreign exchange contracts | Other current liabilities | ||
Derivative instruments and hedging activities | ||
Derivative liabilities | 0.1 | 0.1 |
Embedded derivatives in purchase and delivery contracts | Other current assets | ||
Derivative instruments and hedging activities | ||
Derivative assets | 1.3 | 0.9 |
Embedded derivatives in purchase and delivery contracts | Other current liabilities | ||
Derivative instruments and hedging activities | ||
Derivative liabilities | 1.2 | 1.5 |
Embedded derivatives in purchase and delivery contracts | Other long-term liabilities | ||
Derivative instruments and hedging activities | ||
Derivative liabilities | 2 | 1.4 |
Fixed price commodity contracts | Other current assets | ||
Derivative instruments and hedging activities | ||
Derivative assets | $ 0.2 | $ 0.8 |
Derivative Instruments and He69
Derivative Instruments and Hedging Activities - Gains and Losses (Details) - Not designated as hedging instruments - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative instruments and hedging activities | ||
Impact on net income of unrealized gains and losses resulting from changes in fair value of derivative instruments | $ (4.9) | $ 0.3 |
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 | (4.4) | 0.9 |
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 | 0.1 | (0.7) |
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 | $ (0.6) | $ 0.1 |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Provision for Income Taxes | |||
Income tax expense (benefit) | $ 8.4 | $ 9.9 | |
Effective tax rates (as a percent) | 23.50% | 31.30% | |
Unrecognized tax benefits, excluding penalties and interest | $ 4.5 | $ 4.4 | |
Accrued interest and penalties related to uncertain tax positions | 0.3 | $ 0.2 | |
Penalties and interest (benefit) expense relating to unrecognized tax benefits | $ 0 | $ 0 | |
Statutory tax rate (as a percent) | 21.00% | ||
Germany and Switzerland | |||
Provision for Income Taxes | |||
Increase in effective tax rate from impact of foreign statutory rates (as a percent) | 4.00% | ||
Germany | Foreign | |||
Provision for Income Taxes | |||
Foreign statutory tax rate for 2017 (as a percent) | 30.00% | ||
Switzerland | Foreign | |||
Provision for Income Taxes | |||
Foreign statutory tax rate for 2017 (as a percent) | 20.00% |
Commitments and Contingencies -
Commitments and Contingencies - Litigation and Related Contingencies (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Legal | ||
Litigation and Related Contingencies | ||
Accruals for potential contingencies | $ 0 | $ 0 |
Commitments and Contingencies72
Commitments and Contingencies - Guarantees (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Letters of Credit and Guarantees | ||
Bank guarantees primarily for customer advances | $ 138.8 | |
Revolving Loans | ||
Letters of Credit and Guarantees | ||
Bank guarantees primarily for customer advances | $ 138.8 | $ 138.8 |
Shareholders' Equity - Share Re
Shareholders' Equity - Share Repurchase and Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 23, 2018 | Feb. 22, 2016 | Mar. 31, 2018 | Mar. 31, 2017 |
Shareholders' Equity | ||||
Dividend declared per common share (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.04 | |
Target dividend per annum (in dollars per share) | $ 0.16 | |||
Dividends paid, aggregate cost | $ 6.3 | $ 6.3 | $ 6.4 | |
May 2017 Repurchase Program | ||||
Shareholders' Equity | ||||
Amount approved for repurchase of common stock | $ 225 | |||
Common stock repurchased during the period (in shares) | 0 |
Shareholders' Equity - Comprehe
Shareholders' Equity - Comprehensive Income (loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of comprehensive income | ||
Consolidated net income | $ 27.4 | $ 21.7 |
Foreign currency translation adjustments | 24.8 | 15.6 |
Pension liability adjustments, net of tax | (0.4) | 0.2 |
Net comprehensive income | 51.8 | 37.5 |
Less: Comprehensive income attributable to noncontrolling interests | 0.6 | 0.2 |
Comprehensive income attributable to Bruker Corporation | $ 51.2 | $ 37.3 |
Shareholders' Equity - Accumula
Shareholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Summary of the components of accumulated other comprehensive income (loss), net of tax | |
Balance at beginning of period | $ 733.5 |
Balance at end of period | 790.3 |
Accumulated Other Comprehensive Income (Loss) | |
Summary of the components of accumulated other comprehensive income (loss), net of tax | |
Balance at beginning of period | 27 |
Other comprehensive income (loss) before reclassification | 23.7 |
Amount reclassified from other comprehensive income (loss), net of tax of $0.0 million | 0.5 |
Net current period other comprehensive income | 24.2 |
Balance at end of period | 51.2 |
Amount from reclassification, tax | 0 |
Foreign Currency Translation | |
Summary of the components of accumulated other comprehensive income (loss), net of tax | |
Balance at beginning of period | 72.2 |
Other comprehensive income (loss) before reclassification | 24.7 |
Net current period other comprehensive income | 24.7 |
Balance at end of period | 96.9 |
Pension Liability Adjustment | |
Summary of the components of accumulated other comprehensive income (loss), net of tax | |
Balance at beginning of period | (45.2) |
Other comprehensive income (loss) before reclassification | (1) |
Amount reclassified from other comprehensive income (loss), net of tax of $0.0 million | 0.5 |
Net current period other comprehensive income | (0.5) |
Balance at end of period | $ (45.7) |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Noncontrolling interests | ||
Balance at beginning of period | $ 8.1 | $ 6.7 |
Net income | 0.4 | 0.1 |
Foreign currency translation adjustments | 0.1 | 0.1 |
Balance at end of period | 8.8 | $ 6.9 |
ASU No. 2014-09 | ||
Noncontrolling interests | ||
Impact of ASC 606 adoption | $ 0.2 |
Other Charges, Net - Components
Other Charges, Net - Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Charges, Net | ||
Information technology transformation costs | $ 1.5 | $ 1.2 |
Restructuring charges | 3.3 | 1.5 |
Acquisition-related charges | 1 | 0.4 |
Other | 2 | |
Other charges, net | $ 7.8 | $ 3.1 |
Other Charges, Net - Restructur
Other Charges, Net - Restructuring Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring charges | ||
Restructuring expenses | $ 3.5 | $ 0.1 |
Costs of product revenue | ||
Restructuring charges | ||
Restructuring expenses | 0.2 | (1.4) |
Other charges, net | ||
Restructuring charges | ||
Restructuring expenses | $ 3.3 | $ 1.5 |
Other Charges, Net - Restruct79
Other Charges, Net - Restructuring Reserves (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Changes in the restructuring reserves | ||
Balance at the beginning of the period | $ 10.8 | |
Restructuring charges | 3.5 | $ 0.1 |
Cash payments | (3) | |
Other, non-cash adjustments and foreign currency effect | (0.9) | |
Balance at the end of the period | 10.4 | |
Severance | ||
Changes in the restructuring reserves | ||
Balance at the beginning of the period | 2 | |
Restructuring charges | 1 | |
Cash payments | (1.5) | |
Other, non-cash adjustments and foreign currency effect | 0.4 | |
Balance at the end of the period | 1.9 | |
Exit Costs | ||
Changes in the restructuring reserves | ||
Balance at the beginning of the period | 2.1 | |
Restructuring charges | 2.5 | |
Cash payments | (1.5) | |
Other, non-cash adjustments and foreign currency effect | (0.6) | |
Balance at the end of the period | 2.5 | |
Provisions for Excess Inventory | ||
Changes in the restructuring reserves | ||
Balance at the beginning of the period | 6.7 | |
Other, non-cash adjustments and foreign currency effect | (0.7) | |
Balance at the end of the period | $ 6 |
Interest and Other Income (Ex80
Interest and Other Income (Expense), Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest and Other Income (Expense), Net | ||
Interest expense, net | $ (3.4) | $ (3.7) |
Exchange gains (losses) on foreign currency transactions | 0.5 | (2.3) |
Other | 0.6 | |
Interest and other income (expense), net | $ (2.3) | $ (6) |
Business Segment Information (D
Business Segment Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Business segment information | |||
Number of reportable segments | segment | 2 | ||
Revenue | $ 431.7 | $ 384.9 | |
Operating Income (loss) | 38.1 | 37.6 | |
Assets | 1,830.5 | $ 1,948.5 | |
Eliminations | |||
Business segment information | |||
Revenue | (0.9) | (1.6) | |
Corporate, eliminations and other | |||
Business segment information | |||
Operating Income (loss) | 0.2 | ||
Assets | (2.8) | (4.9) | |
BSI | Operating segments | |||
Business segment information | |||
Revenue | 387 | 346.4 | |
Operating Income (loss) | 35.7 | 38.1 | |
Assets | 1,796.6 | 1,917.8 | |
BEST | Operating segments | |||
Business segment information | |||
Revenue | 45.6 | 40.1 | |
Operating Income (loss) | 2.2 | $ (0.5) | |
Assets | $ 36.7 | $ 35.6 |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 08, 2018 |
Subsequent Event | Anasys Instruments Corp | |
Subsequent Event | |
Ownership percentage acquired | 100.00% |