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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934

For the quarterly period ended March 31, 2024

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934

For the transition period from to

Commission File Number 000-30833

BRUKER CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

04-3110160

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

40 Manning Road, Billerica, MA 01821

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (978) 663-3660

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

Symbols(s)

Name of each exchange

on which registered

Common Stock

BRKR

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 

 

Class

Outstanding at May 8, 2024

Common Stock, $0.01 par value per share

145,335,376 shares

 

 


BRUKER CORPORATION

Quarterly Report on Form 10-Q

For the Quarter Ended March 31, 2024

Table of Contents

Page

Part I

FINANCIAL INFORMATION

3

Item 1:

Unaudited Condensed Consolidated Financial Statements

3

Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023

3

Unaudited Condensed Consolidated Statements of Income for the three months ended March 31, 2024 and 2023

4

 

Unaudited Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023

5

Unaudited Condensed Consolidated Statements of Redeemable Noncontrolling Interests and Shareholders’ Equity for the three months ended March 31, 2024 and 2023

6

Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023

7

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2:

Management’s Discussion and Analysis of Financial Condition and Results of Operations

29

Item 3:

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4:

Controls and Procedures

40

Part II

OTHER INFORMATION

41

Item 1:

Legal Proceedings

41

Item 1A:

Risk Factors

41

Item 2:

Unregistered Sales of Equity Securities and Use of Proceeds

41

Item 5:

Other Information

41

Item 6:

Exhibits

42

Signatures

43

 

2


PART I FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)

 

March 31,
2024

 

 

December 31,
2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

340.1

 

 

$

488.3

 

Accounts receivable, net

 

 

475.4

 

 

 

492.0

 

Inventories

 

 

1,060.5

 

 

 

968.3

 

Other current assets

 

 

264.4

 

 

 

215.6

 

Total current assets

 

 

2,140.4

 

 

 

2,164.2

 

Property, plant and equipment, net

 

 

586.1

 

 

 

599.7

 

Goodwill

 

 

751.9

 

 

 

582.6

 

Intangible assets, net

 

 

449.2

 

 

 

330.5

 

Operating lease assets

 

 

105.1

 

 

 

91.7

 

Deferred tax assets

 

 

280.1

 

 

 

297.2

 

Other long-term assets

 

 

193.6

 

 

 

184.0

 

Total assets

 

$

4,506.4

 

 

$

4,249.9

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt

 

$

21.2

 

 

$

121.2

 

Accounts payable

 

 

199.1

 

 

 

202.7

 

Deferred revenue and customer advances

 

 

485.2

 

 

 

400.0

 

Other current liabilities

 

 

477.0

 

 

 

478.2

 

Total current liabilities

 

 

1,182.5

 

 

 

1,202.1

 

 

 

 

 

 

 

 

Long-term debt

 

 

1,357.3

 

 

 

1,160.3

 

Long-term deferred revenue and customer advances

 

 

105.6

 

 

 

91.5

 

Deferred tax liabilities

 

 

81.8

 

 

 

67.7

 

Operating lease liabilities

 

 

85.7

 

 

 

74.8

 

Accrued pension

 

 

76.0

 

 

 

76.6

 

Other long-term liabilities

 

 

166.7

 

 

 

163.6

 

Total liabilities

 

$

3,055.6

 

 

$

2,836.6

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 16)

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

17.9

 

 

 

18.7

 

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, 176,113,521 and
   
175,943,705 shares issued and 145,334,642 and 145,164,826 shares outstanding at
   March 31, 2024 and December 31, 2023, respectively

 

 

1.7

 

 

 

1.7

 

Treasury stock, at cost, 30,778,879 shares at March 31, 2024, and December 31, 2023, respectively

 

 

(1,237.2

)

 

 

(1,237.2

)

Additional paid-in capital

 

 

291.1

 

 

 

282.9

 

Retained earnings

 

 

2,367.4

 

 

 

2,323.8

 

Accumulated other comprehensive (loss) income, net of tax

 

 

(7.7

)

 

 

6.0

 

Total shareholders’ equity attributable to Bruker Corporation

 

 

1,415.3

 

 

 

1,377.2

 

Noncontrolling interests in consolidated subsidiaries

 

 

17.6

 

 

 

17.4

 

Total shareholders’ equity

 

 

1,432.9

 

 

 

1,394.6

 

Total liabilities, redeemable noncontrolling interests and shareholders’ equity

 

$

4,506.4

 

 

$

4,249.9

 

The accompanying notes are an integral part of these financial statements.

3


BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)

 

Three Months Ended
March 31,

 

 

2024

 

 

2023

 

Product revenue

 

$

586.9

 

 

$

567.1

 

Service and other revenue

 

 

134.8

 

 

 

118.2

 

Total revenue

 

 

721.7

 

 

 

685.3

 

Cost of product revenue

 

 

291.7

 

 

 

257.2

 

Cost of service and other revenue

 

 

77.2

 

 

 

68.4

 

Total cost of revenue

 

 

368.9

 

 

 

325.6

 

Gross profit

 

 

352.8

 

 

 

359.7

 

Operating expenses:

 

 

 

 

 

 

Selling, general and administrative

 

 

195.3

 

 

 

162.7

 

Research and development

 

 

81.8

 

 

 

69.0

 

Other charges, net

 

 

10.9

 

 

 

5.3

 

Total operating expenses

 

 

288.0

 

 

 

237.0

 

Operating income

 

 

64.8

 

 

 

122.7

 

Interest and other income (expense), net

 

 

6.8

 

 

 

(16.1

)

Income before income taxes, equity in income of unconsolidated
  investees, net of tax, and noncontrolling interests in consolidated
  subsidiaries

 

 

71.6

 

 

 

106.6

 

Income tax provision

 

 

19.8

 

 

 

29.9

 

Equity in income of unconsolidated investees, net of tax

 

 

0.2

 

 

 

0.7

 

Net income

 

 

52.0

 

 

 

77.4

 

Net income attributable to noncontrolling interests in consolidated
   subsidiaries

 

 

1.1

 

 

 

0.9

 

Net income attributable to Bruker Corporation

 

$

50.9

 

 

$

76.5

 

Net income per common share attributable to Bruker Corporation
   shareholders:

 

 

 

 

 

 

Basic

 

$

0.35

 

 

$

0.52

 

Diluted

 

$

0.35

 

 

$

0.52

 

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic

 

 

145.2

 

 

 

146.8

 

Diluted

 

 

145.9

 

 

 

147.6

 

The accompanying notes are an integral part of these financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

4


BRUKER CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

 

Net income

 

$

52.0

 

 

$

77.4

 

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of tax expense (benefit) of $2.2 and ($1.4) respectively

 

 

(77.2

)

 

 

25.8

 

 

Derivatives designated as hedging instruments net of tax expense (benefit)
    of ($
19.1), and $3.4 respectively

 

 

62.1

 

 

 

(10.7

)

 

Pension and other postretirement benefit liability adjustments net of tax expense of $0.1, and $0.5 respectively

 

 

0.6

 

 

 

0.1

 

 

Total other comprehensive (loss) income

 

 

(14.5

)

 

 

15.2

 

 

Total Comprehensive income

 

 

37.5

 

 

 

92.6

 

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

1.1

 

 

 

1.3

 

 

Less: Comprehensive loss attributable to redeemable noncontrolling
   interests

 

 

(0.8

)

 

 

 

 

Total Comprehensive income attributable to Bruker Corporation

 

$

37.2

 

 

$

91.3

 

 

The accompanying notes are an integral part of these financial statements.

5


BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY

(in millions, except share data)

 

Redeemable
Noncontrolling
Interests

 

 

 

Number of Common
Shares Outstanding

 

 

Common
Stock
Amount

 

 

Number of Treasury
Shares

 

 

Treasury
Stock
Amount

 

 

Additional
Paid-In
Capital

 

 

Retained
Earnings

 

 

Accumulated
Other
Comprehensive
(loss) Income, net of tax

 

 

Total
Shareholders’
Equity
Attributable to
Bruker
Corporation

 

 

Noncontrolling
Interests in
Consolidated
Subsidiaries

 

 

Total
Shareholders’
Equity

 

Balance at December 31, 2023

 

$

18.7

 

 

 

 

145,164,826

 

 

$

1.7

 

 

 

30,778,879

 

 

$

(1,237.2

)

 

$

282.9

 

 

$

2,323.8

 

 

$

6.0

 

 

$

1,377.2

 

 

$

17.4

 

 

$

1,394.6

 

Stock options exercised

 

 

 

 

 

 

146,765

 

 

 

 

 

 

 

 

 

 

 

 

3.4

 

 

 

 

 

 

 

 

 

3.4

 

 

 

 

 

 

3.4

 

Restricted stock units vested

 

 

 

 

 

 

23,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.6

 

 

 

 

 

 

 

 

 

4.6

 

 

 

 

 

 

4.6

 

Employee stock purchase plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.2

 

 

 

 

 

 

 

 

 

0.2

 

 

 

 

 

 

0.2

 

Cash dividends declared and paid to
    common shareholders
    ($
0.05 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7.3

)

 

 

 

 

 

(7.3

)

 

 

 

 

 

(7.3

)

Loans to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.9

)

 

 

(0.9

)

Consolidated net (loss) income

 

 

(0.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

50.9

 

 

 

 

 

 

50.9

 

 

 

1.4

 

 

 

52.3

 

Other comprehensive income

 

 

(0.5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13.7

)

 

 

(13.7

)

 

 

(0.3

)

 

 

(14.0

)

Balance at March 31, 2024

 

$

17.9

 

 

 

 

145,334,642

 

 

$

1.7

 

 

 

30,778,879

 

 

$

(1,237.2

)

 

$

291.1

 

 

$

2,367.4

 

 

$

(7.7

)

 

$

1,415.3

 

 

$

17.6

 

 

$

1,432.9

 

The accompanying notes are an integral part of these financial statements.

6


BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY

(in millions, except share data)

 

Redeemable
Noncontrolling
Interests

 

 

 

Number of Common
Shares

 

 

Common
Stock
Amount

 

 

Number of Treasury
Shares

 

 

Treasury
Stock
Amount

 

 

Additional
Paid-In
Capital

 

 

Retained
Earnings

 

 

Accumulated
Other
Comprehensive
(loss) Income, net of tax

 

 

Total
Shareholders’
Equity
Attributable to
Bruker
Corporation

 

 

Noncontrolling
Interests in
Consolidated
Subsidiaries

 

 

Total
Shareholders’
Equity

 

Balance at December 31, 2022

 

$

6.1

 

 

 

 

147,023,144

 

 

$

1.7

 

 

 

28,366,442

 

 

$

(1,085.0

)

 

$

256.3

 

 

$

1,926.0

 

 

$

14.8

 

 

$

1,113.8

 

 

$

11.9

 

 

$

1,125.7

 

Stock options exercised

 

 

 

 

 

 

34,957

 

 

 

 

 

 

 

 

 

 

 

 

0.7

 

 

 

 

 

 

 

 

 

0.7

 

 

 

 

 

 

0.7

 

Restricted stock units vested

 

 

 

 

 

 

18,463

 

 

 

 

 

 

 

 

 

 

 

 

(0.1

)

 

 

 

 

 

 

 

 

(0.1

)

 

 

 

 

 

(0.1

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.1

 

 

 

 

 

 

 

 

 

4.1

 

 

 

 

 

 

4.1

 

Employee stock purchase plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.2

 

 

 

 

 

 

 

 

 

0.2

 

 

 

 

 

 

0.2

 

Shares repurchased

 

 

 

 

 

 

(315,318

)

 

 

 

 

 

315,318

 

 

 

(22.2

)

 

 

(0.1

)

 

 

 

 

 

 

 

 

(22.3

)

 

 

 

 

 

(22.3

)

Cash dividends declared and paid to
    common shareholders
    ($
0.05 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7.4

)

 

 

 

 

 

(7.4

)

 

 

 

 

 

(7.4

)

Biognosys acquisition - other shareholders

 

 

2.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other shareholders of majority-owned acquisitions

 

 

3.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from the sale of noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.3

 

 

 

5.3

 

Consolidated net (loss) income

 

 

(0.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

76.5

 

 

 

 

 

 

76.5

 

 

 

1.0

 

 

 

77.5

 

Other comprehensive income

 

 

0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14.8

 

 

 

14.8

 

 

 

0.3

 

 

 

15.1

 

Balance at March 31, 2023

 

$

12.0

 

 

 

 

146,761,246

 

 

$

1.7

 

 

 

28,681,760

 

 

$

(1,107.2

)

 

$

261.1

 

 

$

1,995.1

 

 

$

29.6

 

 

$

1,180.3

 

 

$

18.5

 

 

$

1,198.8

 

The accompanying notes are an integral part of these financial statements.

7


BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

 

Three Months Ended
March 31,

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

52.0

 

 

$

77.4

 

Adjustments to reconcile net income to cash flows from operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

34.7

 

 

 

25.1

 

Stock-based compensation expense

 

 

5.3

 

 

 

6.5

 

Deferred income taxes

 

 

(2.1

)

 

 

1.2

 

Impairment of minority investments and other long-lived assets

 

 

1.4

 

 

 

6.9

 

Gain on sale of property, plant and equipment

 

 

 

 

 

(9.8

)

Other non-cash expenses, net

 

 

(6.1

)

 

 

5.0

 

Changes in operating assets and liabilities, net of acquisitions and divestitures:

 

 

 

 

 

 

Accounts receivable

 

 

15.6

 

 

 

8.3

 

Inventories

 

 

(64.8

)

 

 

(55.0

)

Accounts payable and accrued expenses

 

 

(3.7

)

 

 

13.1

 

Income taxes payable, net

 

 

(11.9

)

 

 

(5.8

)

Deferred revenue and customer advances

 

 

31.7

 

 

 

34.8

 

Other changes in operating assets and liabilities, net

 

 

(30.3

)

 

 

(20.2

)

Net cash provided by operating activities

 

 

21.8

 

 

 

87.5

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(21.4

)

 

 

(25.0

)

Cash paid for minority investments

 

 

(10.0

)

 

 

(8.2

)

Cash paid for acquisitions, net of cash acquired

 

 

(274.5

)

 

 

(88.1

)

Proceeds from sales of property, plant and equipment

 

 

0.5

 

 

 

10.7

 

Net proceeds from cross-currency swap agreements

 

 

1.2

 

 

 

2.4

 

Net cash used in investing activities

 

 

(304.2

)

 

 

(108.2

)

Cash flows from financing activities:

 

 

 

 

 

 

Repayments of revolving line of credit

 

 

(0.5

)

 

 

 

Proceeds from revolving line of credit

 

 

268.9

 

 

 

 

Repayment of long-term debt

 

 

(3.4

)

 

 

(2.1

)

Repayment of 2012 Note Purchase Agreement

 

 

(100.0

)

 

 

 

Repayment of 2019 Term Note Agreement

 

 

(3.8

)

 

 

(3.8

)

Payment of deferred financing costs

 

 

(4.7

)

 

 

 

Proceeds from issuance of common stock, net

 

 

3.4

 

 

 

0.7

 

Payment of contingent consideration

 

 

 

 

 

(1.0

)

Payment of dividends to common shareholders

 

 

(7.3

)

 

 

(7.4

)

Repurchase of common stock

 

 

 

 

 

(22.4

)

Proceeds from (payment for) the sale (purchase) of noncontrolling interests

 

 

(0.9

)

 

 

5.3

 

Net cash provided by (used in) financing activities

 

 

151.7

 

 

 

(30.7

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(17.6

)

 

 

4.1

 

Net change in cash, cash equivalents and restricted cash

 

 

(148.3

)

 

 

(47.3

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

491.6

 

 

 

648.7

 

Cash, cash equivalents and restricted cash at end of period

 

$

343.3

 

 

$

601.4

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Restricted cash period beginning balance

 

$

3.3

 

 

$

3.2

 

Restricted cash period ending balance

 

$

3.2

 

 

$

3.5

 

The accompanying notes are an integral part of these financial statements.

 

7


BRUKER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

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 four reportable segments, Bruker Scientific Instruments (BSI) BioSpin, BSI CALID (Chemicals, Applied Markets, Life Science, In Vitro Diagnostics, Detection), BSI NANO and Bruker Energy & Supercon Technologies (BEST).

BSI BioSpin Segment designs, manufactures and distributes enabling life science tools based on magnetic resonance technology. BSI BioSpin Segment’s revenues are generated by academic and government research customers, pharmaceutical and biotechnology companies and nonprofit laboratories, as well as chemical, food and beverage, clinical and other industrial companies.

BSI CALID Segment designs, manufactures and distributes life science mass spectrometry, applied 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 BSI CALID Segment include academic institutions and medical schools; pharmaceutical, biotechnology and diagnostics companies; contract research organizations; nonprofit and for-profit forensics laboratories; agriculture, food and beverage safety laboratories; environmental and clinical microbiology laboratories; hospitals and government departments and agencies.

BSI NANO Segment 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; spark optical emission spectroscopy systems; chip cytometry products and services for targeted spatial proteomics, multi-omic services; optofluidic and proteomic barcoding platforms; and products and services for spatial genomics research. Customers of the BSI NANO Segment include academic institutions, governmental customers, nanotechnology companies, semiconductor companies, raw material manufacturers, industrial companies, biotechnology and pharmaceutical companies and other businesses involved in materials research and life science research analysis.

BEST 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.

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, 2024 and December 31, 2023, and for the three months ended March 31, 2024 and 2023, 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”). Accordingly, the financial information presented herein does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair 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, 2024, the Company’s significant accounting policies, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, have not changed.

Risks and Uncertainties

The Company is subject to the same risks and uncertainties as disclosed in its Annual Report on Form 10-K filed with the SEC on February 29, 2024, however, as of January 1, 2024, the Company is subject to new risks related to its self-funded health insurance. Effective January 1, 2024, the Company is self-insured for health care claims for eligible participating U.S. employees subject to certain deductibles and limitations. The Company determines its liability for claims incurred but not reported for insurance liabilities

8


on an actuarial basis. Since there are many estimates and assumptions involved in recording insurance liabilities, differences between actual future events and prior estimates and assumptions, could result in materially different amounts of expense and result in adjustments to these liabilities and materially different amounts of expense, which could harm our business and adversely affect our results of operations and financial condition.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements requires the Company to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis the Company evaluates estimates, judgments and methodologies. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. The full extent to which the global supply chain interruptions, higher energy costs and shortages, the global economy, including inflation and the threat of recession, and geopolitical instability will directly or indirectly impact future business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee cost related amounts, will depend on future developments that are highly uncertain, including as a result of new developments concerning global supply chain and various global conflicts. The Company has made estimates of the impact of these disruptions within the financial statements and there may be changes to those estimates in future periods. Actual results may differ from management’s estimates if these results differ from historical experience.

 

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2.
Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires enhanced income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregation of information related to income taxes paid as presented on the Cash Flow Statement. This guidance is effective for annual reporting periods beginning after December 15, 2024. The Company is evaluating the potential impact of ASU 2023-09 on the Company’s consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segments Disclosures (“ASU 2023-07”). The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”). These significant segment expenses are included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASC 2023-07 are also required for public entities with a single reportable segment. This guidance is effective for annual reporting periods beginning after December 15, 2023, and interim periods after December 15, 2024. The Company is evaluating the potential impact of ASU 2023-07 on the Company’s consolidated financial statements and related disclosures.

 

3.
Revenue

The following table presents the Company’s revenue by Segment (in millions):

 

 

Three Months Ended
March 31,

 

 

 

2024

 

 

2023

 

 

Revenue by Segment:

 

 

 

 

 

 

 

BSI BioSpin

 

$

182.8

 

 

$

180.3

 

 

BSI CALID

 

 

227.9

 

 

 

236.7

 

 

BSI NANO

 

 

240.4

 

 

 

209.6

 

 

BEST

 

 

73.1

 

 

 

62.2

 

 

Eliminations (a)

 

 

(2.5

)

 

 

(3.5

)

 

Total revenue

 

$

721.7

 

 

$

685.3

 

 

(a)
Represents corporate costs and eliminations not allocated to the reportable segments.

 

Revenue for the Company recognized at a point in time versus over time is as follows (in millions):

 

 

Three Months Ended
March 31,

 

 

 

2024

 

 

2023

 

 

Revenue recognized at a point in time

 

$

608.5

 

 

$

598.7

 

 

Revenue recognized over time

 

 

113.2

 

 

 

86.6

 

 

Total revenue

 

$

721.7

 

 

$

685.3

 

 

 

The following table presents the Company’s revenue by End Customer Geography (in millions):

 

 

Three Months Ended
March 31,

 

 

 

2024

 

 

2023

 

 

Revenue by End Customer Geography:

 

 

 

 

 

 

 

United States

 

$

194.8

 

 

$

175.1

 

 

Germany

 

 

66.8

 

 

 

62.6

 

 

Rest of Europe

 

 

178.1