Bruker Corporation's CEO Discusses Q3 2011 Results - Earnings Call Transcript

Call Start: 09:00

Call End: 10:04

Bruker Corporation (BRKR)

Q3 2011 Earnings Conference Call

October 27, 2011 09:00 ET

Executives

Stacey Desrochers – Treasurer and Director, Investor Relations

Frank Laukien – President and Chief Executive Officer

Tom Rosa – Chief Financial Officer

Bill Knight – Chief Financial Officer and Interim Chief Operating Officer

Analysts

Tycho Peterson – JPMorgan

Amanda Murphy – William Blair

Isaac Ro – Goldman Sachs

Peter Lawson – Mizuho Securities

Dan Arias – UBS

Dan Leonard – Leerink Swann

John Wood – Jefferies

Presentation

Operator

Good day, ladies and gentleman, and welcome to the Bruker Corporation quarterly earnings conference call. My name is (Cathy) and I’ll be operator for today. At this time, all participants are in a listen-only model. Later, we will conduct a question-and-answer session. (Operator Instructions) As a remainder, this conference is recorded for replay purposes.

I would now like to turn the conference over to your host for today’s call, Ms. Stacey Desrochers, Treasurer and Director of Investor Relations. Please proceed, ma’am.

Stacey Desrochers – Treasurer and Director, Investor Relations

Thank you, good morning and welcome to Bruker Corporation’s third quarter 2011 financial results conference call. With me on today’s call are Frank Laukien, Bruker’s President and Chief Executive Officer; Bill Knight, Bruker’s Chief Financial Officer and interim Chief Operating Officer; Brian Monahan, Bruker’s Vice President of Strategic and Financial Planning; and Tom Rosa, the Chief Financial Officer of our Bruker Energy & Supercon Technologies Inc. subsidiary, or BEST.

Before we begin let me briefly cover our Safe Harbor statements. Various remarks that we may make about the company’s future expectations, plans and prospects constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those described in the company’s filings with the Securities and Exchange Commission.

While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change and therefore you should not rely upon these forward-looking statements as representing our views as of any date subsequent to today.

In addition to the financial measures prepared in accordance with Generally Accepted Accounting Principles or GAAP, we will discuss certain non-GAAP financial measures, including adjusted EPS, adjusted operating income, and adjusted operating margins which are non-GAAP measures that excludes certain items.

We exclude these items because they are outside of our normal operations and/or in certain cases are difficult to forecast accurately for future periods. We believe that the use of non-GAAP measures helps investors gain a better understanding of our core operating results and future prospects, consistent with how we measures and forecast the company’s performance, especially when comparing the results to previous periods or forecasts. A reconciliation of our GAAP to adjusted numbers can be found in our press release issued earlier today and is located in the Investor Relations section of our bruker.com website.

Today Frank will provide an update on the business and certain financial highlights. Tom will describe the financial results of our BEST segment and then Bill will discuss the financial results of our Bruker Scientific Instruments segment in more detail.

I will now turn the call over to our President and CEO, Frank Laukien.

Frank Laukien – President and Chief Executive Officer

Thank you Stacy and good morning everyone. We appreciate you joining us today. Before I provide the business update and discuss additional highlights for the third quarter and the first nine months of 2011. I’d like to welcome our new sell side analysts, Amanda Murphy from William Blair, and Derik De Bruin from Bank of America Merrill Lynch. Welcome.

I believe most of you read our earnings press release issued at 7 A.M. this morning and you are now familiar with the key numbers in the earnings release. In the third quarter of 2011, we continue to deliver excellent top-line growth. Specifically, in the third quarter of 2011, our revenue increased year-over-year by 35% to $418.4 million. Revenue in the third quarter of 2011 increased by 11% organically when we exclude the effects of foreign currency translation and acquisitions.

GAAP net income for the third quarter 2011 was $19.8 million or $0.12 per diluted share compared to GAAP net income of $27.4 million or $0.17 per diluted share in the first share of 2010. Adjusted net income which includes acquisition related restructuring and other charges was $36.2 million in the third quarter of 2011, or $0.22 per diluted share compare with adjusted net income of $35.2 million, or $0.21 per diluted share in the third quarter of 2010.

For the nine months ended September 30, 2011, our revenue was $1.176.6 billion, an increase of 32% over the first nine months of 2010 or 8% organic growth year-over-year. GAAP net income for the nine months ended September 30, 2011 were $53.2 million or $0.32 per diluted share compared to GAAP net income of $56.1 million or $0.40 per diluted share during the nine months ended September 30, 2010.

Adjusted net income for the nine months ended September 30, 2011 was $92.7 million or $0.56 per diluted share compared to adjusted net income of $79.9 million or $0.48 per diluted share during the nine months ended September 30, 2010. As a result of our competitive portfolio of high performance systems and solutions, our new order bookings continued to grow strongly in the third quarter, both year-over-year and sequentially, and our already high contractual backlog has grown even further.

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