High-plex targeted spatial proteomic imaging for quantitative
characterization of human cancer tissue with subcellular
resolution using Canopy ChipCytometry™
2021
ANNUAL REPORT
Innovation with Integrity
Dear Fellow
Bruker Shareholders,
Bruker delivered exceptional financial and
operating performance improvements in 2021,
by almost any definition or metric. As the
global economy recovered from the COVID-19
pandemic, our teams captured strengthening
demand for our innovative life science,
diagnostics and biopharma, applied and
industrial research and QC solutions. Despite
supply chain and logistics challenges, Bruker
delivered revenue growth of nearly 22% in
2021 compared to 2020. Non-GAAP operating
margins reached a new high of 19.4% in 2021,
contributing to non-GAAP diluted earnings per
share (EPS) of $2.10, up over 50% from 2020.
Our performance in 2021 reflected growth well
beyond pre-pandemic levels, including revenue
growth to 17% above and non-GAAP EPS 34%
above 2019 pre-pandemic levels. During this
year of significant growth, we also accelerated
important strategic investments, particularly in our
high growth, high margin Project Accelerate 2.0
initiatives.
With stronger financial performance, Bruker’s
2021 return on invested capital (ROIC), a non-
GAAP measure, was near 28%(1), in the top-
tier amongst our peer group. All in all, it was a
year of significant progress and achievement,
underscoring the advantages of our focused
growth strategy and differentiated culture,
which emphasizes customer collaborations,
disciplined entrepreneurialism, and ‘innovation
with integrity’ in everything we do.
Developing Leading Market Positions in
High Growth Areas: Potential Breakout
Opportunities
Our strategy focuses on accelerating revenue
growth while continuing to deliver sustainable
margin expansion. In 2021, we gained
additional confidence that two of our Project
Accelerate 2.0 initiatives were poised for fast
long-term growth, and should enable them to
play a large role in our strategy. We call these
two areas our potential breakout opportunities:
Unbiased and Targeted Proteomics,
and
Spatial and Single-Cell Biology
In 2021, revenues from all six Project Accelerate
2.0 initiatives represented more than 54% of
Bruker’s total revenue. We continue to expect
our Project Accelerate 2.0 initiatives to grow
organically by high single digits to double digits
annually over the next three years(2), and for our
potential breakout opportunities, we anticipate
double digit annual organic growth over the
same period.
Project Accelerate 2.0,
Six Expanded High-Growth,
High-Margin Initiatives
Let me share an update on our progress with
these two key initiatives. In proteomics, we are
unlocking the transformative power of unbiased,
deep 4D-Proteomics and 4D-Epiproteomics
with our flagship timsTOF platform. In 2021,
the timsTOF family produced more than $100
million in revenues, up more than 30% over
2020. In June 2021, we introduced two new
systems, the next generation timsTOF Pro
2, and the timsTOF SCP, which enables deep
single-cell proteomics. These instruments helped
drive our robust growth in the fast-growing
proteomics market, including in areas such as
4D-Metabolomics and 4D-Lipidomics. We
are adding more features such as sample prep
capabilities and automation to this proteomics
platform to address rapidly increasing demand.
In spatial and single-cell biology, an area of
widespread basic and translation research
interest, our three platforms – Canopy
Biosciences, Vutara and Acuity Spatial Genomics
– are introducing significant innovations that
leverage Bruker’s strength in fluorescence
imaging to enable spatial biology and cellular
analysis in situ. Our technology can offer
subcellular and even super-resolution, along
with the high-plex targeted spatial proteomics
enabled by our Canopy ChipCytometry™ kits,
and Acuity is making strides in 3D genome
analysis in situ.
Consumables,
Software, Service &
Aftermarket
Consumables, assays,
services, libraries & scientific
software
Next-gen
Nanomaterials
Research & Semi
Metrology
Enabling R&D and QC of
next-gen logic, memory,
displays, renewable energy,
nanotools and nanomaterials
Spatial & Single-Cell
Biology and
Cellular Analysis
Next-gen super-res
microscopy & cytometry
for immunology, oncology,
single-cell and subcellular
spatial biology and targeted
multiomics
Unbiased
Proteomics &
Multiomics
Aftermarket
Biopharma &
Applied
Next-gen Nano
& Semi Tools
Microbiology &
Molecular Dx
Spatial &
Single-Cell Biology
and Cellular Analysis
Unbiased 4D
Proteomics & 4D
Multiomics, Functional
Structural Biology
MS and NMR solutions for
proteomics, multiomics,
tissue SpatialOMx,
functional structural biology,
biomolecular condensates
Biopharma & Applied
High-value NMR, MS and
FTIR/NIR solutions for drug
discovery, development and
pharma PAT; Applied food
analysis and forensics
Microbiology, Viral &
Molecular Diagnostics
High-value solutions for
faster, accurate and broadly
scalable infectious disease
diagnostics, now including
viral MDx
(1) For a reconciliation to GAAP, please see our Q4 2021 earnings press release at ir.bruker.com
(2) For the Company’s outlook and organic revenue growth, we are not able to provide without unreasonable effort the most directly comparable GAAP financial
measures, or reconciliations to such GAAP financial measures on a forward-looking basis.
Expanding our High-Growth,
High-Margin Initiatives with
Project Accelerate 2.0
In addition to our focus on two potential
breakout opportunities, we invest in other
Project Accelerate 2.0 initiatives. Let me share
a few examples of our success:
We are proud that in 2021 we achieved further
U.S. bookings for our Ultra-High Field GHz-class
NMR systems, which can enable functional
structural biology and advanced materials
science research. In 2021, the National Science
Foundation funded a consortium, the Network
for Advanced NMR (NAN), with a $40 million
award, and we received GHz-class system
orders from the University of Wisconsin-
Madison’s National Magnetic Resonance
Facility for solid-state NMR research and from
the University of Georgia for solution-state
NMR studies.
In clinical microbiology, we received U.S. Food
& Drug Administration (FDA) approval for the
launch of our MALDI BioTyper Sepsityper®
kit at the end of 2020. Sepsityper’s ability to
quickly identify more than 425 microorganisms
from a positive blood culture seems appealing
to U.S. customers, and with this launch our
MALDI BioTyper platform in North America
saw order growth year-over-year of more than
50% in 2021. We sold more than 600 MALDI
Biotyper units globally in 2021, leading to an
installed base of over 5,000 units.
Lastly, we endeavor to also democratize
the use of NMR with next-generation,
high performance, automated benchtop
FourierTM 80 FT-NMR systems. Early signs
are promising with more than 50 units sold in
2021. We anticipate the worldwide roll-out of
the FourierTM 80 in 2022, aided by additional
functionality and new automation capabilities,
and we are encouraged to see strong demand
also in industrial and applied markets.
Sustained Focus on
Operational Excellence
Combined with our strategic focus on revenue
growth through Project Accelerate 2.0, we
continue an unrelenting focus on Operational
Excellence, the second pillar of our strategy.
This pillar concentrates our commercial,
R&D, and operations teams on productivity
enhancements and operational efficiency
improvements in every area of our business.
Importantly, these changes also contribute to
further improving the quality and robustness
of our systems and to expanding our operating
margins in the future.
Environmental, Social and
Governance Update
At Bruker, we have a rich history of supporting
environmental sustainability initiatives across
our businesses. Recently, in our BioSpin Group,
our newly expanded facilities in Germany and
Switzerland introduced significant changes
to reduce CO2 emissions and lower energy
consumption, reliquefy helium, and reduce
single-use plastics across the group. At the
corporate level, we continue to strengthen
corporate governance practices, including a
long-standing commitment to gender diversity.
In 2022, we intend to formalize our company-
wide reporting on ESG topics, with the aim of
publishing our first Sustainability Report in 2022.
Capital Deployment
In 2021 we continued the disciplined pursuit of
M&A opportunities; late in the year, our BioSpin
group acquired MOLECUBES, a Belgian
company with innovative benchtop, preclinical
nuclear molecular imaging systems. Early in
2022, we already completed several technology
and business acquisitions in proteomics,
biopharma and applied markets to grow our
solutions portfolio in these areas.
Stronger cash flow in 2021 supported $92
million in capital investments, designed to
add production capacity, improve efficiency,
and advance innovation. For 2022, our Board
of Directors approved an increase to our
annual dividend by 25% to $0.20, and in
2021, we returned more than $177 million
to shareholders through dividends and
share repurchases, after in May 2021, our
Board approved a two-year share repurchase
authorization for up to $500 million.
Taking advantage of historically low interest
rates, in December 2021 we issued $500
million in 10-year senior notes denominated in
Swiss Francs and Euros in a private placement
offering locking in fixed rates around 1% for
10 years, securing capital for further strategic
investments. Lastly, we were pleased that
Bruker Corporation was added to the S&P
MidCap 400 index, affirming our company’s
growth and market performance.
Financial Outlook for 2022
We entered 2022 with the highest backlog in
our history, more than $2 billion, a testament
to strong customer demand for our solutions
as well as our careful navigation of on-going
supply chain challenges. The 2022 outlook
we provided in mid-February anticipates high
single-digit organic revenue growth for the
year, which is in line with our mid-term outlook
for revenue of $2.7 - $3.0 billion by 2024. We
intend to continue key investments in our
Project Accelerate 2.0 initiatives and further
build-out our commercial capabilities to respond
to growing new customer needs and growing
market opportunities. We expect moderate
expansion in our non-GAAP operating margins,
as well as strong year-over-year non-GAAP EPS
growth in 2022.
I would like to thank our valued customers, our
committed Bruker colleagues, our shareholders,
collaborators and business partners for their
dedication and support over the past year, and
we are looking forward to reporting on our
future progress.
Sincerely,
Frank H. Laukien, Ph.D.
Chairman, President and Chief Executive Officer
April, 2022
Forward-Looking Statements
Any statements contained in this letter which
do not describe historical facts may constitute
forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including
statements regarding our Project Accelerate
2.0 initiatives, our future sales and our future
non-GAAP operating margins and non-GAAP
EPS growth. Any forward-looking statements
contained herein are based on current
expectations, but are subject to risks and
uncertainties that could cause actual results to
differ materially from those indicated, including,
but not limited to, those risks and uncertainties
identified in our filings with the SEC, including,
without limitation, our annual report on Form
10-K for the year ended December 31, 2021,
as may be updated by our quarterly reports on
Form 10-Q. We expressly disclaim any intent
or obligation to update these forward-looking
statements other than as required by law.
Microbiology and Diagnos-
tics – Bruker’s broad range
of specialized technologies
sheds light on the microbial
world
Meeting a new Milestone in Clinical
Microbiology for MALDI Biotyper®
2021 saw the MALDI Biotyper® sirius and sirius
one become the leading systems of our MBT
portfolio for microbial identification. These new
systems demonstrate clear improvements
to our prior systems as well as strong
differentiation to our competitors resulting from
upgrades to the electronics, faster speed to
results, higher through-put, and improved user
interface with an LED strip, while remaining a
true bench top system. The increased adoption
of our latest systems further enforces our
position as the market leader for MALDI-based
microbial identification with respect to market
share and technology leadership. In November
2021 we passed an important milestone of
5,000 paid-for MALDI Biotyper® systems in the
field. We benefited from large modernization
projects in the healthcare systems especially in
the U.S. and China, where we delivered to both
the hospital market as well as large reference
laboratories in these regions.
Our installed MALDI Biotyper® systems
are often workhorses in the central clinical
microbiology laboratories and are often used
seven days per week. With the increasing use
and throughput of our systems, we see our
associated consumables demand increasing
year on year and our solutions are responsible
for providing in excess of 100,000,000 microbial
identifications every year.
Late December 2020 we received FDA
clearance of our MBT Sepsityper® Kit US IVD
and in 2021 we made the formal product launch
in the US market to provide a solution of our
fast microbial identification from positive blood
culture samples. This supports our fight against
Sepsis, which is a life-threatening condition
caused by the body’s immune response to an
infection and results in nearly 270,000 deaths
in the U.S. every year. Our Sepsityper® Kit is
cost-effective for the laboratories, improves
the turnaround time of urgent patient samples,
conserves healthcare resources and improves
patient outcomes. We also believe that this
compelling workflow creates significant
tailwind for our MBT system sales in the USA.
Bruker Microbiology & Diagnostics have
built expertise in MALDI-TOF technology,
software development and microbial library
knowledge as well as a deep understanding of
microbiology. Providing these skills, expertise
and knowledge under a single roof enables
Bruker to drive our mass spectrometry
technology deeper in the microbiology space
and beyond microbial identification. Clinical
Microbiology relevant solutions include
rapid sepsis testing with the Sepsityper kit,
selective testing of antibiotic resistance with
MBT-STAR® assay family and we continued
to expand our portfolio in 2021 with the
launch of the MBT Mycobacterial Kit (RUO)
for mycobacteria sample preparation and the
MBT Lipid XtractTM Kit (RUO) as a solution
for lipid-based antibiotic resistance testing for
colistin-resistance gram-negative bacteria. The
MBT Lipid XtractTM Kit leverages the unique
negative ion mode of MALDI Biotyper® sirius
which again allows us to continue to change
microbiology.
Expanding the Horizons
of Single Cell Research
Generally considered impossible just several
years ago, the deep, unbiased proteomics
analysis of single cells is a rapidly developing
field with the potential to make important
contributions to the understanding of cellular
biology and heterogeneity. “Single-cell
proteomics takes centre stage” was the
headline of the Nature Technology Feature
on September 20, 2021. Unlike other omics
technologies, single cell proteomics is hindered
by a lack of amplification techniques for protein
molecules so that any technique to detect
proteins must be sensitive enough to identify
them in the tiny amounts present in a single cell.
In June 2021, Bruker Daltonics launched the
timsTOF SCP mass spectrometer, which
enables ultra-high unbiased sensitivity analysis
with the ground-breaking design of a novel
ion source. CCS-enabled TIMS (Trapped Ion
Mobility Spectrometry) accumulates and
concentrates ions of a given mass and mobility,
while removing chemical noise, yielding
increases in sensitivity and speed. The ultimate
sensitivity of the timsTOF SCP is further
enhanced by the speed and sensitivity of the
TIMS-based PASEF and dia-PASEF methods,
making the timsTOF SCP ideally suited for the
task of identifying the very small quantities of
proteins present in a single cell. Bruker has
acquired new tools for high-capacity sample
separation using PepSep columns and the
nanoElute II nanoflow UPLC system. These
developments enable unbiased proteomics
at the true single cell level with excellent
reproducibility, robustness, and unbiased
identification and quantification of about 1500
different protein groups per cell for the first time.
Nature https://www.nature.com/articles/d41586-021-02530-6
Genomic information is translated into
a unique proteome spanning several
orders of magnitude in abundance
>200 post translational modifications
(PTMs) with hundreds of potential sites
per protein driving protein activity and
interactions, as well as cell function.
Cell function is driven by the exact
protein composition such as protein
abundance, PTMs, and interactions
Single Cell
Harness the power of 4D-Proteomics for single cell research.
With a new ion source concept for 5 times greater ion-transfer together with the TIMS based time-focusing effect and higher fidelity separation of noise
from signal as well as the proven acquisition speed in PASEF (> 100 Hz), the timsTOF SCP is unique in it’s class. Taking single cell proteomics research,
PTM analysis, and immunopeptidomics to the next level for a holistic approach in proteogenomics.
Enabling Deeper, Quantitative Analysis
in Spatial Biology
Bruker continues to expand its rich portfolio
of life sciences technologies into the realm of
spatial biology, a growing field that is mapping
the geography of cells and tissues. Our spatial
biology offerings transcend the central dogma
of biology – the flow of genetic information
from DNA to RNA, to protein – enabling a
holistic and correlative view of biological
processes. Our rapid technological advances
have supported progressively sophisticated and
robust genomic, transcriptomic, and proteomic
analyses.
With the acquisition of Canopy Biosciences,
we are enabling researchers to perform highly
multiplexed, targeted spatial proteomics
measurements on tissues and single-cell
proteomic phenotyping of suspended cells.
Canopy’s ChipCytometry™ instruments and
assay kits provide quantitative imaging of
high-plex targeted protein biomarkers on a
single tissue section at single-cell and sub-
cellular spatial resolution. The proprietary and
unique 8-log high dynamic range combined
with superior high-resolution imaging
technology allows researchers to perform
best-in-class, quantitative spatial biology
yielding absolute cell counts and identification
of rare cells. CellScape™, the next-generation
ChipCytometry™ instrument, advances the
cutting-edge in quantitative in situ spatial
phenotyping. This system delivers single-
cell, targeted spatial proteomics for high-
throughput whole-tissue analysis of the tumor
microenvironment, as well as deep immune
profiling for applications in immunology,
neuroscience, and infectious disease.
While our technologies continue to enable the
expansion of spatial proteomics applications,
we are also paving the way for emerging 3D
spatial genomics research within the nucleus.
Acuity Spatial Genomics is a new venture that
is developing the technologies to provide the
much-needed direct measurement and 3D
visualization of genome organization in situ,
at the single-cell and sub-cellular level, in a
timely and cost-effective way with OligoFISSEQ
technology. Researchers will gain a deeper
understanding of 3D chromatin architecture and
the transcription regulatory programs that drive
cell type, state, pathogenesis, and function.
These genomic insights can help further
the understanding of complex questions in
oncology, neuroscience, infectious disease, and
cell development.
Bruker is also enhancing basic academic
spatial omics research efforts with super-
resolution imaging solutions. The Vutara VXL™
is a versatile, single-molecule localization
microscope for fundamental nanoscale spatial
investigations in the genome, transcriptome,
and proteome, delivering nanoscale resolution
imaging and quantitative analysis.
Canopy’s ChipCytometry
platform enables high-
plex, quantitative spatial
imaging with sub-cellular
resolution. Image below
shows a human colon cancer
FFPE sample imaged with
Canopy’s Spatial Immune
Profiling Kit.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT of 1934
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
Commission File Number 000-30833
BRUKER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
Incorporation or organization)
40 Manning Road, Billerica, MA
(Address of principal executive offices)
04-3110160
(I.R.S. Employer
Identification No.)
01821
(Zip Code)
Title of each class
Common Stock
Registrant’s telephone number, including area code:
(978) 663-3660
Securities registered pursuant to Section 12(b) of the Act:
Trading Symbols(s)
Name of each exchange on which registered
BRKR
Securities registered pursuant to Section 12(g) of the Act: None
Nasdaq Global Select Market
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes ‘ No È
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 È 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 È No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 È
Non-accelerated filer ‘
‘
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 has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. È
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È
The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of June 30, 2021 (the last
business day of the registrant’s most recently completed second fiscal quarter) was $4,039,944,813 based on the reported last sale price on
the Nasdaq Global Select Market. The number of shares of the registrant’s common stock outstanding as of February 23, 2022 was
150,773,407.
Portions of the information required by Part III of this report (Items 10, 11, 12, 13 and 14) are incorporated by reference from
the registrant’s Definitive Proxy Statement on Schedule 14A for its 2022 Annual Meeting of Stockholders to be filed within 120 days
of the close of the registrant’s fiscal year.
DOCUMENTS INCORPORATED BY REFERENCE
BRUKER CORPORATION
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
Part I
Item 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2
Item 3
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4 Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part II
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . .
Item 7A Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . .
Item 9A Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C Disclosure Regarding Foreign Jurisdictions That Prevent Inspections . . . . . . . . . . . . . . . . . . . . . .
Part III
Item 10 Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13 Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . .
Item 14 Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part IV
Item 15 Exhibits, Financial Statements and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16 Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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1
Any statements contained in this Annual Report on Form 10-K that are not statements of historical fact may
be deemed to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Without limiting the foregoing,
the words “believe,” “anticipate,” “plan,” “expect,” “seek,” “may,” “will,” “intend,” “estimate,” “should,” and
similar expressions are intended to identify forward-looking statements. Any forward-looking statements
contained herein are based on current expectations but are subject to a number of risks and uncertainties.
Forward-looking statements include, but are not limited to, statements regarding the impact of COVID-19 on our
business operations, the impact of supply chain challenges, expectations regarding the global economy and
geopolitical tensions, our intentions regarding our intellectual property, the impact of government contracts and
government regulation, our working capital requirements and sufficiency of cash, our competition, the
seasonality of our business, the sufficiency of our facilities, our employee relations, the impact of legal or
intellectual property proceedings, the impact of changes to tax and accounting rules and changes in law, our
anticipated tax rate, our expectations regarding cash dividends, share repurchases, interest expense, interest rate
swap agreements, expenses and capital expenditures, the impact of foreign currency exchange rates and changes
in commodity prices, the impact of our restructuring initiatives and our expectations regarding backlog and
revenue. The factors that could cause actual future results to differ materially from current expectations include,
but are not limited to, risks and uncertainties related to the length and severity of the COVID-19 pandemic, the
impact of the pandemic on global economic conditions, the length and severity of any resulting recession, the
impact of supply chain challenges including inflationary pressures, the impact of geopolitical tensions and any
resulting sanctions, continued volatility in the capital markets, the integration and assumption of liabilities of
businesses we have acquired or may acquire in the future, our restructuring and cost-control initiatives, changing
technologies, product development and market acceptance of our products, the cost and pricing of our products,
manufacturing and outsourcing, competition, dependence on collaborative partners, key suppliers and third party
distributors, capital spending and government funding policies, changes in governmental regulations, intellectual
property rights, litigation, exposure to foreign currency fluctuations, our ability to service our debt obligations
and fund our anticipated cash needs, the effect of a concentrated ownership of our common stock, loss of key
personnel, payment of future dividends and other factors. Many of these factors are described in more detail in
this Annual Report on Form 10-K under Item 1A. “Risk Factors” and from time to time in other filings we may
make with the Securities and Exchange Commission (the “SEC”). While we may elect to update forward-looking
statements in the future, we specifically disclaim any obligation to do so, even if our estimates change, and
readers should not rely on those forward-looking statements as representing our views as of any date subsequent
to the date of the filing of this report.
References to “we,” “us,” “our,” “management” or the “Company” refer to Bruker Corporation and, in some
cases, its subsidiaries, as well as all predecessor entities.
Our principal executive offices are located at 40 Manning Road, Billerica, MA 01821, and our telephone
number is (978) 663-3660. Information about Bruker Corporation is available at www.bruker.com. The
information on our website is not incorporated by reference into and does not form a part of this report. All
trademarks, trade names or copyrights referred to in this report are the property of their respective owners.
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ITEM 1 BUSINESS
Our Business
PART I
We are a developer, manufacturer and distributor of high-performance scientific instruments and analytical
and diagnostic solutions that enable our customers to explore life and materials at microscopic, molecular and
cellular levels. Many of our products are used to detect, measure and visualize structural characteristics of
chemical, biological and industrial material samples. Our products and solutions 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.
Our technology platforms include magnetic resonance technologies, mass spectrometry technologies, gas and
liquid chromatography, triple quadrupole mass spectrometry technologies, X-ray technologies, spark-optical
emission spectroscopy, atomic force microscopy, stylus and optical metrology technology, fluorescence optical
microscopy, and infrared and Raman molecular spectroscopy technologies. Our product portfolio also includes
testing solutions used in microbiology and infectious disease diagnostics, including our MALDI Biotyper rapid
pathogen identification platform and related test kits, DNA test strips and fluorescence-based polymerase chain
reaction (PCR) technology for selected infectious disease applications. We develop, manufacture and distribute a
range of field analytical systems for chemical, biological, radiological, nuclear and explosives, or CBRNE,
detection. We also develop, manufacture and market low temperature superconducting materials and devices
based primarily on metallic low temperature superconductors. Our corporate headquarters are located in
Billerica, Massachusetts. We maintain major technical and manufacturing centers in Europe, North America and
Southeast Asia, and have sales offices located throughout the world.
We originally were incorporated in Massachusetts in February 1991, as Bruker Federal Systems
Corporation. In February 2000, we reincorporated in Delaware as Bruker Daltonics Inc. In July 2003, we merged
with Bruker AXS Inc., and we were the surviving corporation in that merger. In connection with that merger, we
changed our name to Bruker BioSciences Corporation and formed two operating subsidiaries, Bruker Daltonics
and Bruker AXS. In July 2006, we acquired Bruker Optics Inc. In February 2008, we acquired the Bruker
BioSpin group of companies and changed our name to Bruker Corporation.
Business Segments
We have four operating segments, Bruker BioSpin Group, Bruker CALID Group, Bruker Scientific
Instruments (BSI) Nano Segment and Bruker Energy & Supercon Technologies (BEST). We have three reportable
segments, BSI Life Science, BSI Nano, and BEST. For financial reporting purposes, the Bruker BioSpin and
Bruker CALID Groups are aggregated into the BSI Life Science reportable segment because they have similar
economic characteristics, production processes, service offerings, types and classes of customers, methods of
distribution and regulatory environments.
BSI Life Science Segment
Bruker BioSpin Group
The Bruker BioSpin Group comprises the Bruker Magnetic Resonance, Applied Industrial and Clinical,
Preclinical Imaging and Service and Lifecycle Support Divisions and designs, manufactures and distributes
enabling life science tools based on magnetic resonance technology. Magnetic resonance is a natural
phenomenon occurring when a molecule placed in a magnetic field gives off a signature radio frequency. The
signature radio frequency is characteristic of the particular molecule and provides a multitude of precise chemical
and structural information. Depending on the intended application, we market and sell to our customers an NMR
system or an EPR system (each as defined below).
Bruker BioSpin also manufactures and sells single and multiple modality systems using MRI, PET, SPECT,
CT and MPI technologies (each as defined below). Bruker BioSpin’s products, which have particular application
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in structural proteomics, drug discovery, pharmaceutical and biotechnology research and production, and the
food and materials science fields, provide customers with the ability to determine the structure, dynamics, and
function of specific molecules, such as proteins, and to characterize and determine the composition of mixtures.
The majority of Bruker BioSpin’s customers are academic and government research facilities. Other
customers include pharmaceutical and biotechnology companies; chemical, food and beverage, clinical and
polymer companies; and nonprofit laboratories.
During 2021, we further expanded our business with additional GHz class systems, which represent the top
end of our product portfolio. We obtained customer acceptance on four such systems (two 1.2 GHz and two 1.0
GHz). We also achieved major technical milestones in the automatic diagnosis and calibration capabilities of our
systems, enabling new services like predictive maintenance. During 2021, we also successfully scaled up our
benchtop Fourier NMR platform. With these Fourier NMR systems and solutions we address multiple end
markets including teaching, academic research, pharmaceuticals, food and various industrial applications.
Bruker BioSpin Group’s instruments are based on the following technology platforms:
• NMR—Nuclear magnetic resonance;
• EPR—Electron paramagnetic resonance;
• MRI—Magnetic resonance imaging;
• MPI—Magnetic particle imaging;
• PET—Positron emission tomography;
•
SPECT—Single photon emission tomography; and
• CT—Computed tomography.
NMR is a qualitative and quantitative analytical technique that is used to determine the molecular structure
and purity of a sample. Molecules are placed in a magnetic field and give off a radio frequency signature that is
recorded by a sensitive detector. Analysis software helps to determine the molecular structure of the sample. The
NMR technique is used in academia, by pharmaceutical, biotechnology, food and beverage and clinical
companies, and by other industrial users in life science and material science research.
EPR is a process of absorption of microwave radiation by paramagnetic ions or molecules with at least one
unpaired electron that spins in the presence of a static magnetic field. EPR detects unpaired electrons
unambiguously, whereas other techniques can only provide indirect evidence of their presence. In addition, EPR
can identify the paramagnetic species that are detected, which present information on the molecular structure
near the unpaired electron and give insight into dynamic processes such as molecular motions or fluidity. Our
EPR instruments are used for a wide range of applications, including advanced materials research, materials
analysis and quality control.
MRI is a process of creating an image from the manipulation of hydrogen atoms in a magnetic field. In the
presence of an external magnetic field, atoms will align with or against the external magnetic field. Application
of a radio frequency causes the atoms to jump between high and low energy states. MRI and magnetic resonance
spectroscopy, or MRS, include many methods including diffusion-weighted, perfusion-weighted, molecular
imaging and contrast-enhance. MRI offers high resolution morphologic information, as well as functional,
metabolic or molecular information. Customers use our MRI systems in pharmaceutical research, including
metabolomics, to study a number of diseases, including diabetes, neurology, oncology and cardiovascular
disorders.
MPI is a process of creating an image from magnetic particles administered to the body of an animal. The
magnetic particles are manipulated in a combination of oscillating magnetic fields exhibiting a field free zone.
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The response of the particles allows a real time 3D data set acquisition of the whole body of an animal, showing
the contrast agent distributing in and flowing through the body. This imaging modality is used to detect
cardiovascular disorders.
PET is a process of creating an image from positrons after administration of a positron emitting
radionuclide to the body of an animal. Annihilation of the positron produces two photons which show an angle of
180° between them, distinguishing these photons from photons originating from other sources. The PET tracer
enriches in certain regions of interest within the body and gains molecular information from the animal in vivo.
This has widespread applications, most importantly for oncology, inflammation, neurology and cardiovascular
disorders, as well as metabolic disease, drug discovery and bone disease.
SPECT uses a contrast agent containing radionuclides which directly emit single photons. The contrast
agent enriches in certain parts of the body of an animal and generates images of the radionuclide distribution in
the body. SPECT has widespread application in animal investigations in vivo, most importantly in oncology,
neurology and cardiovascular disorders.
CT is a technology based on X-rays which are used to generate a complete 3D data set. The most important
applications are tissue sample analysis or non-invasive in vivo animal imaging. CT offers the highest spatial
resolution of all preclinical imaging modalities and is especially useful to generate morphological information
about the object or animal under investigation. CT is being used in a wide range of preclinical investigations in
the fields of bone-orthopedics, cardiology, pulmonology, oncology and metabolism among others.
The Bruker BioSpin Group also offers a range of services, product lifecycle support, scientific software and
workflow solutions to customers who use Bruker BioSpin products.
Bruker CALID Group
The Bruker CALID Group comprises the Bruker Daltonics and Bruker Optics Divisions. The Bruker
Daltonics Division primarily designs, manufactures and distributes life science mass spectrometry, or MS,
instruments that can be integrated and used along with sample preparation or chromatography instruments to
design an analytical workflow and mass spectrometry-based and molecular diagnostic solutions for microbiology
and infectious disease diagnostics. Bruker CALID’s life science mass spectrometry products are used in research,
pharmaceutical and biotechnology development. Bruker CALID’s microbiology and infectious disease solutions
are used primarily in the human and veterinary clinical diagnostic and food microbiology settings.
Mass spectrometers are sophisticated devices that measure the mass or weight of a molecule and can
provide accurate information on the identity, quantity and primary structure of the molecule. Mass spectrometry-
based solutions often combine advanced mass spectrometry instrumentation, automated sampling and sample
preparation robots, reagent kits and other disposable products used in conducting tests, or assays, and
bioinformatics software. We offer mass spectrometry systems and integrated solutions for applications in
multiple existing and emerging life science markets and chemical and applied markets, including expression
proteomics, clinical proteomics research, metabolic and peptide biomarker profiling, drug discovery and
development, molecular diagnostics research and molecular and systems biology, as well as basic molecular
medicine research. Our timsTOF Pro mass spectrometer offers workflow solutions for proteomics research. Our
MALDI Biotyper mass spectrometry solution and test kits, DNA test strips and fluorescence-based PCR
technologies are designed for in-vitro diagnostic (IVD) use in clinical microbiology markets in certain
configurations and certain countries, where regulatory approvals have been achieved. In addition to culture-based
microbial identification with the MALDI Biotyper platform, the Genotype and Fluorotype molecular diagnostics
(MDx) kits enable a culture-free detection and analysis of microbes and viruses directly from patient samples
with a special focus on tuberculosis, transplant diagnostics and sexually-transmitted diseases.
Molecular Diagnostics utilize Polymerase Chain Reaction (PCR) assays and systems to provide diagnostic
solutions for a number of different disease states, including Respiratory, Mycobacteria (including Tuberculosis),
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Virology, Safety of Immunocompromised patients, Sexually Transmitted Infections, Gastroenteric Diseases as
well as other Microbiology tests. Depending on the assay being used, the technology enables users to ascertain
basic identification of a certain infection, distinguish infections which can cause similar symptoms and detect
specific microbial resistance, all from a single sample. The GenoType portfolio has been established for over 30
years and has been successful in mycobacteria and tuberculosis detection, differentiation, and identification of
antibiotic resistance markers. The portfolio now includes FluoroType®, using fluorescence-based real-time PCR
technology, and more recently we have also developed LiquidArray® assays based on melt curve analysis for
optimized asymmetrical PCR technology. LiquidArray® uses light-on-off probes, providing a powerful
technology to identify a broad number of indicators for different infections or resistance markers from a single
sample, providing greater depth of information. We are applying this approach to a new portfolio of syndromic
panels in development. As a producer of extraction chemistry and instrumentation alongside integrated
thermocyclers, software and a range of assays, Bruker brings complete diagnostic solutions to the Molecular
Diagnostics market.
The Bruker Optics Division manufactures and distributes research, analytical and process analysis
instruments and solutions based on infrared and Raman molecular spectroscopy technologies. These products are
utilized in industry, government and academia for a wide range of applications and solutions for life science,
pharmaceutical, food and agricultural analysis, quality control and process analysis applications. Infrared and
Raman spectroscopy are widely used in both research and industry as simple, rapid, nondestructive and reliable
techniques for applications ranging from basic sample identification and quality control to advanced research.
The Bruker Optics Division also utilizes Fourier transform and dispersive Raman measurement techniques on an
extensive range of laboratory and process spectrometers. The Bruker Optics Division’s products are
complemented by a wide range of sampling accessories and techniques, which include, among others,
microanalysis and high-throughput screening to help users find suitable solutions to analyze their samples
effectively.
Customers of our Bruker CALID Group include pharmaceutical, biotechnology and diagnostics companies,
contract research organizations, academic institutions, medical schools, nonprofit or for-profit forensic
laboratories, agriculture, food and beverage safety, environmental and clinical microbiology laboratories,
hospitals and government departments and agencies.
During 2021, we launched a number of new mass spectrometry-based solutions and additional workflows,
including the timsTOF SCP (Single Cell Proteomics) mass spectrometer enabling researchers to analyze proteins
within a single cell. In our microbiology and molecular diagnostics markets, we introduced the MALDI Biotyper
Sirius broadly into the market. In our molecular diagnostics portfolio we launched two assays in the field of
respiratory disease testing, primarily covering SARS-CoV 2 testing for the diagnosis of COVID-19 infection.
The Fluorotyper-SARS-CoV 2 plus kit allows for a real-time PCR detection of the SARS-CoV 2 virus. It detects
two viral genes in parallel as a mechanism for high sensitivity. The additional FluoroType® SARS-CoV-2/Flu/
RSV assay is a multiplex real-time PCR kit that detects four viruses of clinical significance causing respiratory
disease during the winter season: SARS-CoV 2, influenza A, influenza B and respiratory syncytial virus (RSV).
During 2020, the Bruker Optics division launched LUMOS II, a fully automated stand-alone FTIR imaging
microscope. LUMOS II provides ultrafast FTIR imaging capabilities based on modern focal plane array (FPA)
detector technology. The novel LUMOS II is designed to identify particles, to determine coatings and
contaminations, and to reveal the polymeric composition of plastics.
The Bruker CALID Group’s instruments are based on the following technology platforms:
• MALDI-TOF—Matrix-assisted laser desorption ionization time-of-flight mass spectrometry,
including tandem time-of-flight systems (MALDI-TOF);
• ESI-TOF—Electrospray ionization time-of-flight spectrometry, including trapped ion mobility (TIMS)
based on ESI-quadrupole-TOF mass spectrometry (timsTOF);
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• MRMS—Magnetic resonance mass spectrometry, including hybrid systems with a quadrupole front
end (Q-q-MRMS);
•
ITMS—Ion trap mass spectrometry;
• GC-MS—Gas chromatography-mass spectrometry systems utilizing triple-quadrupole time-of-flight
mass spectrometry;
• LC-MS—Liquid chromatography-mass spectrometry systems utilizing triple-quadrupole time-of flight
mass spectrometry;
• FT-IR—Fourier transform-infrared spectroscopy;
• NIR—Near-infrared spectroscopy; and
• Raman—Raman spectroscopy.
MALDI-TOF mass spectrometers utilize an ionization process to analyze solid samples using a laser that
combines high sample throughput with high mass range and sensitivity. Our MALDI-TOF mass spectrometers
are particularly useful for applications in clinical diagnostics, environmental and taxonomical research and food
processing and quality control. Specific applications include: oligonucleotide and synthetic polymer analysis;
protein identification and quantification; peptide de novo sequencing; determination of post-translational
modifications of proteins; interaction proteomics and protein function analysis; drug discovery and development;
and fast body fluid and tissue peptide or protein biomarker detection. MALDI mass spectrometry allows users to
classify and identify microorganisms quickly and reliably with minimal sample preparation efforts and life cycle
costs. Our MALDI Biotyper solution, which serves the clinical microbiology market, enables identification,
taxonomical classification or dereplication of microorganisms like bacteria, yeasts and fungi.
ESI-TOF mass spectrometers utilize an electrospray ionization process to analyze liquid samples. This
ionization process, which does not dissociate the molecules, allows for rapid data acquisition and analysis of
large biological molecules. ESI-TOF mass spectrometers are particularly useful for: identification, protein
analysis and functional complex analysis in proteomics and protein function; molecular identification in
metabolomics, natural product and drug metabolite analysis; combinatorial chemistry high throughput screening;
and fast liquid chromatography mass spectrometry, or liquid chromatography mass spectrometry (LC-MS), in
drug discovery and development.
MRMS systems utilize high-field superconducting magnets to offer the highest resolution, selectivity, and
mass accuracy currently achievable in mass spectrometry. Our systems based on this technology often eliminate
the need for time-consuming separation techniques in complex mixture analyses. In addition, our systems can
fragment molecular ions to perform exact mass analysis on all fragments to determine molecular structure.
MRMS systems are particularly useful for: the study of the structure and function of biomolecules, including
proteins, DNA and natural products; complex mixture analysis including body fluids or combinatorial libraries;
high-throughput proteomics and metabolomics; and top-down proteomics of intact proteins without the need for
enzymatic digestion of the proteins prior to analysis. We offer next-generation hybrid MRMS systems that
combine a traditional external quadrupole mass selector and hexapole collision cell with a high-performance
MRMS for further ion dissociation, top-down proteomics tools and ultra-high resolution detection.
ITMS systems collect all ions simultaneously, which improves sensitivity relative to previous quadrupole
mass spectrometers. Ion trap mass spectrometers are particularly useful for sequencing and identification based
on peptide structural analysis, quantitative liquid chromatography mass spectrometry, identification of
combinatorial libraries and generally enhancing the speed and efficiency of the drug discovery and development
process.
GC-MS systems combine the features of gas chromatography and mass spectrometry to identify different
substances within a test sample. The two components, used together, allow for a finer degree of substance
7
identification than either system when used separately. The result is a quantitative analysis of the components
and the mass spectrum of each component. Our GC-MS systems are available in triple quadrupole configurations
and can be configured with a variety of options to suit a range of applications. Our GC-MS systems have
applications in food and product safety, forensics, clinical and toxicology testing and environmental,
pharmaceutical and chemical analysis.
LC-MS systems combine the separation features of liquid chromatography with the molecular identification
features of mass spectrometry to separate, identify and quantify different substances within a test sample. As a
complementary technique to GC-MS, which analyzes volatile compounds, LC-MS can be used to analyze a wide
range of non-volatile compounds in complex samples. Our LC-MS systems are available in a wide range of
configurations to suit a user’s specific needs. Although primarily used for life science applications, our LC-MS
systems also have applications in food and product safety, forensics and clinical and toxicology testing, as well
as environmental, pharmaceutical and chemical analysis.
FT-IR spectrometers utilize the mid- and far-infrared regions of the electromagnetic spectrum. Our FT-IR
systems are commonly used for various quality control and materials research applications.
NIR spectrometers utilize the near-infrared region of the electromagnetic spectrum. Our NIR instruments
are primarily used for quality and process control applications in the pharmaceutical, food and agriculture and
chemical industries. The pharmaceutical industry is the leading user of NIR instruments, and applications include
quality control, research and development and process analytical technology. The food and agricultural industry
is the second largest user of NIR instrumentation, with an increasing demand for food, feed and beverage quality
control.
Raman spectroscopy provides information on molecular structure. The mechanism of Raman scattering is
different from that of infrared absorption, in that Raman and IR spectra provide complementary information.
Raman is useful for the identification of both organic and inorganic compounds and functional groups. It is a
nondestructive technique and can be used for the analysis of both liquids and solids. Raman is well suited for use
in the polymer and pharmaceutical industries, and has applications in the metals, electronics and semiconductors
industries. The technique also has applications in life sciences, forensics and artwork authentication.
Additionally, the Bruker Detection product line offers a wide range of portable analytical and bioanalytical
detection systems and related products for CBRNE detection. Our customers use these devices for nuclear,
biological agent and chemical agent defense applications, anti-terrorism, law enforcement and process and
facilities monitoring. Our CBRNE detection products use many of the same technology platforms as our life
science products, as well as additional technologies, including infrared stand-off detection and ion mobility
spectrometry, for handheld chemical detectors. We also provide integrated, comprehensive detection suites that
include our multiple detection systems, consumables, training and simulators.
BSI Nano Segment
The BSI Nano Segment comprises the Bruker AXS, Bruker Nano Analytics, Bruker Nano Surfaces and
Metrology, Fluorescence Microscopy and Canopy Divisions. The Bruker AXS Division designs, manufactures
and distributes advanced X-ray instruments that use electromagnetic radiation with extremely short wavelengths
to determine the characteristics of matter and the three-dimensional structure of molecules. This includes a
product portfolio of instruments based on X-ray fluorescence spectroscopy (XRF), X-ray diffraction (XRD) and
X-ray micro computed tomography (μCT), or X-ray microscopy, as well as spark optical emission spectroscopy
systems (S-OES) used to analyze the concentration of elements in metallic samples.
The Bruker Nano Analytics Division manufactures and markets analytical tools for electron microscopes,
including energy-dispersive X-ray spectrometers (EDS), electron backscatter diffraction systems (EBSD) and
μCT accessories, as well as mobile and bench top micro X-ray fluorescence (μXRF), total reflection X-ray
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fluorescence spectrometers (TXRF) and handheld, portable and mobile X-ray fluorescence (HMP-XRF)
spectrometry instruments.
The Bruker Nano Surfaces and Metrology Division’s products include atomic force microscopy
instrumentation (AFM). Such instruments provide atomic or near atomic resolution of surface topography and
nanoscale, mechanical, electrical and chemical information using nano scale probes. The Bruker Nano Surfaces
and Metrology Division also provides non-contact nanometer resolution solution topography through white light
interferometry and stylus profilometry. In addition, the division manufacturers and markets automated X-ray
metrology, automated AFM defect-detection and photomask repair and cleaning equipment for semiconductor
process control.
The Fluorescence Microscopy Division provides advanced optical fluorescence microscopy instruments
with multi-photon, multipoint scanning confocal 3D super-resolution, light-sheet modalities for studies in life
science applications.
The Canopy Division provides products and services to support the multi-omics needs of researchers in
translational research, drug and biomarker discovery.
Customers of our 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 analysis.
During 2021, we launched several new products including IconIR, nanoIR, NanoWizard V BioAFM,
InSight CAP-HP automated AFM, Sirius XRD -X-Ray CD metrology, Sirius RF, WC-2200 Wafer Clean, Q4
POLO elemental analysis and multiphoton 3P. We acquired Scientific Computing International (SCI), which was
a leading innovator and provider of advanced metrology systems and analysis software to major companies in the
semiconductor, optoelectronics, data storage, display, MEMS, and optical coating industries. And we also
acquired SVXR, Inc. which engages in researching, developing, designing, engineering, and manufacturing
automated x-ray inspection technology and providing analysis toolkits, bringing high speed inspection and
metrology technology to the semiconductor packaging industry with its revolutionary HR-AXI technology.
The BSI Nano Segment systems are based on the following technology platforms:
• XRD—Polycrystalline X-ray diffraction, often referred to as X-ray diffraction;
• XRF—X-ray fluorescence, also called X-ray spectrometry, including handheld XRF systems;
•
•
SC-XRD—Single crystal X-ray diffraction, often referred to as X-ray crystallography;
μCT—X-ray micro computed tomography, X-ray microscopy;
• EDS—Energy dispersive X-ray spectroscopy on electron microscopes;
• EBSD—Electron backscatter diffraction on electron microscopes;
•
S-OES—Spark optical emission spectroscopy;
• CS/ONH—Combustion analysis for carbon, sulfur, oxygen, nitrogen, and hydrogen in solids;
• AFM—Atomic force microscopy;
• FM—Fluorescence microscopy;
•
SOM—Stylus and optical metrology;
• TMT—Tribology and mechanical test systems for analysis of friction and wear;
• NanoIR—Nanoscale infrared spectroscopy;
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• Alicona—Focus variation optical technology for non-contact dimensional metrology; and
• Canopy—Multiplexed fluorescence-based single cell imaging for suspended cells and tissues as well
as multi-omics sample characterization.
XRD systems investigate polycrystalline samples or thin films with single wavelength X-rays. The atoms in
the polycrystalline sample scatter the X-rays to create a unique diffraction pattern recorded by a detector.
Computer software processes the pattern and produces a variety of information, including stress, texture,
qualitative and quantitative phase composition, crystallite size, percent crystallinity and layer thickness,
composition, defects and density of thin films and semiconductor material. Our XRD systems contribute to a
reduction in the development cycles for new products in the catalyst, polymer, electronic, optical material and
semiconductor industries. Customers also use our XRD systems in academic and government research, as well as
in a variety of other fields, including forensics, art and archaeology.
XRF systems determine the elemental composition of a material and provide a full qualitative and
quantitative analysis. Our XRF systems direct X-rays at a sample, and the atoms in the sample absorb the X-ray
energy. The elements in the sample then emit X-rays that are characteristic for each element. The system collects
the X-rays, and the software analyzes the resulting data to determine the elements that are present. Our XRF
products provide automated solutions on a turn-key basis for industrial users that require automated, controlled
production processes that reduce product and process cost, increase output and improve product quality. Our
XRF products cover substantially all of the periodic table and can analyze solid, powder or liquid samples.
SC-XRD systems determine the three-dimensional structures of molecules in a chemical, mineral, or
biological substance being analyzed. SC-XRD systems have the capability to determine structure in both small
chemical molecules and larger biomolecules. SC-XRD systems direct an X-ray beam at a solid, single crystal
sample. The atoms in the crystal sample scatter the X-rays to create a precise diffraction pattern recorded by an
electronic detector. Software then reconstructs a model of the structure and provides the unique arrangement of
the atoms in the sample. This information on the exact arrangement of atoms in the sample is a critical part of
molecular analysis and can provide insight into a variety of areas, including how a protein functions or interacts
with a second molecule. Our SC-XRD systems are designed for use in the life sciences industry, academic
research and a variety of other applications.
μCT is X-ray imaging in 3D, by the same method used in hospital CT scans, but on a small scale with
massively increased resolution. 3D microscopy allows users to image the internal structure of objects
non-destructively on a very fine scale. Bruker μCT is available in a range of easy-to-use desktop instruments,
which generate 3D images of the sample’s morphology and internal microstructure with resolution down to the
sub-micron level. Our μCT systems are used for numerous applications in materials research and in the life
sciences industry.
EDS systems analyze the chemical composition of materials under investigation in electron microscopes by
utilizing the fact that atoms of different chemical elements, when exposed to the high energy electron beam
generated by the microscope, irradiate X-rays of different characteristic energy. The evaluation of the energy
spectrum collected by our spectrometer allows the determination of the qualitative and quantitative chemical
sample composition at the current beam position. EDS systems allow for simultaneous analysis of all elements in
the periodic table, beginning with atomic number 4 (beryllium). Our EDS systems are used for a range of
applications, including nanotechnology and advanced materials research, as well as materials analysis and quality
control. Customers for EDS systems include industrial customers, academia and government research facilities.
EBSD systems are used to perform quantitative microstructure analysis of crystalline samples in electron
microscopes. The microscope’s electron beam strikes the tilted sample and diffracted electrons form a pattern on
a fluorescent screen. This pattern is characteristic of the crystal structure and orientation of the sample region
from which it was generated. It provides the absolute crystal orientation with sub-micron resolution. EBSD can
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be used to characterize materials with regard to crystal orientation, texture, stress, strain and grain size. EBSD
also allows the identification of crystalline phases and their distribution and is applied to many industries such as
metals processing, aerospace, automotive, microelectronics and earth sciences.
S-OES instruments are used for analyzing metals. S-OES covers a broad range of applications for metals
analysis from pure metals trace analysis to high alloyed grades and allows for analysis of a complete range of
relevant elements simultaneously. S-OES instruments pass an electric spark onto a sample, which burns the
surface of the sample and causes atoms to jump to a higher orbit. Our detectors quantify the light emitted by
these atoms and help our customers to determine the elemental composition of the material. This technique is
widely used in production control laboratories of foundries and steel mills.
CS/ONH carrier gas systems incorporate a furnace and infrared or thermal conductivity detection to analyze
inorganic materials for the determination of carbon, sulfur, nitrogen, oxygen and hydrogen. Combustion and inert
gas fusion analyzers are used for applications in metal production and processing, chemicals, ceramics and
cement, coal processing, oil refining and semiconductors.
AFM systems provide atomic or near-atomic resolution of material surface topography using a nano-scale
probe that is brought into light contact with the sample being investigated. In addition to presenting a surface
image, AFM can also provide quantitative nano-scale measurements of feature sizes, material properties,
electrical information, chemical properties and other sample characteristics. Our AFM systems are used for
applications in academic and governmental materials and biological research and semiconductor, data storage
hard drive, LED, battery, solar cells, polymers, and pharmaceutical product development and manufacturing.
FM products use fluorescence microscopy to determine the structure and composition of life science
samples. Our products include two-photon microscopes, multipoint scanning confocal microscopes, super-
resolution microscopes, light-sheet microscopes, laser illumination sources, photoactivation, photostimulation
and photoablation accessories and synchronization and analysis software. Two-photon microscopes allow
imaging deep into tissues and cells and are used widely in neuroscience. Multipoint scanning confocal systems
allow live cell imaging with rapid acquisition of images for structural and composition analysis. Super-resolution
and single-molecule localization microscopy products allow imaging below the optical diffraction limit by an
order of magnitude. Light-sheet based products allow fast 3D volume imaging with very low phototoxicity and
photo-damage effects enabling live cell and large volume imaging.
SOM systems provide atomic or near-atomic two dimensional and three-dimensional surface resolution
using white light interferometry, confocal optical and stylus profilometry methods. SOM profilers range from
low-cost manual tools for single measurements to advanced, highly automated systems for production line
quality assurance and quality control applications where the combination of throughput, repeatability and
reproducibility is essential. SOM profilers support a range of applications in research, product development,
tribology, quality control and failure analysis related to materials and machining in the automotive, orthopedic,
ophthalmic, high brightness LED, semiconductor, data storage, optics and other markets.
TMT systems provide a platform for all types of common mechanical, friction, durability, scratch and
indentation tests for a wide spectrum of materials. Tribology systems are utilized for both academic research of
the fundamental material properties and industrial applications in the semiconductor, aerospace, petroleum,
automotive and other industries.
NanoIR systems perform infrared (IR) spectroscopy at the nanoscale. Our systems use nanoprobe
technology similar to what is used in our atomic force microscopes to deliver quantitative chemical information
from the nanoscale to the sub-micron and macro scales. The NanoIR measurement gives the user varying
physical and chemical properties with nanoscale spatial resolution in a diverse range of fields, including
polymers, 2D materials, materials science, life science and the micro-electronics industry. Our systems allow
nanoscale IR absorption spectroscopy with interpretable IR spectra that directly correlates to FTIR as well as the
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complementary technique of nanoscale s-SNOM. With our broadband sources, these systems allow broadband
scientific spectroscopy.
Alicona systems combine the functionalities of a micro coordinate measurement machine (CMM) with
those of a surface measurement system. These dimensional metrology systems are based on the pioneering
development of optical Focus-Variation measurement algorithms and provide the noncontact measurement of
form and roughness of complex, miniaturized geometries. These systems serve many quality assurance
application areas requiring precision measurement and dimensional metrology, including aerospace, automotive,
precision medical products, additive manufacturing, and micro precision manufacturing.
Canopy provides digital spatial profiling services and instruments which include both our ChipCytometry
profiling instrument and ChipCytometry (single cell and spatial targeted proteomics) and other services. These
technologies, along with Canopy’s more basic IHC and FISH services, allow researchers to elucidate gene and
protein expression in a spatial context, which is useful for deep biological insight into gene expression and for
the development of biomarkers. Canopy also provides transcriptional profiling services covering a variety of
assays, including RNASeq and qPCR. Our multi-omic services provide data elucidating gene expression,
signaling pathways, and differential expression trends on customer provided biological samples. These services
generally incorporate a data analysis service as well and can be utilized with multiple types of samples from very
early discovery research through clinical trials.
BEST Segment
The BEST Segment designs, manufactures and distributes superconducting materials, primarily metallic low
temperature superconductors, for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy
research and other applications. Additionally, BEST develops, manufactures and markets sophisticated devices
and complex tools based primarily on metallic low temperature superconductors that have applications in “big
science” research, including radio frequency accelerator cavities and modules, power couplers and linear
accelerators. BEST also manufactures and sells non-superconducting high technology tools, such as synchrotron
and beamline instrumentation, principally to customers engaged in materials research and “big science” research
projects.
Sales and Marketing
We maintain direct sales forces throughout North America, Europe, Russia, China, Japan, and elsewhere in
the Asia Pacific region. We also utilize indirect sales channels to reach customers. We have various international
distributors, independent sales representatives and various other representatives in parts of Asia, Latin America,
Africa, the Middle East and Eastern Europe. These entities augment our direct sales force and provide coverage
in areas where we do not have direct sales personnel. In addition, we have adopted a distribution business model
in which we engage in strategic distribution alliances with other companies to address certain market segments.
The sales cycle for our products is dependent on the size and complexity of the system and budgeting cycles of
our customers. Our sales cycle is typically three to twenty-four months for academic and high-end research
products and two weeks to six months for industrial products. The sales cycle of our low temperature
superconducting materials is typically four to twelve months, with cycles of certain high-end materials exceeding
one year. Sales of our high-end NMR and superconducting devices typically take more than one year and certain
large, complex contracts can take more than two years to complete.
We have well-equipped applications and demonstration facilities and qualified application personnel who
assist customers and provide product demonstrations in specific application areas. We maintain our primary
demonstration facilities at our production facilities, as well as in other key market locations.
Seasonal Nature of Business
Historically, we have higher levels of revenue in the fourth quarter and lower levels of revenues in the first
quarter of the year, which we believe is influenced by our customers’ budgeting cycles.
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Major Customers
We have a broad and diversified customer base and we do not depend on any single customer. No single
customer accounted for more than 10% of revenue in any of the last three fiscal years or more than 10% of
accounts receivable as of December 31, 2021 or 2020.
Competition
Our existing products and solutions and any products and solutions that we develop in the future may
compete in multiple, highly competitive markets. In addition, there has been a trend towards consolidation in our
industries and many of our competitors have substantially greater financial, technical and marketing resources
than we do. Our competitors may succeed in developing and offering products that could render our products or
those of our strategic partners obsolete or noncompetitive. Our competitors may also have cost and price
advantages based upon the value of their currencies compared with the U.S. Dollar or Euro. In addition, many of
these competitors have significantly more experience in the life sciences, chemical and materials markets. Our
ability to compete successfully will depend on our ability to develop proprietary products that reach our target
markets in a timely manner and are technologically superior to and/or less expensive, or more cost effective, than
products marketed by our competitors. Current competitors or other companies may possess or develop
technologies and products that are more effective than ours. Our technologies and products may be rendered
obsolete or uneconomical by technological advances or by entirely different approaches developed by one or
more of our competitors.
We also compete with companies that provide analytical or automation tools based on technologies other
than those we offer. These technologies may prove to be more successful in meeting demands in the markets that
our products and solutions are intended to serve. In addition, other companies may choose to enter our fields in
the future. We believe that the principal competitive factors in our markets are technology-based applications
expertise, product specifications, functionality, reliability, marketing expertise, distribution capability,
proprietary patent portfolios and cost effectiveness.
BSI Life Science Segment Competition
The Bruker BioSpin Group competes with companies that offer magnetic resonance spectrometers, mainly
JEOL and Oxford Instruments. In the field of preclinical imaging, Bruker BioSpin competes with PerkinElmer
Inc., Mediso, Trifoil, MR Solutions and others. The Bruker CALID Group competes with a variety of companies
that offer mass spectrometry-based systems. Bruker CALID’s competitors in the life science markets and
chemical and applied markets include Danaher, Agilent, GE-Healthcare, Waters, Thermo Fisher Scientific,
Shimadzu, Hitachi and JEOL. In the microbiology market, Bruker CALID competes with Biomerieux. In
molecular diagnostics, Bruker CALID competes with a number of companies offering products for infectious
disease diagnostics. Bruker CALID also competes with a variety of companies that offer molecular spectrometry-
based systems, including Thermo Fisher Scientific, PerkinElmer, Agilent, Foss, ABB Bomem, Buchi, Shimadzu
and Jasco. Bruker CALID’s CBRNE detection customers are highly fragmented, and it competes with a number
of companies in this area, of which the most significant competitor is Smiths Detection.
BSI Nano Segment Competition
The BSI Nano Segment competes with companies that offer analytical X-ray solutions, OES systems, AFM
and SOM systems and optical fluorescence systems, primarily Rigaku, Oxford Instruments, Agilent, Thermo
Fisher Scientific, Ametek’s Spectro and Edax divisions, PANalytical, Park Systems, Olympus, Nikon, Zeiss and
Danaher’s Leica business.
BEST Segment Competition
BEST competes with Luvata, Western Superconducting Technologies Co., Ltd. (WST), and Jastec Co., Ltd.
in low temperature superconducting materials. BEST further competes with Zanon, Mitsubishi Electric and AES
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in the development and supply of accelerator cavities, with Thales, Toshiba and CPI International in the
development and supply of radio frequency couplers, with Mitsubishi Heavy Industries in the development and
supply of superconducting accelerator modules and with AES and Thales for electron linear accelerators.
Manufacturing and Supplies
Several of our manufacturing facilities are certified under ISO 9001:2008 and ISO 13485, international
quality standards. We manufacture and test our magnetic resonance products at our facilities in Faellanden,
Switzerland; Wissembourg, France; and Karlsruhe, Germany. We manufacture and test our preclinical imaging
products at our facilities in Ettlingen, Germany; Wissembourg, France; Kontich, Belgium; and Faellanden,
Switzerland. We manufacture and test our mass spectrometry products at our facilities in Bremen, Germany. We
principally manufacture and test our molecular spectroscopy products, including CBRNE detection products, at
our facilities in Ettlingen, Germany. We manufacture and test our X-ray, OES and AFM products at our facilities
in Penang, Malaysia; Karlsruhe, Germany; Berlin, Germany; Santa Barbara, California, U.S.A.; and Migdal
Ha’Emek, Israel. We manufacture and test the majority of our energy and superconducting products at our
facilities in Hanau, Germany; Bergisch Gladbach, Germany; Perth, Scotland; and Carteret, New Jersey, U.S.A.
Manufacturing processes at our facilities in Europe, Israel and California, U.S.A. include all phases of
manufacturing, such as machining, fabrication, subassembly, system assembly, and final testing. Our other
facilities primarily perform high-level assembly, system integration and final testing. We typically manufacture
critical components in-house to ensure key competence and outsource to third party manufacturers non-critical
components.
We purchase materials and components from various suppliers that are either standard products or built to
our specifications. We obtain some of the components included in our products from a limited group of suppliers
or from a single-source supplier for items such as charge coupled device area detectors, X-ray tubes, robotics,
infrared optics and others. BEST has an ongoing collaboration and a joint technology development agreement
with Allegheny Technologies Incorporated to advance state-of-the-art niobium-based superconductors, including
those used in MRI magnets for the medical industry, and preclinical MRI magnets used in the life-science tools
industry.
Research and Development
We commit substantial capital and resources to internal and collaborative research and development projects
in order to provide innovative products and solutions to our customers. We conduct research primarily to
enhance system performance and improve the reliability of existing products, and to develop revolutionary new
products and solutions. Our research and development efforts are conducted for the relevant products within each
of the operating segments, as well as in collaboration with others on areas such as microfluidics, automation and
workflow management software. We have been the recipient of government grants from Germany and the United
States for various projects related to early-stage research and development. We have generally retained, at a
minimum, non-exclusive rights to any items or enhancements we develop under these grants. The German
government requires that we use and market technology developed under grants in order to retain our rights to
the technology. We have also accepted some sponsored research contracts from private sources.
BSI Life Science Segment Research and Development
The research and development performed in the Bruker BioSpin Group and in the CALID Group is
primarily conducted at our facilities in Bremen and Ettlingen, Germany; Faellanden, Switzerland and
Wissembourg, France. The Bruker BioSpin Group maintains technical competencies in core magnetic resonance
technologies and single- and multimodal imaging technologies and capabilities, including NMR, EPR, MRI,
MPI, PET and CT. The most recent technological innovations included Bruker’s ultra-high-field class in the
NMR and MRI product line and the benchtop Fourier NMR platform. In 2021, we achieved major technical
milestones in automatic diagnosis and calibration capabilities of our systems, enabling new services like
predictive maintenance.
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The Bruker CALID Group maintains technical competencies in core mass spectrometry technologies and
capabilities, including: MALDI, ESI and EI/CI ion source, TOF, TOF/TOF, ion traps, MRMS, quadrupole and
IMS analyzers and bioinformatics. Recent projects include the innovative timsTOF mass spectrometer for
separation and analysis of unresolved compounds and conformations. The Bruker CALID Group also maintains
technical competencies in core vibrational spectroscopy technologies and capabilities, including FT-IR, NIR and
Raman.
BSI Nano Segment Research and Development
The research and development performed in the BSI Nano Segment is primarily conducted at our facilities
in Karlsruhe, Berlin and Leipzig, Germany; Penang, Malaysia; Madison, Wisconsin, Eden Prairie, Minnesota,
San Jose and Santa Barbara, California, and St. Louis, Missouri, U.S.A. The BSI Nano Segment maintains
technical competencies in core X-ray technologies and capabilities, including detectors used to sense X-ray and
X-ray diffraction patterns, X-ray sources and optics that generate and focus the X-rays, robotics and sample
handling equipment that holds and manipulates the experimental material, and software that generates the
structural data. Recent projects include fluorescence microscopy with simultaneous, all-optical stimulation and
imaging platforms for optogenetics neuroscience research and light sheet cell microscopy systems, which enable
brain research and high-resolution live cell research. The BSI Nano Segment also has competencies in AFM
technology, which involve sub-angstrom level position and motion control, as well as sub-pico newton force
control. The BSI Nano Segment technologies also include 3D optical inference-based microscopy, stylus
profilometry, tribology testing, nano-indentation, optical fluorescence two-photon microscopy, multipoint
scanning microscopy, high-speed, 3D super-resolution florescence microscopy and spatial biology and single-
cell targeted proteomics technologies. Recent innovations include elemental analyzer systems for advanced
applications and research and simultaneous, all-optical stimulation and imaging platforms for neuroscience
applications.
BEST Segment Research and Development
The research and development performed in the BEST Segment is primarily conducted at our facilities in
Hanau and Bergisch Gladbach, Germany; and Carteret, New Jersey, U.S.A. BEST maintains technical
competencies in the production and development of low and high temperature superconducting materials and
devices.
Intellectual Property
Our intellectual property consists of patents, copyrights, trade secrets, know-how, and trademarks.
Protection of our intellectual property is a strategic priority for our businesses because of the length of time and
expense associated with bringing new products through the development process and to the marketplace. We
have a substantial patent portfolio, and we intend to file additional patent applications as appropriate. We believe
our owned and licensed patent portfolio provides us with a competitive advantage. This portfolio permits us to
maintain access to a number of key technologies. We license our owned patent rights where appropriate. We
intend to enforce our patent rights against infringers, if necessary. The patent positions of life sciences tools
companies involve complex legal and factual questions. As a result, we cannot predict the enforceability of our
patents with certainty. In addition, we are aware of the existence from time to time of patents in certain countries,
which, if valid, could impair our ability to manufacture and sell products in these countries.
We also rely upon trade secrets, know-how, trademarks, copyright protection and licensing to develop and
maintain our competitive position. We generally require the execution of confidentiality agreements by our
employees, consultants, and other scientific advisors. These agreements provide that all confidential information
made known during the course of a relationship with us will be held in confidence and used only for our benefit.
In addition, these agreements provide that we own all inventions generated during the course of the relationship.
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Government Contracts
We are a party to various government contracts. Under some of these government contracts, the government
may receive license or similar rights to intellectual property developed under the contract. However, under
government contracts we enter we generally receive at least non-exclusive rights to any items or technologies we
develop. Although we transact business with various government agencies, we believe that no government
contract is of such magnitude that a renegotiation of profits or termination of the contract or subcontracts at the
election of the government would have a material adverse effect on our financial results.
Government Regulation
We are required to comply with federal, state, and local environmental protection regulations. We do not
expect this compliance to have a significant impact on our capital spending, earnings or competitive position.
Our products are subject to the U.S. Food and Drug Administration’s, or the FDA’s, requirements for
electronic radiation emitting products, which include requirements related to record-keeping and reporting;
labeling; notification; product repairs, replacements and refunds; importations; and performance standards. For
example, prior to introducing a product in the United States, our Bruker AXS subsidiary provides notice to the
FDA in the form of a Radiation Safety Initial Product Abbreviated Report, which provides identification
information and operating characteristics of the product. If the FDA finds that the report is complete, it provides
approval in the form of what is known as an accession number. Bruker AXS may not market a product until it
has received an accession number. In addition, Bruker AXS submits an annual report to the FDA that includes
the radiation safety history of all products it sells in the United States. Bruker AXS is required to report to the
FDA incidents of accidental exposure to radiation arising from the manufacture, testing, or use of any of its
products. Bruker AXS also reports installations of its products to state government regulatory agencies
responsible for the regulation of radiation emitting devices. For sales in Germany, Bruker AXS registers each
system with the local authorities. In some countries where Bruker AXS sells systems, Bruker AXS uses the
license we obtained from the federal authorities in Germany to assist it in obtaining a license from the country in
which the sale occurs.
Our Bruker AXS subsidiary possesses low-level radiation materials licenses from the local radiation safety
authority, Gewerbeaufsichtsamt Karlsruhe, for its facility in Karlsruhe, Germany; and from the local radiation
safety authority, Kanagawa Prefecture, for its facility in Yokohama, Japan, as well as from various other
countries in which it sells its products. Our Bruker Daltonics subsidiary possesses low-level radiation licenses for
facilities in Billerica, Massachusetts and Leipzig, Germany. The U.S. Nuclear Regulatory Commission also has
regulations concerning the exposure of our employees to radiation.
Certain of our clinical products are subject to regulation as medical devices in the United States by the FDA
and by similar regulatory bodies in other countries where such products are sold. The regulatory requirements
imposed by the FDA and other regulatory bodies govern a wide variety of product-related activities, from quality
management, design and development to labeling, manufacturing, promotion, sales, and distribution. As such, we
continually invest in our manufacturing infrastructure to gain and maintain certifications and registrations
necessary for the relevant level of regulatory clearance. We also are required to maintain processes and systems
for medical device product submissions. For example, our MALDI Biotyper CA system is subject to regulation
by the FDA as a medical device and requires FDA premarket review and clearance via the 510(k) premarket
notification process and our IVD-CE Certified MALDI BioTyper system is subject to regulation in the European
Union under the provisions of Directive 98/79/EC. In addition, certain product changes, including changes to the
product indications or label claims, could trigger the requirement for a new 510(k) or other FDA or foreign
regulatory premarket submission. The process of obtaining marketing approval, authorization, or clearance from
the FDA and comparable foreign regulatory authorities for new products, or for enhancements or modifications
to existing products, could take a significant amount of time, require the expenditure of substantial financial and
other resources, and require rigorous and expensive pre-clinical and clinical testing. Additionally, the FDA or
16
comparable foreign regulatory authorities could impose limitations on the indications for use of our products.
Should we pursue an FDA or comparable foreign regulatory authority clearance, authorization, or approval for a
new device or device modification, we cannot be certain that we will receive required clearance, authorization, or
approval on a timely basis or at all. The failure to receive clearance, authorization, or approval for significant
new products or modifications to existing products on a timely basis or at all could have a material, adverse
effect on our financial condition and results of operations.
Both before and after a medical device product is commercially released, we have ongoing responsibilities
under FDA and foreign regulations. For example, we are required to comply with the FDA’s Quality System
Regulation, which sets forth the good manufacturing requirements for medical devices. These include
requirements related to design controls, production and process controls, process validation, purchasing controls,
supplier oversight, complaint handling and investigation, corrective and preventative actions, and record-
keeping. In addition, the FDA’s medical device reporting regulation requires us to provide information to the
FDA whenever we become aware that there is evidence that reasonably suggests that a device may have caused
or contributed to a death or serious injury or, that a malfunction occurred which would be likely to cause or
contribute to a death or serious injury upon recurrence. The FDA and comparable foreign regulatory authorities
also regulate the promotion and marketing of medical devices and require that manufacturers only make
promotional claims or statements that are consistent with the indications and labeling cleared, authorized, or
approved by the FDA or other regulatory authorities. The FDA and comparable foreign regulatory authorities
may take enforcement action against us, should the FDA determine we have engaged in “off-label” promotion or
other violative marketing activities.
The European Union Directive will be replaced in May 2022 by the IVD Regulation (EU) 2017/746. The
regime changes significantly with the new Regulation, which requires clinical evidence to demonstrate the
claimed benefits and safety of the device in relation to its stated purpose, stricter classification and CE-marking
requirements and ongoing post-market follow-up to ensure conformity. The Regulation requires new databases to
be set up to track which devices are CE marked and to register clinical studies and post-market monitoring. In
addition, tracing is enhanced by a Unique Device Identification (UDI) System and through requirements on other
economic operators in the supply chain. Our products currently approved under the Directive, and not already
placed on the market or put into service, must be recertified under the Regulation by May 2024.
Backlog
Our backlog consists of firm orders under non-cancellable purchase orders received from customers. Total
system backlog as of December 31, 2021 and 2020 was approximately $2,077.2 million and $2,006.7 million,
respectively. The increase in our backlog in 2021 when compared to 2020 is due to strengthening demand in our
BSI order bookings as of December 31, 2021. We anticipate that approximately 70% of the backlog as of
December 31, 2021 will be recognized in revenue in 2022. We generally experience variable and fluctuating
revenues in the first three quarters of the year, while our fourth quarter revenues have historically been stronger
than the rest of the year. As a result, backlog on any particular date can be indicative of our short-term revenue
performance but is not necessarily a reliable indicator of long-term revenue performance.
Human Capital
We are committed to enabling scientists to make breakthrough discoveries and develop new applications
that improve the quality of human life. Our employees are a critical component of that mission. We endeavor to
attract, develop and retain top talent by offering our employees a challenging but rewarding work experience, as
well as competitive compensation and benefits. Further, we strive to create a work environment that promotes
integrity, respect and trust among our employees.
As of December 31, 2021 and 2020, we had approximately 7,765 and 7,400 full-time employees worldwide,
respectively. Of these employees, approximately 1,230 and 1,180 were located in the United States at
December 31, 2021 and 2020, respectively. Our senior leadership team is 75% male and 25% female.
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The table below provides our employees by functional area.
Production and distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of
Employees
2021
2020
3,690
1,900
885
1,290
7,765
3,570
1,770
825
1,235
7,400
Diversity, Talent Retention and Development
Bruker has initiatives and programs to attract, develop and retain our talent tailored to specific employee
populations and geographies, including leadership development programs, technical training, and other skill-
based training.
We have an established global performance management process in which managers provide regular
feedback and coaching to develop employees. Throughout the year, managers and employees engage in annual
objective setting, mid-year reviews of performance as well as a year-end performance evaluation. We also have
certain employee populations piloting the use of our Talent Management system to capture career development
goals as well as certifications achieved, projects completed, languages spoken and mobility preferences in order
to promote internal career opportunities.
Additionally, we are focused on promoting diversity across our organization. Our people come from diverse
backgrounds all over the world. We are united by a shared purpose—innovation with integrity. We hope that the
work we do every day inspires and impacts global scientific research—and our diverse and dynamic team of
people inspire each other to achieve their full potential. We build cross-functional teams to support collaboration
and enable the creation of new ideas by actively identifying and recruiting talent with diverse professional
experiences, skills and backgrounds including from diverse gender, racial and ethnic backgrounds.
Employee Health and Safety
Ensuring the safety and well-being of our employees is a top priority for Bruker. In response to the
COVID-19 pandemic, we implemented additional health and safety protocols at our sites including enhanced
cleaning procedures and social distancing requirements. We implemented a remote work policy for all employees
whose job allowed them to do so. Additional personal protective equipment (PPE) was provided to employees,
and work procedures were modified to reduce risk. Also, we engaged with a vendor to offer at home COVID-19
testing kits for those employees who needed to travel to customer sites as well as implemented an enhanced
Employee Assistance Program to promote mental and physical wellness. We continue to refine these measures as
new information about the virus becomes available.
Available Information
We maintain a website at www.bruker.com. We make available on our website documents describing our
corporate governance and our Code of Conduct. We are not including the information contained on our website
as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of
charge through our website our annual reports on Form 10-K, our proxy statements, quarterly reports on Form
10-Q, current reports on Form 8-K, and amendments to these reports filed with or furnished to the SEC pursuant
to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable
after they are electronically filed with or furnished to the SEC. The SEC also maintains an internet site that
contains reports, proxy and information statements and other information regarding our filings at www.sec.gov.
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ITEM 1A RISK FACTORS
The following risk factors should be considered in conjunction with the other information included in this
Annual Report on Form 10-K. This report may include forward-looking statements that involve risks and
uncertainties. In addition to those risk factors discussed elsewhere in this report, we identify the following risk
factors, which could affect our actual results and cause actual results to differ materially from those in the
forward-looking statements.
Our business is subject to numerous risks and uncertainties, including those described in Item 1A “Risk
Factors.” These risks include, but are not limited to, the following:
Risk Factor Summary
• Our financial condition and results of operations for fiscal 2022 may continue to be adversely affected
by the COVID-19 pandemic;
•
Supply chain issues, including increasing demand for certain components used in our products and
production delays, has and could continue to result in significant additional costs and manufacturing
inefficiencies, which could adversely impact our revenue, increase our manufacturing costs and have a
material adverse effect on our operating results.
• Unfavorable economic or political conditions in the countries in which we operate may have an adverse
impact on our business results or financial condition;
• We derive a significant portion of our revenue from international sales and are subject to the
operational risks of doing business in foreign countries;
• Adverse global economic conditions, geopolitical tensions and other conditions that impact our
increasingly global operations could have a negative effect on our business, results of operations and
financial condition and liquidity.
•
If our products fail to achieve and sustain sufficient market acceptance across their broad intended
range of applications, we will not generate expected revenue;
• Our products compete in markets that are subject to rapid technological change, and one or more of the
technologies underlying our products could be made obsolete by new technology;
•
If investment in life and material science research spending declines, our ability to generate revenue
may suffer;
• Any reduction in the capital resources or government funding of our customers could reduce our sales
and impede our ability to generate revenue;
• Disruptions at any of our manufacturing facilities could adversely affect our business;
•
In addition to the risks applicable to our life science and materials analysis products, our CBRNE
detection products are subject to a number of additional risks, including lengthy product development
and contract negotiation periods and certain risks inherent in long-term government contracts;
• Our debt may adversely affect our cash flow and may restrict our investment opportunities or limit our
activities;
• The transition away from LIBOR may adversely affect our cost to obtain financing;
•
If we lose our strategic partners, our marketing and sales efforts could be impaired;
• We face risks related to sales through distributors and other third parties that we do not control, which
could harm our business;
• Our operations are dependent upon a limited number of suppliers and contract manufacturers;
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•
•
Supply shortages and increasing prices of raw materials could adversely affect the gross profit of the
Bruker BioSpin Group and the BEST Segment;
If we are unable to effectively protect our intellectual property, third parties may use our technology,
which would impair our ability to compete in our markets;
• We may be involved in lawsuits to protect or enforce our patents that are brought by us which could be
expensive and time consuming and, if determined adversely, could adversely affect our patent position;
• Our manufacture and sale of products could lead to product liability claims for which we could have
substantial liability;
• We are subject to environmental laws and regulations, which may impose significant compliance or
other costs on us; and
• We operate as an entrepreneurial, decentralized company, which presents both benefits and certain
risks. In particular, significant growth in a decentralized operating model may put strain on certain
business group resources and our corporate functions, which could materially and adversely affect our
business, financial condition and results of operations.
Risks Related to Our Business and Industry
Our financial condition and results of operations for fiscal 2022 may continue to be adversely affected by the
COVID-19 pandemic.
The impact of the worldwide COVID-19 pandemic has been and will likely continue to be extensive in
many geographies and aspects of society. The pandemic has resulted in and will likely continue to result in
disruptions to the global economy, as well as businesses, supply chains and capital markets around the world.
Impacts to our business have included temporary closures of many of our government and university
customers and our suppliers, disruptions or restrictions on our employees’ and customers’ ability to travel, and
delays in product installations or shipments to and from affected countries. In an effort to halt the outbreak of
COVID-19, a number of countries, including the United States, implemented and some continue to implement
significant restrictions on travel, shelter in place or stay at home orders, and business closures. While some of
these restrictions were loosened in certain jurisdictions, some markets have returned to restrictions in the face of
increases in new COVID-19 cases, particularly as more contagious strains of the virus emerge. Many of our
employees in jurisdictions in which we have significant operations continue to work remotely. In addition,
certain Asia Pacific geographies where we operate are continuing to experience significant disruptions relating to
COVID-19. Much of the commercial activity in sales and marketing, and customer demonstrations and
applications training, is still either being conducted remotely or postponed. Even where customers have
re-opened their sites, some still operate at productivity levels that are below pre-pandemic levels in an effort to
accommodate safety protocols and as a result of pandemic-related supply chain disruptions. Any resurgence of
the virus or the emergence of new strains of the virus, particularly any new strains which are more easily
transmitted or which are resistant to existing vaccines, may require us or our customers to close or partially close
operations once again. These travel restrictions, business closures and operating reductions at Bruker, our
customers, our distributors, and/or our suppliers have in the past adversely impacted and may continue to
adversely impact our operations worldwide, including our ability to manufacture, sell or distribute our products,
as well as cause temporary closures of our foreign distributors, or the facilities of suppliers or customers. Further,
global supply chains, including for semiconductor chips, components and raw materials such as copper, continue
to be disrupted, causing shortages, which has impacted our ability to manufacture and supply our products. We
could also experience increased compensation expenses associated with employee recruiting and employee
retention to the extent employment opportunities continue to multiply post-pandemic, causing the search for and
retention of talent to become more competitive. This disruption of our employees, distributors, suppliers and
customers has historically impacted and may continue to impact our global sales and future operating results.
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In September 2021, President Biden issued an Executive Order requiring certain COVID-19 precautions for
government contractors and their subcontractors, including mandatory employee vaccination (subject to medical
and religious exemptions). In November 2021, the Department of Labor’s Occupational Safety and Health
Administration, or OSHA, issued an Emergency Temporary Standard, or ETS, requiring that all employers with
at least 100 employees ensure that their employees are fully vaccinated for COVID-19 or obtain a negative
COVID-19 test at least once a week. The Executive Order was preliminarily enjoined by several U.S. federal
district courts, the U.S. Supreme Court preliminarily stayed the OSHA ETS in January 2022, and OSHA
subsequently withdrew the ETS. While we are not currently subject to any vaccine mandate, any requirement to
mandate COVID-19 vaccination of our workforce or require our unvaccinated employees to be tested weekly
could result in employee attrition and difficulty securing future labor needs and may have an adverse effect on
future profit margins. In addition, any requirement to impose such obligations on our suppliers who are deemed
government contractors and their subcontractors could impact the price and continuity of supply of raw materials
and our results of operations and financial condition could be adversely affected. It continues to be our policy to
encourage each of our employees to be fully vaccinated against COVID-19.
We are continuing to monitor and assess the ongoing effects of the COVID-19 pandemic on our commercial
operations in 2022. However, we cannot at this time accurately predict what effects these conditions will
ultimately have on our operations due to uncertainties relating to the severity of the disease, including the impact
of any resurgence of the virus, the continued emergence of new strains of the virus, the effectiveness and
availability of vaccines, the willingness of individuals to receive vaccines, (including to protect against any new
strains of the virus), and the length or severity of travel restrictions, business closures, and other safety and
precautionary measures imposed by the governments of impacted countries. The pandemic has also adversely
affected the economies and financial markets of many countries, which has affected and may continue to affect
demand for our products and our operating results.
The preparation of the consolidated financial statements requires us 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. We evaluate estimates, judgments and methodologies on an
ongoing basis. Changes in estimates are recorded in the period in which they become known. We base estimates
on historical experience and on various other assumptions that we believe 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 COVID-19 pandemic 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-related amounts, will depend on future
developments that are highly uncertain, including as a result of new information that may emerge concerning
COVID-19, the continued emergence of new strains of the virus, the effectiveness and availability of vaccines,
the willingness of individuals to receive vaccines (including to protect against any new strains of the virus), and
the actions taken to contain or treat the virus, as well as the economic impact on local, regional, national and
international customers and markets. We have made estimates of the impact of COVID-19 within the
consolidated 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.
Supply chain issues, including increasing demand for certain components used in our products and
production delays, has and could continue result in significant additional costs and manufacturing
inefficiencies, which could adversely impact our revenue, increase our manufacturing costs and have a
material adverse effect on our operating results.
We have experienced supply chain interruptions as a result of the COVID-19 pandemic, general global
economic conditions, a tight labor market and other factors, including natural events and disasters. Various
factors, including increased demand for certain components and production delays, are contributing to shortages
of certain components used in our products and increased difficulties in our ability to obtain a consistent supply
of materials at stable pricing levels. Supply shortages and longer lead times for components used in our products,
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including limited source components, can result in significant additional costs and inefficiencies in
manufacturing. A shortage of key components may cause a significant disruption to our production activities,
which could have a substantial adverse effect on our financial condition or results of operations. If we are
unsuccessful in resolving any such component shortages in a timely manner, we could experience a significant
adverse impact on the timing of our revenue, a possible loss of revenue, or an increase in manufacturing costs,
any of which could have a material adverse impact on our operating results.
Unfavorable economic or political conditions in the countries in which we operate may have an adverse
impact on our business results or financial condition.
Our businesses and results of operations are affected by international, national and regional economic and
political conditions. Our businesses or financial results may be adversely impacted by unfavorable changes in
economic or political conditions in the countries and markets in which we 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, geopolitical tensions and changes in capital spending patterns.
Our revenue from U.S. operations represented approximately 25% and 23% of total consolidated revenue
for fiscal 2021 and 2020, respectively. Our revenue from operations in Europe represented approximately 38% of
total consolidated revenue for both fiscal years 2021 and 2020. Our revenue from operations in the Asia Pacific
region represented approximately 30% and 32% of total consolidated revenue in each of the corresponding
periods. Economic factors that could adversely influence demand for our products include the impact of
geopolitical tensions and any related sanctions implemented, continued uncertainty about global economic
conditions, including as a result of the pandemic, leading to ongoing reductions in 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 a 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.
We cannot predict how changes in economic conditions or political instability will affect our customers and
suppliers or how any negative impact on our customers and suppliers might adversely impact our business results
or financial condition.
Adverse global economic conditions, geopolitical tensions and other conditions that impact our increasingly
global operations could have a negative effect on our business, results of operations and financial condition
and liquidity.
As a global company, our performance is affected by global economic conditions as well as geopolitical
tensions and other conditions with global reach. In recent years, concerns about the global economic outlook
have adversely affected market and business conditions in general. Macroeconomic weakness and uncertainty
make it more difficult for us to manage our operations and accurately forecast revenue, gross margin and
expenses. Geopolitical tensions, such as Russia’s recent incursion into Ukraine, ongoing conflicts between the
United States and China, tariff and trade policy changes, economic sanctions, increasing potential of conflict
involving countries in Asia that are critical to our supply chain operations, such as Taiwan and China, have
resulted in increasing global tensions and create uncertainty for global commerce. As a result of economic
sanctions on Russia we may face disruptions to our operations within Russia, among other challenges. Sustained
or worsening of global economic conditions and increasing geopolitical tensions may increase our cost of doing
business, materially disrupt our supply chain operations, cause our customers to reduce or delay spending and
intensify pricing pressures. Any or all of these factors could negatively affect demand for our products and our
business, financial condition and result of operations.
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We derive a significant portion of our revenue from international sales and are subject to the operational risks
of doing business in foreign countries.
International sales account, and are expected to continue to account, for a significant portion of our total
revenues. Our revenue from non-U.S. operations represented approximately 75% and 77% of our total
consolidated revenue for fiscal 2021 and 2020, respectively. Our international operations are, and will continue
to be, subject to a variety of risks associated with conducting business internationally, many of which are beyond
our control. These risks, which may adversely affect our ability to achieve and maintain profitability and our
ability to sell our products internationally, include:
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changes in foreign currency translation rates;
changes in regulatory requirements;
legislation and regulation, including tariffs, relating to the import or export of high technology
products, which legislation and regulation may conflict with U.S. law and may have an adverse impact
on our business results;
the imposition of government controls;
political and economic instability, including the impact of COVID-19, the possibility of an economic
recession in certain key markets such as Germany, international hostilities and resulting sanctions, acts of
terrorism and governmental restrictions, inflation, trade relationships and military and political alliances;
costs and risks of deploying systems in foreign countries;
compliance with export laws and controls and trade embargoes in multiple jurisdictions, which may
conflict with U.S. law and may have an adverse impact on our business results;
limited intellectual property rights;
the burden of complying with a wide variety of complex foreign laws and treaties, including
unfavorable labor regulations, specifically those applicable to our European operations; and
compliance with U.S. and local laws affecting the activities of U.S. companies abroad, including the
United States Foreign Corrupt Practices Act, or FCPA, and local anti-bribery laws.
The United States has implemented tariffs on certain imported goods. These additional tariffs could include
items imported by us from China or other countries. In addition, China has imposed tariffs on a wide range of
American products in retaliation for these new American tariffs. As a result, there is a concern that the imposition
of additional tariffs by the United States could result in the adoption of additional tariffs by China and other
countries as well. Any resulting trade war could negatively impact the global market for scientific instruments
and could have a significant adverse effect on our business. The imposition of tariffs on items imported by us
from China or other countries could increase our costs and could result in lowering our gross margin on products
sold. Conversely, China imposing tariffs on items that we export to China could adversely impact our customers’
ability to purchase our products and our competitive position in China or increase our costs, which could have a
material adverse effect on our business and results of operations.
We must also comply with the European Union General Data Protection Regulation (GDPR) and other
similar regulations in other countries. The goal of the regulation is to increase individual rights and protections
for personal data located in or originating from the European Union. GDPR is extraterritorial in that it applies to
all business within the European Union and any business located outside of the European Union that processes
personal data of individuals located within the European Union. There are significant fines associated with
non-compliance. In 2020, the Court of Justice of the European Union invalidated the EU-US Privacy Shield
Framework, removed a key mechanism for transfers of personal data from the European Union to the United
States and altered the international data transfer under GDPR. The decision has caused uncertainty for
multinational companies about how they can properly transfer personal data from the EU to the US and the cost
and effort to comply with such decision could cause disruption of data transfers and have a material adverse
effect on our business.
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While the impact of these factors is difficult to predict, any one or more of these factors could adversely
affect our operations in the future.
Our competitive position and reported financial results may be adversely affected when we exchange foreign
currency received from international sales into U.S. Dollars and by fluctuations in currency exchange rates.
A significant portion of our business is conducted in currencies other than the U.S. Dollar, which is our
reporting currency. As a result, currency fluctuations among the U.S. Dollar and the currencies in which we do
business could cause the price of our products to be more or less competitive than our principal competitors’
products. Currency fluctuations will increase or decrease our cost structure relative to those of our competitors,
which could lessen the demand for our products and affect our competitive position. From time to time we enter
into certain hedging transactions and/or option and foreign currency exchange contracts which are intended to
offset some of the market risk associated with our sales denominated in foreign currencies. We cannot predict the
effectiveness of these transactions or their impact upon our future operating results, and from time to time they
may negatively affect our quarterly earnings.
In addition to the foreign currency exposure associated with differences between where our products are
manufactured and sold by us and our competitors, our exposure to currency exchange rate fluctuations results
from the currency translation exposure associated with the preparation of our consolidated financial statements,
as well as from the exposure associated with transactions of our subsidiaries that are denominated in a currency
other than the respective subsidiary’s functional currency. While our financial results are reported in U.S.
Dollars, the financial statements of many of our subsidiaries outside the U.S. are prepared using the local
currency as the functional currency. During consolidation, these results are translated into U.S. Dollars by
applying appropriate exchange rates. As a result, fluctuations in the exchange rate of the U.S. Dollar relative to
the local currencies in which our foreign subsidiaries report could cause significant fluctuations in our reported
results. Moreover, as exchange rates vary, revenue and other operating results may differ materially from our
expectations. The effects of changes in currency exchange rates increased our 2021 revenue by approximately
$43.3 million, or 2.2%, increased our 2020 revenue by approximately $29.4 million, or 1.4%, and decreased our
2019 revenue by approximately $50.3 million, or 2.7%. Adjustments resulting from financial statement
translations are included as a separate component of shareholders’ equity. In the years ended December 31, 2021
and 2020, we recorded net losses from currency translation adjustments of ($26.4) million and net gains of
$22.0 million, respectively.
Additionally, to the extent monetary assets and liabilities, including cash and debt, are held in a different
currency than the reporting subsidiary’s functional currency, fluctuations in currency exchange rates may have a
significant impact on our reported financial results, and may lead to increased earnings volatility. We may record
significant gains or losses related to both the translation of assets and liabilities held by our subsidiaries into local
currencies and the remeasurement of inter-company receivables and loan balances.
Goodwill, intangible assets and other long-lived assets are subject to impairment which could negatively
impact our operating results.
We have recorded goodwill, intangible assets and other long-lived assets that must be periodically evaluated
for potential impairment. We assess the realizability of the reported goodwill, intangible assets and other long-
lived assets annually, as well as whenever events or changes in circumstances indicate that the assets may be
impaired. These events or circumstances generally include operating losses or a significant decline in the
earnings associated with the reporting unit these assets are reported within. A decline in our stock price and
market capitalization may also cause us to consider whether goodwill, intangible assets and other long-lived
assets may require an impairment assessment. Our ability to realize the value of these assets will depend on the
future cash flows of the reporting unit in addition to how well we integrate the businesses we acquire. We did not
record any impairment losses for the years ended December 31, 2021 and December 31, 2020. We recorded
impairment losses of $1.7 million for the year ended December 31, 2019.
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If our products fail to achieve and sustain sufficient market acceptance across their broad intended range of
applications, we will not generate expected revenue.
Our business strategy depends on our ability to successfully commercialize a broad range of products based
on our technology platforms, including magnetic resonance technology, pre-clinical imaging technology, mass
spectrometry technology, X-ray technology, atomic force microscopy technology, ChipCytometry technology,
stylus and optical metrology technology, fluorescence microscopy technology, infrared technology and
superconducting magnet technologies for use in a variety of life science, chemistry and materials analysis
applications. Some of our products have only recently been commercially launched and have achieved only
limited sales to date. The commercial success of our products depends on obtaining and expanding market
acceptance by a diverse array of industrial, academic, clinical, pharmaceutical, biotechnology, applied, medical
research and governmental customers around the world. We may fail to achieve or sustain substantial market
acceptance for our products across the full range of our intended applications or in one or more of our principal
intended applications. Any such failure could decrease our sales and revenue. To succeed, we must convince
substantial numbers of potential customers to invest in new systems or replace their existing techniques with
techniques employing our systems. Limited funding available for capital acquisitions by our customers, as well
as our customers’ own internal purchasing approval policies, could hinder market acceptance of our products.
Our intended customers may be reluctant to make the substantial capital investment generally needed to acquire
our products or to incur the training and other costs involved with replacing their existing systems with our
products. We also may not be able to convince our intended customers that our systems are an attractive and
cost-effective alternative to other technologies and systems for the acquisition, analysis and management of
molecular, cellular and microscopic information. Because of these and other factors, our products may fail to
gain or sustain market acceptance.
Our products compete in markets that are subject to rapid technological change, and one or more of the
technologies underlying our products could be made obsolete by new technology.
The market for discovery and analysis tools is characterized by rapid technological change and frequent new
product introductions. Rapidly changing technology could make some or all of our product lines obsolete unless
we are able to continually improve our existing products and develop new products. Because substantially all of
our products are based on our technology platforms, including magnetic resonance technology, mass
spectrometry technology, X-ray technology, atomic force microscopy technology, fluorescence microscopy
technology, ChipCytometry technology, stylus and optical metrology technology and infrared technology, we are
particularly vulnerable to any technological advances that would make these techniques obsolete as the basis for
analytical systems in any of our markets. To meet the evolving needs of our customers, we must rapidly and
continually enhance our current and planned products and services and develop and introduce new products and
services. In addition, our product lines are based on complex technologies that are subject to rapid change as new
technologies are developed and introduced in the marketplace. We may have difficulty in keeping abreast of the
rapid changes affecting each of the different markets we serve or intend to serve. If we fail to develop and
introduce products in a timely manner in response to changing technology, market demands or the requirements
of our customers, our product sales may decline, and we could experience significant losses.
We face substantial competition. If we fail to compete effectively, it could harm our business results and
materially impact the value of our company.
We face substantial competition in our industries and we expect that competition in all of our markets will
increase further. Currently, our principal competition comes from established companies providing products
using existing technologies that perform many of the same functions for which we market our products. A
number of our competitors have expanded their market share in recent years through business combinations.
Other companies also may choose to enter our fields in the future. Our competitors may develop or market
products that are more effective or commercially attractive than our current or future products or that may render
our products obsolete. Competition has in the past subjected, and is likely in the future to subject, our products to
pricing pressure. Many of our competitors have more experience in the market and substantially greater financial,
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operational, marketing and technical resources than we do, which could give them a competitive advantage in
areas such as research and development, production, marketing and distribution. Our ability to compete
successfully will depend, in part, on our ability to develop proprietary products that reach the market in a timely
manner and are technologically superior to, less expensive than, or more cost-effective than, other currently
marketed products.
If investment in life and material science research spending declines, our ability to generate revenue may
suffer.
We are dependent, both directly and indirectly, upon general investment in life science research, particularly
in the research and development budgets of the pharmaceutical and biotechnology industries, and in material
science research as well as upon the financial condition and funding priorities of various governments and
government agencies. Since our inception, both we and our academic collaborators and customers have benefited
from various governmental contracts and research grants. Whether we or our academic collaborators will
continue to be able to attract these grants depends not only on the quality of our products, but also on general
spending patterns of public institutions.
Any reduction in the capital resources or government funding of our customers could reduce our sales and
impede our ability to generate revenue.
A significant portion of our sales are capital purchases by our customers. The spending policies of our
customers could have a significant effect on the demand for our products. These policies are based on a wide
variety of factors, including the resources available to make purchases, the spending priorities among various
types of equipment, policies regarding spending during recessionary periods and changes in the political climate.
Any changes in capital spending or changes in the capital budgets of our customers could significantly
reduce demand for our products. The capital resources of our life science and other corporate customers may be
limited by the availability of equity or debt financing. Any significant decline in research and development
expenditures by our life science and material science customers could significantly decrease our sales. In
addition, a substantial portion of our sales are to non-profit and government entities, which are dependent on
government support for scientific research. Any decline in this support could decrease the ability of these
customers to purchase our products.
Disruptions at any of our manufacturing facilities could adversely affect our business.
We have manufacturing facilities located in the United States, Europe, Israel and Malaysia. Many of our
products are developed and manufactured at single locations, with limited alternate facilities. If we experience
any significant disruption of those facilities for any reason, such as strikes or other labor unrest, power
interruptions, fire, earthquakes, or other events beyond our control, we may be unable to manufacture the
relevant products at previous levels or at all. A reduction or interruption in manufacturing could harm our
customer relationships, impede our ability to generate revenues from our backlog or obtain new orders and could
have a material adverse effect on our business, results of operations, financial condition and cash flows.
If employees were to engage in a strike or other work stoppage or interruption, our business, results of
operations, financial condition and liquidity could be materially adversely affected.
Many of our employees are represented by workers’ councils and labor unions in certain jurisdictions,
primarily in Germany and France. If disputes with these employees arise, or if our workers engage in a strike or
other work stoppage or interruption, we could experience a significant disruption of, or inefficiencies in, our
operations or incur higher labor costs, which could have a material adverse effect on our business, results of
operations, financial condition and liquidity.
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In addition to the risks applicable to our life science and materials analysis products, our CBRNE detection
products are subject to a number of additional risks, including lengthy product development and contract
negotiation periods and certain risks inherent in long-term government contracts.
Our CBRNE detection products are subject to many of the same risks associated with our life science
products, including vulnerability to rapid technological change, dependence on mass spectrometry and other
technologies and substantial competition. In addition, our CBRNE detection products and certain FT-IR products
are generally sold to government agencies under long-term contracts. These contracts generally involve lengthy
pre-contract negotiations and product development. We may be required to devote substantial working capital
and other resources prior to obtaining product orders. As a result, we may incur substantial costs before we
recognize revenue from these products. Moreover, in return for larger, longer-term contracts, our customers for
these products often demand more stringent acceptance criteria. These criteria may also cause delays in our
ability to recognize revenue from sales of these products. Furthermore, we may not be able to accurately predict
in advance our costs to fulfill our obligations under these long-term contracts. If we fail to accurately predict our
costs, due to inflation or other factors, we could incur significant losses. Also, the presence or absence of such
contracts may cause substantial variation in our results of operations between fiscal periods and, as a result, our
results of operations for any given fiscal period may not be predictive of our results for subsequent fiscal periods.
The resulting uncertainty may have an adverse impact on our stock price.
We rely on information technology to support our operations and reporting environments. A security failure
of that technology, including with respect to cybersecurity, could impact our ability to operate our businesses
effectively, adversely affect our financial results, damage our reputation and expose us to potential liability or
litigation.
We use information systems to carry out our operations and maintain our business records. Some systems
are internally managed and some are maintained by third-party service providers. Our ability to conduct business
could be materially and adversely affected if these systems or resources are compromised, damaged or fail. This
could be a result of a cyber-incident, social engineering scam, hacking, phishing attempts, malware, natural
disaster, hardware or software corruption, failure or error, telecommunications system failure, service provider
error or failure, intentional or unintentional personnel actions or other disruption.
In the ordinary course of business, we collect and store sensitive data, including intellectual property, other
proprietary information and personally identifiable information. Despite our security measures, our information
technology and infrastructure may be vulnerable to cyber-attacks by hackers, including intrusions designed to
access and exfiltrate information and to disrupt and lock-up access to systems for the purpose of demanding
ransom payments, or breached due to employee error, malfeasance, or other disruptions. If this data is
compromised, destroyed or inappropriately disclosed, it could have a material adverse effect, including damage
to our reputation, loss of customers, significant expenses to address and resolve the issues, fines or litigation or
other proceedings by affected individuals, business partners or regulatory authorities.
Our debt may adversely affect our cash flow and may restrict our investment opportunities or limit our activities.
As of December 31, 2021, we had outstanding an aggregate principal amount of debt totaling approximately
$1,336.2 million. We also had the ability to borrow an additional $599.8 million available under our existing
credit facility. Most of our outstanding debt is in the United States and there are substantial cash requirements in
the United States to service debt interest obligations, fund operations, capital expenditures and our declared
dividends and finance potential acquisitions or share repurchases. Our ability to satisfy our debt obligations and
meet our other liquidity needs depends on our future operating performance and on economic, financial,
competitive and other factors beyond our control. Our business may not generate sufficient cash flow to meet our
debt obligations or provide sufficient funds for our other objectives. If we are unable to service our debt or obtain
additional financing, we may be forced to delay strategic acquisitions, capital expenditures or research and
development expenditures or suspend our dividend payments and share repurchases. We may not be able to
obtain additional financing on terms acceptable to us or at all. Furthermore, a majority of our cash, cash
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equivalents and short-term investments is generated from foreign operations, with $646.9 million, or 55.4% held
by foreign subsidiaries as of December 31, 2021. We may incur significant tax consequences relocating cash
from our foreign operations to the United States. Our financial condition and results of operations could be
adversely impacted if we are unable to maintain a sufficient level of cash flow in the United States to address our
funding requirements through cash from operations and timely repatriation of cash from overseas or other
sources obtained at an acceptable cost.
Additionally, the agreements governing our debt require that we maintain certain financial ratios related to
maximum leverage and minimum interest coverage and contain affirmative and negative covenants, including
among others, timely provision of audited consolidated financial statements, restrictions on liens, indebtedness of
the Company and its subsidiaries, asset sales, dividends and transactions with affiliates. Our ability to comply
with these financial restrictions and covenants is dependent on our operations and performance, which is subject
to prevailing economic conditions and other factors, including factors that are beyond our control such as foreign
currency translation rates and interest rates. Our failure to comply with any of these restrictions or covenants may
result in an event of default under the applicable debt instrument, which could permit acceleration of the debt
under the facility and require us to prepay the debt before its scheduled due date.
The transition away from LIBOR may adversely affect our cost to obtain financing.
On July 27, 2017, the U.K. Financial Conduct Authority announced that it intends to stop persuading or
compelling banks to submit London Interbank Offered Rate, or LIBOR, rates. As a result of this change, certain
LIBOR tenors and currencies were eliminated by the end of December 2021 with all other tenors and currencies
of LIBOR to be eliminated by the end of June 2023. The Alternative Reference Rates Committee, a steering
committee comprised of U.S. financial market participants, selected and the Federal Reserve Bank of New York
started in May 2018 to publish the Secured Overnight Finance Rate, or SOFR, as an alternative to LIBOR. SOFR
is a broad measure of the cost of borrowing cash in the overnight U.S. treasury repo market. At this time, it is
impossible to predict whether the SOFR or another reference rate will become an accepted alternative to LIBOR.
The manner and impact of this transition may materially adversely affect the trading market for LIBOR-based
securities, which may result in an increase in borrowing costs under our credit agreements and term loan
agreement. Any replacement for LIBOR may result in an effective increase in the applicable interest rate on our
current or future debt obligations, including our credit agreements and term loan agreement.
Changes in our effective income tax rate could adversely affect our results of operations.
We are subject to income taxes in both the United States and various foreign jurisdictions and our domestic
and international tax liabilities are largely dependent upon the distribution of income among these different
jurisdictions. Various factors may have favorable or unfavorable effects on our effective income tax rate. These
factors include interpretations of existing tax laws, the accounting for stock options and other share-based
compensation, changes in tax laws and rates, future levels of research and development spending, changes in
accounting standards, changes in the mix of earnings in the various tax jurisdictions in which we operate, the
outcome of examinations by the U.S. Internal Revenue Service and other tax authorities, the accuracy of our
estimates for unrecognized tax benefits and realization of deferred tax assets and changes in overall levels of
pre-tax earnings. A change in tax laws, treaties or regulations, or their interpretation, of any country in which we
operate could result in a higher tax rate on our earnings, which could result in a significant negative impact on
our earnings and cash flow from operations. For example, the Biden administration has proposed significant
changes to the tax laws of the United States, including proposals that would have the combined effect of
increasing the U.S. taxation on profits earned outside the U.S. In addition to proposed tax law reforms in the
United States, there are currently multiple initiatives for comprehensive tax reform underway in other key
jurisdictions where we have operations. We assess the impact of various international tax reform proposals and
modifications to existing tax treaties in all jurisdictions where we have operations that could result in a material
impact on our income taxes. Beginning in 2022, the Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminates the
option to deduct research and development expenditures currently and requires taxpayers to amortize them over
five years pursuant to the Internal Revenue Code. We cannot predict whether any other specific legislation that
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would have an adverse impact on our income taxes will be enacted or the terms of any such legislation. However,
if such proposals were enacted, or if modifications were to be made to certain existing treaties, the consequences
could have a materially adverse impact on us, including increasing our tax burden, increasing costs of our tax
compliance or otherwise adversely affecting our financial condition, results of operations and cash flows.
Various international tax risks could adversely affect our earnings and cash flows.
We are subject to international tax risks. We could be subject to double taxation on income related to
operations in certain countries that do not have tax treaties with the country of the trading partner. In addition, we
may have a higher effective income tax rate than that of other companies in our industry if losses incurred by one
operating company are not available to offset the income of an operating company located in another country. Also,
distributions of earnings and other payments received from our subsidiaries may be subject to withholding taxes
imposed by the countries where they are operating or are incorporated. If these foreign countries do not have
income tax treaties with the United States or the countries where our subsidiaries are incorporated, we could be
subject to high rates of withholding taxes on these distributions and payments. Additionally, the amount of the
credit that we may claim against our U.S. federal income tax for foreign income taxes paid or accrued is subject to
many limitations which may significantly restrict our ability to claim a credit for all of the foreign taxes we pay.
We currently have reserves established for potential tax liabilities. If these reserves are challenged, and we
are unable to successfully defend our tax positions, a negative impact to our cash flows could result.
The unpredictability and fluctuation of our quarterly results may adversely affect the trading price of our
common stock.
Our revenues and results of operations have in the past and will in the future vary from quarter to quarter
due to a number of factors, many of which are outside our control and any of which may cause our stock price to
fluctuate. The primary factors that may affect us include the following:
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the timing of sales of our products and services;
the timing of recognizing revenue and deferred revenue under U.S. GAAP;
changes in our pricing policies or the pricing policies of our competitors;
increases in sales and marketing, product development or administration expenses;
the mix of services provided by us and third-party contractors;
our ability to attain and maintain quality levels for our products; and
costs related to acquisitions of technology or businesses.
We can experience quarter-to-quarter fluctuations in our operating results as a result of various factors,
some of which are outside our control, such as:
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the timing of governmental stimulus programs and academic research budgets;
the time it takes between the date customer orders and deposits are received, systems are shipped and
accepted by our customers and full payment is received;
foreign currency exchange rates;
the time it takes for us to receive critical materials to manufacture our products;
general economic conditions;
the time it takes to satisfy local customs requirements and other export/import requirements;
the time it takes for customers to construct or prepare their facilities for our products; and
the time required to obtain governmental licenses.
29
These factors have in the past affected the amount and timing of revenue recognized on sales of our products
and receipt of related payments and will likely continue to do so in the future. Accordingly, our operating results in
any particular quarter may not necessarily be an indication of any future quarter’s operating performance.
Historically we have higher levels of revenue in the fourth quarter of the year compared to the first, second
and third quarters, which we believe is primarily the result of our customers’ budgeting cycles.
Quarter-to-quarter comparisons of our results of operations should not be relied upon as an indication of our
future performance. It is likely that in some future quarters, our results of operations may be below the
expectations of public market analysts and investors. In this event, the price of our common stock may fall.
The ownership of our shares is highly concentrated, which could cause or exacerbate volatility in our share
price as well as have significant influence over us.
As of February 15, 2022, Laukien family members, including our Chairman, President and Chief Executive
Officer (“CEO”) Frank Laukien and his brother, Joerg Laukien, owned, in the aggregate, approximately 32% of
our outstanding common stock. We may also repurchase shares in the future, which could further increase the
concentration of our share ownership. Because of this reduced liquidity, the trading of relatively small quantities
of shares by our shareholders could disproportionately influence the price of those shares in either direction. The
price for our shares could, for example, decline precipitously if a large number of our shares were sold on the
market without commensurate demand, as compared to a company with greater trading liquidity that could better
absorb those sales without adverse impact on its share price. These stockholders may also exercise substantial
influence over all matters requiring stockholder approval, including the election of directors and approval of
significant corporate transactions. This could have the effect of delaying or preventing a change in control of our
company and will make some transactions difficult to accomplish without the support of these stockholders.
The loss of key personnel or an inability to attract and retain additional personnel could affect our ability to
successfully grow our business.
We are highly dependent upon the continued service and performance of our CEO and other members of
senior management and key finance, technical, scientific and production personnel, any of whom may cease their
employment with us at any time with minimal advance notice. Because the expertise of these individuals is
highly specific and takes years to develop, we face intense competition for these individuals from many other
companies. The loss of one or more of our key employees may significantly delay or prevent the achievement of
our business objectives, and our failure to attract and retain suitably qualified individuals or to adequately plan
for succession could have an adverse effect on our ability to implement our business plan.
Dividends on our common stock could be reduced or eliminated in the future.
In recent years, we have paid dividends on our common stock. In February 2022, we announced that our
Board of Directors (“Board”) had declared a quarterly dividend of $0.05 per share that, will be payable in March
2022. There is no guarantee that such dividends will continue indefinitely. In the future, our Board may
determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase
shares or conserve capital resources.
Risks Related to Our Dependence on Third Parties
If we lose our strategic partners, our marketing and sales efforts could be impaired.
A substantial portion of our sales of selected products consists of sales to third parties who incorporate our
products into their systems. These third parties are responsible for the marketing and sales of their systems. We
have little or no control over their marketing and sales activities or how they use their resources. Our present or
future strategic partners may or may not purchase sufficient quantities of products from us or perform appropriate
marketing and sales activities. In addition, if we are unable to maintain our relationships with strategic partners,
our businesses may suffer. Failures by our present or future strategic partners, or our inability to maintain
30
existing or enter into new arrangements with strategic partners for product distribution, could materially impede
the growth of our businesses and our ability to generate sufficient revenue and profits.
We face risks related to sales through distributors and other third parties that we do not control, which could
harm our business.
We sell some products through third party agents, including distributors and value-added resellers. This
exposes us to various risks, including competitive pressure, concentration of sales volumes, credit risks, and
compliance risks. We may rely on one or a few key distributors for a product or market, and the loss of these
distributors could reduce our revenue and net earnings. Distributors may also face financial difficulties, including
bankruptcy, which could harm our collection of accounts receivable. Risks related to our use of distributors may
reduce sales, increase expenses, and weaken our competitive position. Moreover, violations of the FCPA or
similar anti-bribery laws by distributors or other third-party agents could materially and adversely impact our
business, reputation and results of operations.
Dependence on contract manufacturing may adversely affect our ability to bring products to market and
damage our reputation.
As part of our efforts to streamline our operations and reduce our operating costs, we outsource certain
aspects of our manufacturing processes and continue to evaluate additional outsourcing. If our contract
manufacturers fail to perform their obligations in a timely manner or at satisfactory quality levels, our ability to
bring products to market and our reputation could suffer. For example, during a market upturn, our contract
manufacturers may be unable to meet our demand requirements, which may preclude us from fulfilling our
customers’ orders on a timely basis. The ability of these manufacturers to perform is largely outside our control.
Additionally, changing or replacing our contract manufacturers could cause disruptions or delays. Problems with
outsourced manufacturing could result in lower revenues and unexecuted efficiencies, and adversely affect our
financial condition and results of operations.
Our operations are dependent upon a limited number of suppliers and contract manufacturers.
We currently purchase components used in our products from a limited number of outside suppliers. Our
reliance on a limited number of suppliers could result in time delays associated with redesigning a product due to
an inability to obtain an adequate supply of required components and reduced control over pricing, quality and
timely delivery. Any of these factors could adversely affect our revenues and profitability. In particular, our
X-ray microanalysis business, which manufactures and sells accessories for electron microscopes, is partially
dependent on cooperation from larger manufacturers of electron microscopes. Additionally, our elemental
analysis business purchases certain optical detectors from a single supplier, PerkinElmer, Inc., the sole supplier
of these detector components. Bruker CALID purchases detectors and power supplies from sole or limited source
suppliers and its focal plane array detectors from a single supplier, Lockheed Martin Corporation. Similarly,
Bruker BioSpin obtains various components from sole or limited source suppliers and BEST obtains various raw
materials and uses key production equipment from sole or limited source suppliers or contract manufacturers.
There are limited, if any, available alternatives to these suppliers. The existence of shortages of these components
or the failure of delivery with regard to these components could have a material adverse effect upon our revenues
and margins. In addition, price increases from these suppliers or contract manufacturers could have a material
adverse effect upon our gross margins.
Because of the scarcity of some components, we may be unable to obtain an adequate supply of
components, or we may be required to pay higher prices or to purchase components of lesser quality. Any delay
or interruption in the supply of these or other components could impair our ability to manufacture and deliver our
products, harm our reputation and cause a reduction in our revenues. In addition, any increase in the cost of the
components that we use in our products could make our products less competitive and decrease our gross profits.
We may not be able to obtain sufficient quantities of required components on the same or substantially the same
terms. Additionally, consolidation among our suppliers could result in other sole source suppliers for us in the
31
future. Other events that could affect our ability to source materials, manufacture or distribute our products
include fire, natural disaster or extreme weather or a pandemic and the impact of those events on our and our
suppliers’ and contract manufacturers’ operations.
Supply shortages and increasing prices of raw materials could adversely affect our gross profit.
The last few years have seen periodic supply shortages and sharp increases in the prices for various raw
materials, in part due to high demand from developing countries, which have been exacerbated by the COVID-19
pandemic. We rely on some of these materials for the production of our products. For example, in our
superconducting magnet production, both for the horizontal and vertical magnet series, we rely on the availability
of copper, steel and the metallic raw materials for traditional low-temperature superconducting wires. Similarly,
our BEST Segment relies on the availability of niobium titanium for its production of low-temperature
superconducting materials and devices. Higher prices for these commodities will increase the production cost of
superconducting wires and superconducting magnets and may adversely affect gross profits.
The prices of copper and certain other raw materials used for superconductors have increased significantly
over the last decade. Since copper is a main constituent of low temperature superconductors, this may affect the
price of superconducting wire. This type of increase would have an immediate effect on the production costs of
superconducting magnets and may negatively affect the profit margins for those products.
In order to operate superconducting magnets, we and our customers rely on liquid helium. Helium is
controlled by the Federal Helium Reserve and is subject to price changes. Shortages of liquid helium associated
with federal price controls or depleted natural reserves could drive increases in helium pricing and have an
adverse impact on producing and operating our superconducting magnets, which may negatively impact the
profit margins of those products.
Risks Related to Our Intellectual Property Rights
Our success depends on our ability to operate without infringing or misappropriating the proprietary rights of
others.
Our commercial success depends on avoiding the infringement of other parties’ patents and proprietary
rights as well as avoiding the breach of any licenses relating to our technologies and products. Given that there
may be patents of which we are unaware, particularly in the United States where patent applications are
confidential, avoidance of patent infringement may be difficult. Various third parties hold patents which may
relate to our technology, and we may be found in the future to infringe these or other patents or proprietary rights
of third parties, either with products we are currently marketing or developing or with new products which we
may develop in the future. If a third-party holding rights under a patent successfully asserts an infringement
claim with respect to any of our current or future products, we may be prevented from manufacturing or
marketing our infringing product in the country or countries covered by the patent we infringe, unless we can
obtain a license from the patent holder. We may not be able to obtain such a license on commercially reasonable
terms, if at all, especially if the patent holder is a competitor. In addition, even if we can obtain a license, it may
be non-exclusive, which will permit others to practice the same technology licensed to us. We also may be
required to pay substantial damages to the patent holder in the event of infringement. Under some circumstances
in the United States these damages could include damages equal to triple the actual damages the patent holder
incurs. If we have supplied infringing products to third parties for marketing by them or licensed third parties to
manufacture, use or market infringing products, we may be obligated to indemnify these third parties for any
damages they may be required to pay to the patent holder and for any losses the third parties may sustain
themselves as the result of lost sales or license payments they are required to make to the patent holder. Any
successful infringement action brought against us may also adversely affect marketing of the infringing product
32
in other markets not covered by the infringement action, as well as our marketing of other products based on
similar technology. Furthermore, we will suffer adverse consequences from a successful infringement action
against us even if the action is subsequently reversed on appeal, nullified through another action or resolved by
settlement with the patent holder. The damages or other remedies awarded, if any, may be significant. As a
result, any successful infringement action against us may harm our business.
If we are unable to effectively protect our intellectual property, third parties may use our technology, which
would impair our ability to compete in our markets.
Our continued success will depend in significant part on our ability to obtain and maintain meaningful patent
protection for our products throughout the world. We rely on patents to protect a significant part of our intellectual
property and to enhance our competitive position. However, our presently pending or future patent applications may
not issue as patents, and any patent previously issued to us may be challenged, invalidated, held unenforceable or
circumvented. Furthermore, the claims in patents which have been issued, or which may be issued to us in the
future, may not be sufficiently broad to prevent third parties from producing competing products similar to our
products. In addition, the laws of various foreign countries in which we compete may not protect our intellectual
property to the same extent as do the laws of the United States. Failure to obtain adequate patent protection for our
proprietary technology could materially impair our ability to be commercially competitive.
In addition to patent protection, we also rely on the protection of trade secrets, know-how and confidential and
proprietary information. To maintain the confidentiality of trade secrets and proprietary information, we generally
seek to enter into confidentiality agreements with our employees, consultants and strategic partners upon the
commencement of a relationship with us. However, we may not obtain these agreements in all circumstances. In the
event of unauthorized use or disclosure of this information, these agreements, even if obtained, may not provide
meaningful protection for our trade secrets or other confidential information. In addition, adequate remedies may
not exist in the event of unauthorized use or disclosure of this information. The loss or exposure of our trade secrets
and other proprietary information would impair our competitive advantages and could have a material adverse effect
on our operating results, financial condition and future growth prospects. Furthermore, others may have, or may in
the future independently develop, substantially similar or superior know-how and technology.
We may be involved in lawsuits to protect or enforce our patents that are brought by us which could be
expensive and time consuming and, if determined adversely, could adversely affect our patent position.
In order to protect or enforce our patent rights, we may initiate patent litigation against third parties, and we
may be similarly sued by others. We may also become subject to interference proceedings conducted in the
patent and trademark offices of various countries to determine the priority of inventions. The defense and
prosecution, if necessary, of intellectual property suits, interference proceedings and related legal and
administrative proceedings is costly and diverts our technical and management personnel from their normal
responsibilities. We may not prevail in any of these suits. An adverse determination of any litigation or defense
proceedings could put our patents at risk of being invalidated or interpreted narrowly and could put our patent
applications at risk of not issuing.
Furthermore, because of the substantial amount of discovery required in connection with intellectual
property litigation, there is a risk that some of our confidential information could be compromised by disclosure
during this type of litigation. In addition, during the course of this kind of litigation, there could be public
announcements of the results of hearings, motions or other interim proceedings or developments in the litigation.
If securities analysts or investors perceive these results to be negative, it could have a substantial negative effect
on the trading price of our common stock.
On September 25, 2019, in a complaint filed in the Düsseldorf, Germany, District Court, Carl Zeiss
Microscopy GmbH, a subsidiary of Carl Zeiss AG (Zeiss), sued Luxendo GmbH (Luxendo), a subsidiary of
Bruker Corporation, for infringement of a recently registered German utility model patent licensed to Zeiss
pertaining to one specific Luxendo product category. We are vigorously defending against these claims.
33
Risks Related to Legal, Regulatory and Compliance
Our manufacture and sale of products could lead to product liability claims for which we could have
substantial liability.
The manufacture and sale of our products expose us to product liability claims if any of our products cause
injury or are found otherwise unsuitable during manufacturing, marketing, sale or customer use. In particular, if one
of our CBRNE detection products malfunctions, this could lead to civilian or military casualties in a time of unrest,
exposing us to increased potential for high-profile liability. If our CBRNE detection products malfunction by
generating a false-positive to a potential threat, we could be exposed to liabilities associated with actions taken that
otherwise would not have been required. Additionally, the nuclear magnetic resonance, research magnetic
resonance imaging, Fourier transform mass spectrometry and certain electron paramagnetic resonance magnets of
Bruker BioSpin utilize high magnet fields and cryogenics to operate at approximately 4 Kelvin, the temperature of
liquid helium. There is an inherent risk of potential product liability due to the existence of these high magnetic
fields, associated stray fields outside the magnet, and the handling of the cryogens associated with superconducting
magnets. In addition, our MALDI Biotyper product has an IVD-CE mark and U.S. FDA approval and is used for the
identification of microorganisms. Misidentification or a false-negative of certain viruses, bacteria, yeasts or fungi
could lead to inappropriate treatment for patients and could expose us to product liability claims.
A successful product liability claim brought against us in excess of, or outside the coverage of, our
insurance coverage could have a material adverse effect on our business, financial condition and results of
operations. We may not be able to maintain product liability insurance on acceptable terms, if at all, and
insurance may not provide adequate coverage against potential liabilities.
We are subject to environmental laws and regulations, which may impose significant compliance or other
costs on us.
Our manufacturing, product development and research and development operations and processes involve
the controlled use of certain hazardous materials. In addition, we own and/or lease a number of facilities, some of
which have been in operation for many decades, where we or others may have used substances or generated and
disposed of wastes which are considered hazardous or may be considered hazardous in the future. We also have
acquired various companies which historically may have used certain hazardous materials and which may have
owned and/or leased facilities at which hazardous materials have been used. For all of these reasons, we are
subject to federal, state, foreign, and local laws and regulations governing the use, manufacture, storage,
transportation, handling, treatment, remediation, and disposal of hazardous materials and certain waste products.
We have potential liability under these laws and regulations with respect to the remediation of past contamination
in certain of the facilities we now own or lease. Additionally, in the future our facilities and the disposal sites
owned by others to which we send or sent waste, may be identified as contaminated and require remediation.
Accordingly, we may become subject to additional compliance costs or environmental liabilities which may be
significant and could materially harm our results of operations or financial condition.
Specifically, we use controlled hazardous and radioactive materials in our business and generate wastes that
are regulated as hazardous wastes under U.S. federal, and Massachusetts, California, New Jersey, Washington
and Wisconsin state environmental and atomic energy regulatory laws and under equivalent provisions of law in
those and other jurisdictions in which our research and manufacturing facilities are located. Our use of these
substances and materials is subject to stringent, and periodically changing, regulation that can impose costly
compliance obligations on us and has the potential to adversely affect our manufacturing activities. The risk of
accidental contamination or injury from these materials cannot be completely eliminated. If an accident with
these substances occurs, we could be held liable for any damages that result, in addition to incurring clean-up
costs and liabilities, which can be substantial. Additionally, an accident could damage our research and
manufacturing facilities resulting in delays and increased costs.
34
We are subject to existing and potential additional regulation and government inquiry, which can impose
burdens on our operations and narrow the markets for our products.
We are subject, both directly and indirectly, to the adverse impact of existing and potential future
government regulation of our operations and markets. For example, the exportation of our products is subject to
U.S. and non-U.S. export control, sanctions, customs, import and anti-boycott laws and regulations, including, as
applicable, the International Traffic in Arms Regulations, the Export Administration Regulations and the
sanctions laws, regulations and executive orders administered and enforced by the U.S. Department of the
Treasury’s Office of Foreign Assets Control, and other laws and regulations adopted by the governments or
agencies of other countries relating to the same subject matter as the U.S. laws and regulations described above.
The failure to satisfy export control criteria or obtain necessary clearances could delay or prevent shipment
of products, which could adversely affect our revenues and profitability. Failure by us, our employees or others
working on our behalf to comply with these laws and regulations could result in administrative, civil or criminal
liabilities, including suspension, debarment from bidding for or performing government contracts, or suspension
of our export privileges, which could have a material adverse effect on us. We frequently team with international
subcontractors and suppliers who are also exposed to similar risks. In some cases, compliance with the laws and
regulations of one country could violate the laws and regulations of another country. Violations of these laws and
regulations could materially adversely affect our brand, international growth efforts and business.
In addition, as a result of our international operations, we are subject to compliance with various laws and
regulations, including the FCPA and local anti-bribery laws in the jurisdictions in which we do business (including
some higher risk countries according to the Transparency International Corruption Index), which generally prohibit
companies and their intermediaries or agents from engaging in bribery or making improper payments to foreign
officials or their agents. The FCPA also requires proper record keeping and characterization of such payments in our
reports filed with the SEC. Despite maintaining policies and procedures that require our employees to comply with
these laws and our standards of ethical conduct, we cannot ensure that these policies and procedures will always
protect us from intentional, reckless or negligent acts committed by our employees or third-party agents.
Moreover, the life sciences industry, which is the market for our principal products, has historically been
heavily regulated. Given the evolving nature of this industry, legislative bodies or regulatory authorities may
adopt additional regulation that adversely affects our market opportunities. Our business is also directly affected
by a wide variety of government regulations applicable to business enterprises generally and to companies
operating in the life sciences industry in particular.
Our products are subject to the FDA’s requirements for electronic radiation emitting products, which
include requirements related to record-keeping and reporting; labeling; notification; product repairs,
replacements, and refunds; importation; and performance standards. In addition, our clinical products are subject
to regulation as medical devices by the FDA in the United States and by similar regulatory bodies in other
countries where such products are sold. These regulations govern a wide variety of product related activities,
from quality management, design, development, and testing to labeling, manufacturing, complaint handling,
reporting, promotion, sales and distribution. Compliance with applicable regulatory requirements is subject to
continual review and is monitored rigorously through periodic inspections by the FDA and other regulatory
authorities, which may result in written inspectional observations. The FDA and comparable foreign regulatory
authorities also monitor product promotion and marketing materials and activities. If we or any of our suppliers
or distributors fail to comply with FDA or other applicable regulatory requirements, or are perceived to
potentially have failed to comply, we may face, among other things, warning letters; adverse publicity affecting
both us and our customers; investigations or notices of non-compliance, fines, injunctions, and civil penalties;
import or export restrictions; partial suspensions or total shutdown of production facilities or the imposition of
operating restrictions; increased difficulty in obtaining required FDA clearances or approvals or foreign
equivalents; seizures or recalls of our products or those of our customers; or the inability to sell such products.
Any such FDA or comparable foreign regulatory actions could disrupt our business and operations, lead to
significant remedial costs and have a material adverse impact on our financial position and results of operations.
35
In addition, negative publicity and product liability claims resulting from any adverse regulatory action could
have a material, adverse effect on our financial condition and results of operations. Further, the adoption of the
European Union Directive by the IVD Regulation (EU) 2017/746, which will take effect in May 2022, imposes a
stricter regime on manufacturers of IVDs and our products currently approved under the Directive must be
recertified under the Regulation by May 2024.
We have been, are, and expect to be in the future, subject to inquiries from the government agencies that
enforce these regulations, including the U.S. Department of State, the U.S. Department of Commerce, the U.S.
FDA, the U.S. Internal Revenue Service, the U.S. Department of Labor, the U.S. Department of Homeland
Security, the U.S. Department of Justice, the SEC, the Federal Trade Commission, U.S. Customs and Border
Protection and the U.S. Department of Defense, among others, as well as from state or foreign governments and
their departments and agencies. As a result, from time to time, the attention of our management and other
resources may be diverted to attend to these inquiries. In addition, failure to comply with these regulations or
obtain or maintain necessary permits and licenses could result in a variety of fines or other censures or an
interruption in our business operations which may have a negative impact on our ability to generate revenues and
could adversely affect our financial condition and results of operations.
Failure to maintain effective internal controls may cause a loss of investor confidence in the reliability of our
financial statements or cause us to delay filing our periodic reports with the SEC and adversely affect our
stock price.
The SEC, as directed by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring public
companies to include a report of management on internal control over financial reporting in their annual reports
on Form 10-K that contain an assessment by management of the effectiveness of our internal control over
financial reporting. In addition, our independent registered public accounting firm must attest to and report on the
effectiveness of our internal control over financial reporting. Although we test our internal control over financial
reporting in order to ensure compliance with the Section 404 requirements, our failure to maintain adequate
internal controls over financial reporting could result in an adverse reaction in the financial marketplace due to a
loss of investor confidence in the reliability of our financial statements or a delay in our ability to timely file our
periodic reports with the SEC, which ultimately could negatively impact our stock price.
We operate as an entrepreneurial, decentralized company, which presents both benefits and certain risks. In
particular, significant growth in a decentralized operating model may put strain on certain business group
resources and our corporate functions, which could materially and adversely affect our business, financial
condition and results of operations.
Decentralization necessarily places significant control and decision-making powers in the hands of local
management, which presents certain risks, including the risk that we may be slower to detect or react to compliance-
related matters and that “company-wide” business initiatives may be more challenging or costly to implement, and
the risk of noncompliance or failures higher than they may be in a more centralized operating environment. In
addition, key business group resources and our corporate functions, which are leanly staffed but responsible for
supporting our decentralized operations, may also not be able to detect or resolve financial, operational, and
compliance matters on a timely basis. Our failure to adapt our financial, operational and compliance controls and
systems to effectively manage our decentralized business and comply with our obligations as a public company
could materially and adversely affect our business, financial condition or results of operations.
General Risks Factors
If we are not able to successfully integrate the businesses we acquire through mergers, acquisitions or
strategic alliances, we may not be able to realize all of the cost savings and other benefits that we expect to
result from the transactions and our financial results may be different than expected.
Our strategy includes expanding our technology base and product offerings through selected mergers,
acquisitions and strategic alliances. For example, from January 1, 2019 to December 31, 2021, we have acquired
13 businesses to expand our technologies and product offerings.
36
Successful integration of the businesses we acquire involves a number of risks, including, among others,
risks related to:
•
•
•
•
•
•
•
coordinating or consolidating geographically separate organizations and integrating personnel with
different business backgrounds and corporate cultures;
integrating previously autonomous departments in sales and marketing, distribution, accounting and
administrative functions;
integrating financial information and management systems;
the pace of our acquisition activity and the related diversion of already limited resources and
management time;
disruption of our ongoing business;
potential impairment of relationships with customers as a result of changes in management or
otherwise arising out of such transactions; and
retention of key employees of the acquired businesses within the first one to two years after the
acquisition, including the risk that they may compete with us subsequently.
We may have difficulty developing, manufacturing and marketing the products of a newly acquired
company or business in a way that enhances the performance of our combined businesses or product lines. As a
result, we may not realize the value from expected synergies. Acquisitions have resulted, and may in the future
result, in unexpected significant costs and expenses, including disputes over contingent consideration and
complicated accounting for complex transaction structures. In the future, we may be required to record charges to
earnings during the period if we determine there is an impairment of goodwill or intangible assets, up to the full
amount of the value of the assets.
We generally assume the liabilities of businesses we acquire, which could include liability for an acquired
business’ violation of law that occurred before we acquired it. In addition, we have historically acquired smaller,
privately held companies that may not have strong cultures of legal compliance or the robust financial controls of
a larger, publicly traded company, and if we fail to implement adequate training, controls, and monitoring of the
acquired companies, we could also be liable for post-acquisition legal or accounting violations.
Other companies may have difficulty acquiring us, even if doing so would benefit our stockholders, due to
provisions under our corporate charter and bylaws, as well as Delaware law.
Provisions in our restated certificate of incorporation, and our amended and restated bylaws, as well as
Delaware law could make it more difficult for other companies to acquire us, even if doing so would benefit our
stockholders. Our restated certificate of incorporation, and amended and restated bylaws contain the following
provisions, among others, which may inhibit an acquisition of our company by a third party:
•
•
•
•
a staggered Board of Directors, where stockholders elect only a minority of the board each year;
advance notification procedures for matters to be brought before stockholder meetings;
a limitation on who may call stockholder meetings; and
the ability of our Board of Directors to issue up to 5,000,000 shares of preferred stock without a
stockholder vote.
ITEM 1B UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2 PROPERTIES
We believe that our existing principal facilities are well maintained and in good operating condition and that
they are adequate for our foreseeable business needs.
37
In addition to the principal facilities noted below, we lease additional facilities for sales, applications and
service support in various countries throughout the world including Australia, Austria, Belgium, Brazil, China,
Czech Republic, France, Germany, Hong Kong, India, Israel, Italy, Japan, Kenya, Malaysia, Mexico, Netherlands,
Norway, Poland, Portugal, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan,
Thailand, Turkey, the United Kingdom and the United States. If we should require additional or alternative
facilities, we believe that such facilities can be obtained on short notice at competitive rates.
The location and general character of our principal properties are as follows:
Location
Principal Facilities Used in Current
Operations for Bruker BioSpin:
Principal Use
Approximate
Square Feet
Relationship
Ettlingen, Germany . . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Faellanden, Switzerland . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Wissembourg, France . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Principal Facilities Used in Current
Operations for Bruker CALID:
Bremen, Germany . . . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Ettlingen, Germany . . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Nehren, Germany . . . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Principal Facilities Used in Current
Operations for BSI Nano:
Karlsruhe, Germany . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Berlin, Germany . . . . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Santa Barbara, CA, U.S.A. . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Graz, Austria . . . . . . . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
38
360,000
Owned
422,000
61,000
Owned
Leased
189,000
Owned
298,000
Owned
182,000
Owned
89,000
Owned/
Leased
145,000
Owned
243,000
Owned
100,000
Owned
30,000
Leased
Location
Principal Use
Penang, Malaysia . . . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Migdal Ha’Emek, Israel . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Principal Facilities Used in Current
Operations for BEST:
Perth, Scotland . . . . . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Hanau, Germany . . . . . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Bergisch Gladbach, Germany . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Carteret, NJ, U.S.A.
. . . . . . . . . . . . . . . Manufacturing, Research and
Development, Application and
Demonstration, Marketing, Sales and
Administrative
Shared Principal Facilities:
Billerica, MA, U.S.A. . . . . . . . . . . . . . . Research and Development, Application
and Demonstration, Marketing, Sales and
Administrative
Approximate
Square Feet
Relationship
100,000
Leased
22,000
Leased
47,000
Owned
138,000
Leased
134,000
Leased
115,000
Leased
200,000
Owned
ITEM 3 LEGAL PROCEEDINGS
We are involved in lawsuits, claims, and proceedings, including, but not limited to, patent and commercial
matters, which arise in the ordinary course of business. There are no such matters pending that we currently believe
are reasonably likely to have a material impact on our business or to our consolidated financial statements.
Details on recent legal matters can be found in Note 17 to our consolidated financial statements included in
this Annual Report on Form 10-K under Item 8.
In addition, we are subject to regulation by national, state and local government agencies in the United
States and other countries in which we operate. From time to time, we are the subject of governmental
investigations often involving regulatory, marketing and other business practices. These governmental
investigations may result in the commencement of civil and criminal proceedings, fines, penalties and
administrative remedies which could have a material adverse effect on our financial position, results of
operations and/or liquidity.
ITEM 4 MINE SAFETY DISCLOSURES
Not applicable.
39
PART II
ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Prices
Our common stock is traded on the Nasdaq Global Select Market under the symbol “BRKR.”
As of February 15, 2022, there were approximately 87 holders of record of our common stock. This number
does not include individual beneficial owners of shares held in nominee name or within clearinghouse positions
of brokerage firms and banks.
Dividends
In February 2016, we announced the establishment of a dividend policy and the declaration by our Board of
Directors of an initial quarterly cash dividend in the amount of $0.04 per share of our issued and outstanding
common stock. Beginning in 2022, we are targeting a quarterly cash dividend to our shareholders in the amount
of $0.05 per share of our issued and outstanding common stock and in February 2022 announced that our Board
had approved a quarterly dividend for the first quarter of 2022 of $0.05 per share, payable in March. Future
dividend payments, if any, are subject to approval of our Board of Directors.
Stock Price Performance Graph
The graph below compares Bruker Corporation’s annual percentage change in cumulative total return on
common shares over the past five years with the cumulative total return of companies comprising the Nasdaq US
Benchmark TR Index and the SIC Code 3826 Laboratory Analytical Instruments Index. This presentation
assumes that $100 was invested in shares of the relevant issuers on December 31, 2016, and that dividends
received were immediately invested in additional shares. The graph plots the value of the initial $100 investment
at one-year intervals for the fiscal years shown. The Nasdaq US Benchmark TR Index replaces the CRSP Nasdaq
Stock Market (US Companies) Index in this analysis and going forward, as the CRSP Index data is no longer
accessible. The CRSP index has been included with data through 2020.
Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2021
450.00
400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
0.00
2016
2017
2018
2019
2020
2021
Bruker Corporation
NASDAQ US Benchmark TR Index
NASDAQ Stock Market (US Companies)
SIC Code 3826 Laboratory Analytical Instruments
40
Cumulative Total Return Index for:
2016
2017
2018
2019
2020
2021
Bruker Corporation . . . . . . . . . . . . . . . . . . . . . . . . .
Nasdaq US Benchmark TR Index . . . . . . . . . . . . . .
Nasdaq Stock Market (US companies) . . . . . . . . . .
SIC Code 3826 Laboratory Analytical
$100.0
100.0
100.0
$162.96
121.38
129.30
$142.07
114.77
127.19
$244.14
150.55
173.11
$260.20
182.57
249.17
$404.24
229.84
—
Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100.0
151.99
158.88
202.04
269.90
336.07
The data for this performance graph was compiled by Zack’s Investment Research, Inc. and is used with its
permission.
Issuer Purchases of Securities
The following table provides information about purchases made by or on behalf of the Company or any
“affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, during the quarter ended
December 31, 2021 of shares of our common stock.
Period
October 1—October 31,
2021 . . . . . . . . . . . . . . . . .
November 1—November 30,
2021 . . . . . . . . . . . . . . . . .
December 1—December 31,
2021 . . . . . . . . . . . . . . . . .
Total Number of
Shares Purchased
(1)
Average Price
Paid per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
Maximum Number (or
Approximate Dollar Value) of
Shares that May Yet Be
Purchased Under the Plans
or Programs (2)
—
$ —
—
$463,380,168
634,855
$82.32
634,855
$411,119,634
371,659
1,006,514
$80.70
$81.72
371,659
1,006,514
$381,127,281
$381,127,281
(1) The Company purchased shares of common stock in accordance with its share repurchase program approved
by the Board of Directors and announced on May 12, 2021 (the “2021 Repurchase Program”). The shares
were purchased on the open market at prevailing prices.
(2) The 2021 Repurchase Program authorizes the purchase of the Company’s common stock of up to
$500.0 million from time to time over a two-year period, in amounts, at prices, and at such times as
management deems appropriate, subject to market conditions, legal requirements and other considerations.
At February 23, 2022, $374.9 million remains for future purchase under the 2021 Repurchase Program.
In May 2019, the Company’s Board of Directors approved a share repurchase plan (the “2019 Repurchase
Program”) authorizing the purchase of the Company’s common stock of up to $300.0 million from time to time,
in amounts, at prices, and at such times as management deems appropriate, subject to market conditions, legal
requirements and other considerations. We purchased a total of 555,602 shares at an aggregate cost of
$34.5 million under the 2019 Repurchase Program during the year ended December 31, 2021. We completed the
2019 Repurchase Program in April 2021, after reaching the maximum cumulative spend.
We purchased a total of 1,537,217 shares of common stock with an aggregate cost of approximately
$118.9 million under the 2021 Repurchase Program during the year ended December 31, 2021. Any future
purchases will be funded from cash on hand, future cash flows from operations and available borrowings under
our revolving credit facility.
ITEM 6 RESERVED
41
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in
conjunction with our consolidated financial statements and notes to those statements, appearing elsewhere in this
report. This report contains forward-looking statements reflecting our current expectations that involve risks and
uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements
made in this report should be read as applying to all related forward-looking statements wherever they appear in
this report. Our actual results may differ materially from those indicated in the forward-looking statements due
to a number of factors, including those discussed in Item 1A, Risk Factors and elsewhere in this report.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations, or
MD&A, describes the principal factors affecting the results of our operations, financial condition and changes in
financial condition, as well as our critical accounting policies and estimates. Our MD&A is organized as follows:
• Non-GAAP Measures. This section provides appropriate disclosures regarding forward looking
statements and our use of Non-GAAP financial measures.
• Overview. This section provides a brief discussion of our reportable segments’ results of operations,
significant recent developments in our businesses, and challenges and risks that may impact our
businesses in the future.
• Results of Operations. This section provides our analysis of the significant line items on our
consolidated statements of income and comprehensive income for the year ended December 31, 2021
compared to the year ended December 31, 2020.
•
Liquidity and Capital Resources. This section provides an analysis of our liquidity and cash flow and a
discussion of our outstanding debt and commitments.
• Critical Accounting Policies and Estimates. This section discusses the accounting estimates that are
considered important to our financial condition and results of operations and require us to exercise
subjective or complex judgments in their application. All of our significant accounting policies are
summarized in Note 2 to our consolidated financial statements in Item 8 of this Annual Report on
Form 10-K.
• Recent Accounting Pronouncements. This section provides a summary of recent accounting
pronouncements and discusses their potential impact on our consolidated financial statements.
Non-GAAP Measures
Although our consolidated financial statements have been prepared in accordance with generally accepted
accounting principles in the United States of America (“GAAP”), we believe describing revenue and expenses,
excluding the effects of foreign currency, acquisitions and divestitures, as well as certain other charges, net,
provides meaningful supplemental information regarding our performance. We rely internally on certain
measures that are not calculated according to GAAP. These measures are organic revenue, free cash flow,
non-GAAP gross profit margin and non-GAAP operating margin. Our management believes that these financial
measures provide relevant and useful information that is widely used by equity analysts, investors and
competitors in our industry, as well as by our management, in assessing both consolidated and business unit
performance. We define the term organic revenue as GAAP revenue excluding the effect of foreign currency
translation changes and the effect of acquisitions and divestitures. We define the term non-GAAP gross profit
margin as GAAP gross profit margin with certain non-GAAP measures excluded and non-GAAP operating
margin as GAAP operating margin with certain non-GAAP measures excluded. These non-GAAP measures
exclude costs related to restructuring actions, acquisition and related integration expenses, amortization of
acquired intangible assets, costs associated with our global information technology transition initiatives, and
other non-operational costs and we believe these are useful measures to evaluate our continuing business.
42
We define free cash flow as net cash provided by operating activities less additions to property, plant, and
equipment. We believe free cash flow is a useful measure to evaluate our business as it indicates the amount of
cash generated after additions to property, plant, and equipment which is available for, among other things,
investments in our business, acquisitions, share repurchases, dividends and repayment of debt. We regularly use
these non-GAAP financial measures internally to understand, manage, and evaluate our business results and
make operating decisions. We also measure our employees and compensate them, in part, based on such
non-GAAP measures and use this information for our planning and forecasting activities. These measures may
also be useful to investors in evaluating the underlying operating performance of our business. The presentation
of these non-GAAP financial measures is not intended to be a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP and may be different from non-GAAP financial
measures used by other companies, and therefore, may not be comparable among companies.
OVERVIEW
We are a developer, manufacturer and distributor of high-performance scientific instruments and analytical
and diagnostic solutions that enable our customers to explore life and materials at microscopic, molecular and
cellular levels. Our corporate headquarters are located in Billerica, Massachusetts. We maintain major technical
and manufacturing centers in Europe, Asia and North America and we have sales offices located throughout the
world. Bruker is organized into three reportable segments: the BSI Life Science Segment (comprised of the
Bruker BioSpin Group and the Bruker CALID Group), the BSI Nano Segment and the Bruker Energy &
Supercon Technologies (BEST) Segment.
Revenue for the year ended December 31, 2021 increased by $430.4 million, or 21.7%, to $2,417.9 million,
compared to $1,987.5 million for the comparable period in 2020. Included in revenue was an increase of
approximately $43.3 million from foreign currency translation and an increase of $8.1 million from acquisitions.
Excluding the effects of foreign currency translation and our recent acquisitions, our organic revenue,
a non-GAAP measure, increased $379.0 million. Revenue increases were driven by strong demand for our
products and solutions, as well as a robust recovery compared to the same period in 2020.
Our gross profit margin increased to 50.0% for the year ended December 31, 2021 as compared to 47.3% in
the same period in 2020, the result of volume leverage.
The income tax provision for the years ended December 31, 2021 and December 31, 2020 was
$113.0 million and $64.4 million, respectively, representing effective tax rates of 28.7% and 28.5%, respectively.
The increase in our effective tax rate was primarily due to additional tax reserves for uncertain tax positions in
2021 and the impact of U.S. tax on foreign earnings, partially offset by the impact of discrete items in the period.
Diluted earnings per share for the year ended December 31, 2021 was $1.81, an increase of $0.79, compared
to $1.02 per share in the same period in 2020. The increase in earnings per diluted share was primarily driven by
higher revenue, favorable volume and operating leverage compared to the same period in 2020.
The following table presents a reconciliation from net cash provided by operating activities, which is the
most directly comparable GAAP operating financial measure, to free cash flow as used by management (in
millions):
Net cash provided by operating activities . . . . . . . . . . . . . . . . .
. . . . . . . . . .
Less: purchases of property, plant and equipment
$282.4
(92.0)
$332.2
(97.2)
Free cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$190.4
$235.0
Year Ended
December 31,
2021
2020
43
For the year ended December 31, 2021, our free cash flow was 19% lower than the same period in 2020,
primarily from an increase in working capital due to increased accounts receivable from higher revenues and
timing of receivables and strategic inventory build for 2021 orders and supply chain management.
The following table presents a reconciliation from gross profit and gross profit margin, which are the most
directly comparable GAAP operating performance measures, to non-GAAP gross profit and non-GAAP gross
profit margin as used by management (dollars in millions):
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-GAAP adjustments:
Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition-related costs . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchased intangible amortization . . . . . . . . . . . . . . . . . . . .
Other costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2021
2020
$1,209.6
50.0% $939.8
47.3%
0.1%
3.4
0.7 —
20.2
1.1
0.9%
0.1%
0.2%
3.8
0.8 —
19.9
3.7
1.0%
0.2%
Non-GAAP gross profit . . . . . . . . . . . . . . . . . . . . . . . .
$1,235.0
51.1% $968.0
48.7%
Our non-GAAP gross profit margin was 51.1% and 48.7% in the years ended December 31, 2021 and 2020,
respectively. The increases in our non-GAAP gross profit margins were driven by higher revenue and volume
leverage, compared to 2020 which was negatively impacted by the COVID-19 pandemic. Contributions from
higher margin products also favorably impacted our gross profit margin in the year ended December 31, 2021.
The following table presents a reconciliation from operating income and operating margin, which are the
most directly comparable GAAP operating performance measures, to non-GAAP operating income and
non-GAAP operating margin as used by management (in millions):
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-GAAP adjustments:
Year Ended December 31,
2021
2020
$413.3
17.1% $248.3
12.5%
Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition-related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchased intangible amortization . . . . . . . . . . . . . . . . . . . . .
Other costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.2
6.9
37.4
4.4
0.3%
0.3%
1.5%
0.2%
15.8
3.2
35.7
14.2
0.8%
0.2%
1.8%
0.7%
Non-GAAP operating income . . . . . . . . . . . . . . . . . . . . .
$470.2
19.4% $317.2
16.0%
Our non-GAAP operating margin was 19.4% and 16.0% for the years ended December 31, 2021 and 2020,
respectively. The increase in our non-GAAP operating margins was driven by higher revenue and volume and
operating leverage, compared to 2020 which was negatively impacted by the COVID-19 pandemic.
Contributions from higher margin products also favorably impacted our operating margin in the year ended
December 31, 2021.
We can experience quarter-to-quarter fluctuations in our operating results as a result of various factors,
some of which are outside our control, such as:
•
•
the impact of the COVID-19 global pandemic on our customers, supply chain or manufacturing
capabilities;
the impact of certain weather-related disruptions, such as the recent flooding in Germany and other
parts of Europe;
44
•
•
•
•
•
•
•
•
the timing of governmental stimulus programs and academic research budgets;
the time it takes between the date customer orders and deposits are received, systems are shipped and
accepted by our customers and full payment is received;
foreign currency exchange rates;
the time it takes for us to receive critical materials to manufacture our products;
general economic conditions, including the impact of COVID-19 or other factors on the global
economy;
the time it takes to satisfy local customs requirements and other export/import requirements;
the time it takes for customers to construct or prepare their facilities for our products; and
the time required to obtain governmental licenses.
Several of these factors have in the past affected the amount and timing of revenue recognized on sales of
our products and receipt of related payments and will likely continue to do so in the future. Accordingly, our
operating results in any particular quarter may not necessarily be an indication of any future quarter’s operating
performance. The COVID-19 pandemic continues to present a challenging operating environment. During the
COVID-19 pandemic, we have been focused on and continue to focus on four key priorities: the health and safety
of our employees, customers and partners; maintaining business continuity and service levels for our customers;
executing prudent temporary cost reductions based on demand; and delivering enabling research and diagnostic
products to help fight the pandemic, and to support other essential priorities of our society.
Health and safety of our valued employees, customers and partners
We have implemented strict social distancing, enhanced cleaning protocols and other preventative measures,
such as company-issued face coverings and mandatory mask protocols for unvaccinated employees, in our major
facilities. While many of our office colleagues are working remotely, we are placing enhanced focus on our
service organization and factory employees for whom work from home is not feasible. Where customer sites are
accessible and open, our field service organizations operate under social distancing protocols with proper face
coverings to ensure the safety of customer sites, when our employees need to be on site. Many of our facilities
have begun to plan for employees who have been working remotely during the pandemic to gradually return to
the office. Employee and visitor health and safety will remain our paramount concern.
Maintaining business continuity and service levels for our customers
Ensuring our ability to supply our enabling technologies and solutions and maintaining high service levels
for our customers is another top priority for Bruker. In late March and during parts of April 2020, several of our
manufacturing sites underwent temporary controlled shutdowns or were operating at reduced capacity to
implement new safety protocols, comply with local rules, and manage cost and inventory levels. These sites
thereafter ramped back up with expanding capacity and productivity levels. However, with any resurgence of the
virus or the emergence of additional strains of the virus, particularly any new strains of the virus that are more
resistant to existing vaccines, we may again need to consider temporary controlled shutdowns or reduced
capacity measures. In addition, we are continuing capital investments in production facilities for efficiencies and
expansion. We continue to manage supply chain risks, more recently associated with the economic recovery from
the pandemic, like the worldwide shortage of semiconductor chips, components and raw materials, such as
copper.
Executing prudent temporary cost reductions
During a period of reduced demand due to COVID-19 in 2020, we implemented temporary cost reduction
measures in an effort to mitigate the negative impacts on our business of COVID-19 and the related slowdown in
45
the global economy. These temporary measures included short-time work for many of our European operations,
temporary tiered salary reductions for our Board of Directors, global leadership team and workforce, one-to
two-week closures of select manufacturing locations, selective product manufacturing reductions, a hiring freeze,
and curtailment of non-strategic discretionary spending. At the same time, we looked to minimize the disruption
for our employees and preserve our ability to ramp up again with our highly trained and loyal work force. While
pursuing cost savings throughout the business, we have maintained our important investments in key strategic
initiatives. These cost reduction measures have since been relaxed, as our revenue has recovered. We could in
fact experience increased compensation expenses associated with employee recruiting and employee retention to
the extent employment opportunities continue multiplying post-pandemic, causing the search for and retention of
talent to remain and become more competitive.
Delivering enabling research and diagnostic products to help fight the pandemic and to support other essential
priorities of our society
Bruker is providing critical technologies and solutions to help combat the COVID-19 crisis, most notably
our Microbiology and infectious disease diagnostics portfolio and our nuclear magnetic resonance and mass
spectrometry systems which are used in critical disease, therapeutic and vaccine research.
The COVID-19 global pandemic has driven volatility and uncertainty in global markets and has in the past
affected our operations significantly. We continue to work to manage the impact of COVID-19 on our
operations; however, the full extent to which any resurgence of the virus, the emergence of any new strains of the
virus, or the availability and effectiveness of COVID-19 vaccines will impact our business, directly or indirectly,
cannot accurately be predicted at this time. We continue to monitor the impact of COVID-19 on our business and
our supply chain and respond accordingly. For additional information on the various risks posed by
the COVID-19 pandemic, refer to Item 1A. Risk Factors included in this report.
RESULTS OF OPERATIONS
A discussion regarding our results of operations for the fiscal year ended December 31, 2020 compared to
2019 can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31,
2020, filed with the SEC on March 1, 2021, which is available on the SEC’s website at www.sec.gov and our
Investor Relations website at https://.ir.bruker.com under the “Financial Info” section.
Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020
Consolidated Results
The following table presents our results for the years ended December 31, 2021 and 2020 (dollars in
millions):
Year Ended December 31,
2021
2020
Product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,017.3
393.2
7.4
$1,638.1
343.4
6.0
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of product revenue . . . . . . . . . . . . . . . . . . . . . . .
Cost of service revenue . . . . . . . . . . . . . . . . . . . . . . . .
Cost of other revenue . . . . . . . . . . . . . . . . . . . . . . . . .
Total cost of revenue . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,417.9
979.3
228.2
0.8
1,208.3
1,209.6
1,987.5
840.2
206.5
1.0
1,047.7
939.8
46
Dollar
Change
$379.2
49.8
1.4
430.4
139.1
21.7
(0.2)
160.6
269.8
Percentage
Change
23.1%
14.5%
23.3%
21.7%
16.6%
10.5%
(20.0)%
15.3%
28.7%
Year Ended December 31,
2021
2020
Dollar
Change
Percentage
Change
Operating expenses:
Selling, general and administrative . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . . .
Other charges, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . .
Interest and other income (expense), net
Income before income taxes and noncontrolling
interest in consolidated subsidiaries . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated net income . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests in
consolidated subsidiaries . . . . . . . . . . . . . . . . . . . .
561.2
220.8
14.3
796.3
413.3
(19.7)
393.6
113.0
280.6
468.6
198.0
24.9
691.5
248.3
(22.5)
225.8
64.4
161.4
92.6
22.8
(10.6)
104.8
165.0
2.8
167.8
48.6
119.2
3.5
3.6
(0.1)
Net income attributable to Bruker Corporation . . . . .
$277.1
$157.8
$119.3
19.8%
11.5%
(42.6)%
15.2%
66.5%
(12.4)%
74.3%
75.5%
73.9%
(2.8)%
75.6%
Revenue
Revenue increases were driven by strong broad demand for our products and solutions, and the business and
end market recovery as compared to the same period in 2020.
Gross Profit
The increase in gross profit was a result of higher revenue, volume leverage and favorable product mix.
Selling, General and Administrative
Our selling, general and administrative expenses for the year ended December 31, 2021 decreased to 23.2%
of total revenue from 23.6% of total revenue for the comparable period in 2020. The increase in dollars was a
result of the cost control and cost reduction measures implemented during the COVID-19 pandemic in 2020 that
did not occur in 2021. The decrease as a percentage of revenue was a result of the increase in revenue period over
period and the delayed timing of certain investments.
Research and Development
Our research and development expenses for the year ended December 31, 2021 decreased to 9.1% of total
revenue from 10.0% of total revenue for the comparable period in 2020. The increase in dollars was a result of
the cost control and cost reduction measures implemented during the COVID-19 pandemic in 2020 that did not
occur in 2021.The decrease as a percentage of revenue was a result of the increase in revenue period over period
and the delayed timing of certain investments.
Other Charges, Net
Other charges, net for the year ended December 31, 2021 consisted primarily of $6.1 million of acquisition-
related charges related to acquisitions completed in 2021 and 2020, $4.8 million of restructuring costs related to
closing facilities and implementing outsourcing and other restructuring initiatives, $2.8 million of costs
associated with our global IT transformation activities, $1.1 million related to professional fees and ($0.5)
million related to long-lived asset impairments.
47
Other charges, net for the year ended December 31, 2020 consisted primarily of $12.0 million of
restructuring costs related to closing facilities and implementing outsourcing and other restructuring initiatives,
$5.9 million related to professional fees, $2.5 million of costs associated with our global IT transformation
activities, $2.4 million of acquisition-related charges related to acquisitions completed in 2020 and 2019 and
$2.1 million related to long-lived asset impairments.
Operating Income
The increase in operating income was due to higher revenue, gross profit and favorable operating leverage
in the year ended December 31, 2021 as our business and end markets rebounded, as compared to the same
period in 2020 which was negatively impacted by the COVID-19 pandemic and related economic slowdown.
Interest and Other Income (Expense), Net
The decline in net interest and other expense in the year ended December 31, 2021, as compared to the same
period in 2020 was primarily due to the impact of foreign currency exchange rates.
Income Tax Provision
The effective tax rates for years ended 2021 and 2020 were 28.7% and 28.5%, respectively. The increase in
our effective tax rate for the year ended December 31, 2021, compared to 2020, was primarily due to additional
tax reserves for uncertain tax positions in 2021 and the impact of U.S. tax on foreign earnings, partially offset by
the impact of discrete items in the period.
Net Income Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interest
The net income attributable to noncontrolling interests represented the minority shareholders’ proportionate
share of the net income recorded by our majority-owned subsidiaries. In January 2020, we acquired the
remaining 20% non-controlling interests from Hain LifeScience GmbH shareholders.
Net Income Attributable to Bruker Corporation
The increase in net income and earnings per diluted share was primarily driven by the increase in revenue,
gross profit and operating profit as a result of strengthened demand and recovery in our business and end
markets.
Segment Results
Revenue
The following table presents revenue, change in revenue, and revenue growth by reportable segment for the
years ended December 31, 2021 and 2020 (dollars in millions):
BSI Life Science . . . . . . . . . . . . . . . . . . . . . . . . .
BSI Nano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations (a) . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
2020
Dollar Change
$1,510.6
697.5
223.8
(14.0)
$1,253.9
556.1
189.5
(12.0)
$2,417.9
$1,987.5
$256.7
141.4
34.3
(2.0)
$430.4
Percentage
Change
20.5%
25.4%
18.1%
21.7%
(a) Represents product and service revenue between reportable segments.
48
The increase in revenue for the BSI Life Science segment for the year ended December 31, 2021 was due to
strong demand and end market recovery across the segment’s major product lines, including mass spectrometry,
infrared, Raman, microbiology, Nuclear Magnetic Resonance (NMR) and Preclinical Imaging (PCI) solutions. In
addition, system installation activities recovered compared to the same period in 2020. The increase in revenue
for the BSI Nano Segment was driven by a rebound in industrial research and academic market demand and
continued strong demand from semiconductor and microelectronics customers and our X-ray products. The
increase in revenue for the BEST Segment resulted from higher “big science” project revenue and a recovery in
superconductors for healthcare MRI for the year ended December 31, 2021.
Operating Income
The following table presents operating income and operating margins on revenue by reportable segment for
the years ended December 31, 2021 and 2020 (dollars in millions):
2021
2020
Operating
Income (Loss)
Percentage of
Segment
Revenue
Operating
Income (Loss)
Percentage of
Segment
Revenue
BSI Life Science . . . . . . . . . . . . . . . . . .
BSI Nano . . . . . . . . . . . . . . . . . . . . . . . .
BEST . . . . . . . . . . . . . . . . . . . . . . . . . . .
. .
Corporate, eliminations and other (a)
Total operating income . . . . . . . . .
$385.4
73.4
22.2
(67.7)
$413.3
25.5%
10.5%
9.9%
17.1%
$273.8
23.6
6.2
(55.3)
$248.3
21.8%
4.2%
3.3%
12.5%
(a) Represents corporate costs and eliminations not allocated to the reportable segments.
The operating margin increases in the BSI Life Science and BSI Nano Segments resulted from higher
revenue, volume and operating leverage. The operating margin increase in the BEST Segment resulted from
higher revenue and favorable mix.
LIQUIDITY AND CAPITAL RESOURCES
We anticipate that our existing cash, cash equivalents, short-term investments and credit facilities will be
sufficient to support our operating and investing needs for at least the next twelve months. Our future cash
requirements could be affected by acquisitions that we may complete, purchases of our common stock or the
payment of dividends in the future. Historically, we have financed our growth and liquidity needs through cash
flow from operations and a combination of debt financings and issuances of common stock. In the future, there
are no assurances that we will continue to generate cash flow from operations or that additional financing
alternatives will be available to us, if required, or if available, will be obtained on terms favorable to us.
Cash, cash equivalents and short-term investments at December 31, 2021 and 2020 totaled $1,168.2 million
and $731.8 million, respectively, of which $646.9 million and $514.9 million, respectively, related to cash, cash
equivalents and short-term investments is held outside of the U.S. in our foreign subsidiaries, most significantly
in the Netherlands, Switzerland and Hong Kong.
49
The following table presents our cash flows from operating activities, investing activities and financing
activities for the periods presented (in millions):
Net cash provided by operating activities . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . .
Effect of exchange rates on cash and cash equivalents
Year Ended December 31,
2021
2020
$ 282.4
(192.4)
318.7
$ 332.2
(192.7)
(161.6)
and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(22.5)
25.7
Total increase in cash and cash equivalents and restricted
cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 386.2
$
3.6
Cash provided by operating activities during the year ended December 31, 2021 resulted from consolidated
net income adjusted for non-cash items of $408.0 million, partially offset by a change in operating assets and
liabilities, net of acquisitions and divestitures of $125.6 million. The primary increase is a result of increased net
income driven by the increase in revenue, gross profit and operating profit as a result of the rebounding in our
business and end markets. The decrease in cash flows due to change in operating assets and liabilities, net of
acquisitions for the year ended December 31, 2021 was primarily due to increases in inventory in response to
supply chain challenges, timing of tax payments and increased accounts receivable at the end of 2021 due to
higher revenues. These decreases were partially offset by a decrease in timing of payments as compared to the
same period in the prior year. During the year ended December 31, 2020, net cash provided by operating
activities resulted from consolidated net income adjusted for non-cash items of $262.6 million, offset by a change
in operating assets and liabilities, net of acquisitions and divestitures of $69.6 million. The increase in cash flows
due to changes in operating assets and liabilities, net of acquisitions for the year ended December 31, 2020 was
primarily caused by a decrease in accounts receivable due to increased cash collections, increased customer
advances related to COVID-19 order increases late in 2020 offset by a strategic inventory build for 2021 orders
and supply chain management.
Cash used in investing activities during the year ended December 31, 2021 resulted primarily from
purchases of property, plant and equipment of $92.0 million, acquisitions of $65.0 million and purchases of
short-term investments, net of maturities of $49.8 million, offset by $10.0 million of net proceeds from our cross-
currency swap agreements and proceeds from sales of property, plant and equipment of $4.9 million. Cash used
in investing activities during the year ended December 31, 2020 was primarily attributed to net capital
expenditures of $97.2 million, net cash paid for acquisitions of $59.2 million and purchases of short-term
investments, net of maturities of $43.9 million.
We currently expect capital expenditures in 2022 to be approximately $115.0 million.
Net cash provided by financing activities during the year ended December 31, 2021 was primarily from
proceeds from the 2021 Note Purchase Agreement of $492.8 million, offset by cash paid for purchases of
common stock under our repurchase program of $153.3 million and $24.2 million for the payment of dividends.
Net cash used in financing activities during the year ended December 31, 2020 was primarily attributable to
$123.2 million used for the purchase of common stock under our repurchase program, $24.6 million used for the
payment of dividends, $7.6 million in net payments of borrowings under the 2019 Revolving Credit Agreement
and a $7.5 million payment of contingent consideration.
Share Repurchase Program
In May 2019, our Board of Directors approved a share repurchase program (the “2019 Repurchase
Program”) authorizing the purchase of our common stock of up to $300.0 million from time to time, in amounts,
50
at prices, and at such times as management deems appropriate, subject to market conditions, legal requirements
and other considerations. We purchased a total of 555,602 shares at an aggregate cost of $34.5 million under the
2019 Repurchase Program during the year ended December 31, 2021. We completed the 2019 Repurchase
Program in April 2021, after reaching the maximum cumulative spend.
In May 2021, our Board of Directors approved a share repurchase program (the “2021 Repurchase
Program”) authorizing the purchase of our common stock up to $500.0 million from time to time over a two-year
period, in amounts, at prices, and at such times we deem appropriate, subject to market conditions, legal
requirements and other conditions. We purchased a total of 1,537,217 shares at an aggregate cost of
$118.9 million under the 2021 Repurchase Program during the year ended December 31, 2021. As of
February 23, 2022, $374.9 million remains for future purchases under the 2021 Repurchase Program. We intend
to fund any additional purchases from cash on hand, future cash flows from operations and available borrowings
under the revolving credit facility.
Income Taxes
At December 31, 2021 and in accordance with the tax reform legislation signed by the president of the
United States on December 22, 2017, or the 2017 Tax Act, we recorded state and foreign withholding taxes, as
well as subsequent foreign currency translations on these withholding taxes as they are an obligation of the
parent company, on the cash and liquid assets portion of the unremitted earnings and profits (E&P) of foreign
subsidiaries expected to be repatriated from our foreign subsidiaries to the United States. We continue to be
indefinitely reinvested in the amount of $546 million of non-cash E&P that is subject to the 2017 Tax Act
deemed repatriation. If this E&P is ultimately distributed to the United States in the form of dividends or
otherwise we would likely be subject to additional withholding tax. We will continue to evaluate our assertions
on the cumulative historical outside basis differences in our foreign subsidiaries as of December 31, 2021. The
amount of unrecognized deferred withholding taxes on the undistributed E&P was $69 million at December 31,
2021.
As of December 31, 2021, we had approximately $89.4 million of net operating loss carryforwards available
to reduce state taxable income that are expected to expire at various times beginning in 2022; approximately
$86.1 million of net operating losses available to reduce German federal income and trade taxes that are carried
forward indefinitely and $6.4 million of other foreign net operating losses that are expected to expire at various
times in the future. We had U.S. federal foreign tax credit carried forwards in the amount of $6.3 million. We
also had U.S. federal and state research and development tax credits of $4.6 million and $7.8 million,
respectively. Utilization of these credits and state net operating losses may be subject to annual limitations due to
the ownership percentage change limitations provided by Internal Revenue Code Section 382 and similar state
provisions. In the event of a deemed change in control under Internal Revenue Code Section 382, an annual
limitation on the utilization of net operating losses and credits may result in the expiration of all or a portion of
the net operating loss and credit carryforwards. Additionally, the Company has $40.2 million of gross interest
expense carryforward as provided by Code Section 163(j) that can be carried forward indefinitely.
Uncertain tax contingencies are positions taken or expected to be taken on an income tax return that may
result in additional payments to tax authorities. If a tax authority agrees with the tax position taken or expected to
be taken or the applicable statute of limitations expires, then additional payments will not be necessary.
Credit Facilities
On December 7, 2021, the Company entered into a note purchase agreement to issue and sell CHF
300 million aggregate principal amount of 0.88% series A senior notes and EUR 150 million aggregate principal
amount of 1.03% series B senior notes due December 8, 2031. We designated our CHF 300 million series A
senior notes as a hedge in our net investment in our Swiss Franc denominated net assets. We designated our EUR
150 million series B senior notes as a hedge in our net investment in our Euro denominated net assets. Proceeds
of the notes will be used for general corporate purposes.
51
On December 11, 2019, we entered into (1) a new revolving credit agreement to establish a new revolving
credit facility in the aggregate principal amount of $600 million; (2) a term loan agreement to establish a new
term loan facility in the aggregate principal amount of $300 million; and (3) a note purchase agreement to issue
and sell CHF 297 million aggregate principal amount of 1.01% senior notes due December 11, 2029. Floating
interest rates under the term loan were simultaneously fixed through cross-currency and interest rate swap
agreements into Euro ($150 million) and Swiss Franc ($150 million) rates carrying average effective interest
rates of 0.94% and hedge our net investment in our Euro and Swiss Franc denominated net assets. The new
revolving credit agreement replaced our $500 million five-year revolving credit agreement established on
October 27, 2015, that was terminated on December 11, 2019.
In addition, we designated our CHF 297 million senior notes as a hedge in our net investment in our Swiss
Franc denominated net assets. Proceeds from this financing were used to repay the outstanding borrowings under
our prior 2015 revolving credit facility and we intend to use the remaining proceeds for general corporate
purposes and to support corporate strategic objectives. During December 2019, we entered into U.S. Dollar to
Euro cross-currency swaps on our existing 2012 private placement notes of $105 million 4.31% Series 2012A
Senior Notes, Tranche C, due January 18, 2022 and subsequently paid in January 2022, and the existing
$100 million 4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024, resulting in an average
effective interest rate of 2.25% on these instruments. The cross-currency swaps hedge our net investment in our
Euro denominated net assets.
As of December 31, 2021, we have several cross-currency and interest rate swap agreements with a notional
value of $149.6 million of U.S. Dollar to Swiss Franc and a notional value of $354.7 million of U.S. Dollar to
Euro to hedge the variability in the movement of foreign currency exchange rates on portions of our Euro and
Swiss Franc denominated net asset investments. As a result of these agreements, we lowered our net interest
expense by $5.5 million and $7.2 million during the year ended December 31, 2021 and 2020, respectively. We
anticipate these swap agreements will lower net interest expense by approximately $4.6 million in 2022 and
$7.4 million in 2023.
We had the following debt outstanding (in millions):
EUR notes (in dollars) under the 2021 Note Purchase Agreement . . . .
. . . .
CHF notes (in dollars) under the 2021 Note Purchase Agreement
. . . .
CHF notes (in dollars) under the 2019 Note Purchase Agreement
U.S. Dollar notes under the 2019 Term Loan . . . . . . . . . . . . . . . . . . . .
U.S. Dollar notes under the 2012 Note Purchase Agreement
. . . . . . . .
Unamortized debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total notes and loans outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt
2021
2020
$ 170.7
329.2
325.9
299.2
205.0
(2.0)
1.9
1,329.9
4.3
1,334.2
(112.4)
$ —
—
335.5
300.0
205.0
(2.4)
3.0
841.1
3.4
844.5
(2.2)
Total long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . .
$1,221.8
$842.3
There was no amount outstanding under the 2019 Credit Agreement as of December 31, 2021 or 2020.
52
Annual maturities of notes and loans outstanding are as follows (in millions):
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter
$ 111.1
15.8
115.2
15.5
15.2
1,059.1
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,331.9
As of December 31, 2021, we had no off-balance sheet arrangements and we were in compliance with the
financial covenants of these debt arrangements.
The following is a summary of the maximum commitments and the net amounts available to us under the
2019 Credit Agreement and other banking working capital lines and guarantees of credit with various financial
institutions located primarily in Germany and Switzerland that are unsecured and typically due upon demand at
December 31, 2021 (dollars in millions):
Weighted
Average
Interest Rate
Total Amount
Committed by
Lenders
Outstanding
Borrowings
Outstanding
Letters of
Credit
. . . . . . . . . . . . . . . . .
2019 Credit Agreement
Bank guarantees and working capital line . . .
1.3%
varies
Total revolving lines of credit . . . . . . . .
$600.0
116.2
$716.2
$—
—
$—
$
0.2
116.2
$116.4
As of December 31, 2021, we were in compliance with the covenants of all debt agreements.
Total
Committed
Amounts
Available
$599.8
—
$599.8
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our consolidated financial statements have been prepared in conformity with accounting principles
generally accepted in the United States of America, or U.S. GAAP, which requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts of revenues and expenses during the
reporting period.
We consider our accounting estimates to be critical to the consolidated financial statements if (i) the
estimate requires significant judgment or is complex in nature and (ii) if different estimates and assumptions
were used, the results could have a material impact on our consolidated financial statements. We evaluate our
estimates and the application of our policies on an ongoing basis.
We base our estimates and judgments on our historical experience, current market and economic conditions,
industry trends, and other assumptions that we believe are reasonable. Actual results could differ from these
estimates. Changes in estimates are recorded in the period in which they become known.
We believe the following critical accounting policies and estimates to be both those most important to the
portrayal of our financial position and results of operations and those that require the most estimation and
subjective judgment.
Revenue recognition
We recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from
Contracts with Customers (ASC 606). The key elements of ASC 606 are: 1) identifying a contract with the
53
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 our 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, we allocate 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. Our best evidence of standalone selling price is our normal selling
pricing and discounting practices for the specific product or service when sold on a standalone basis.
Alternatively, when not sold separately, we may determine standalone selling price using an expected cost plus a
margin approach.
Our 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. For
performance obligations recognized over time, revenue is measured by progress toward completion of the
performance obligation that reflects the transfer of control. 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 us to make reasonable
estimates of the extent of progress toward completion and the total costs we expect to incur. Losses are recorded
immediately when we estimate that contracts will ultimately result in a loss. Changes in the estimates could
affect the timing of revenue recognition.
We include 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 our obligation to ship the products to our
customers, we have elected the practical expedient to account for the shipping services as a fulfillment cost. We
expense 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. We exclude from the transaction price all taxes assessed by a
governmental authority on revenue-producing transactions that are collected by us from a customer.
We recognize revenue from systems sales upon transfer of control in an amount that reflects the
consideration we expect to receive. Transfer of control generally occurs upon shipment, or for certain systems,
based upon customer acceptance for a system once delivered and installed at a customer facility. For systems that
include customer-specific acceptance criteria, we are required to assess when we can demonstrate the acceptance
criteria has been met, which generally is upon successful factory acceptance testing or customer acceptance and
evidence of installation. For systems that require installation and where system revenue is recognized upon
shipment, the standalone selling price of installation is deferred until customer acceptance. Revenue from
accessories and parts is generally recognized based on shipment. Service revenue is recognized as the services
are performed or ratably over the contractual obligation and includes maintenance contracts, extended warranties,
training, application support and on-demand services.
When products are sold through an independent distributor or a strategic distribution partner, we recognize
the system sale upon transfer of control which is typically on shipment. When we are responsible for installation,
the standalone selling price of installation is deferred until customer acceptance. Our distributors do not have
price protection rights or rights of return; however, our products are typically warranted to be free from defect for
a period of one year.
54
We require an advance deposit based on the terms and conditions of contracts with customers for many of
our contracts. Typically, revenue is recognized within one year of receiving an advance deposit. We do not have
any material payment terms that extend beyond one year. There is minimal variable consideration included in the
transaction price of our contracts.
Other revenues are primarily comprised of development arrangements recognized on a cost-plus-fixed-fee
basis and licensing arrangements recognized either when the licenses are provided or ratably over the contract
term depending on the nature of the arrangement.
Income taxes
Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A
valuation allowance is applied against any net deferred tax asset if, based on the available evidence, it is more
likely than not that some or all of the deferred tax assets will not be realized.
We record liabilities related to uncertain tax positions in accordance with the guidance that clarifies the
accounting for uncertainty in income taxes recognized in our financial statements. This guidance prescribes a
minimum recognition threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. We include accrued interest and
penalties related to unrecognized tax benefits and income tax liabilities, when applicable, in income tax expense.
Inventories
All inventories are stated at the lower of cost and net realizable value. Cost is determined principally by the
first-in, first-out method for a majority of subsidiaries and by average-cost for certain other subsidiaries. We
reduce the carrying value of our inventories for differences between cost and estimated net realizable value,
taking into consideration usage in the preceding twelve months, expected demand, technological obsolescence
and other information including the physical condition of demonstration inventories. We record a charge to cost
of product revenue for the amount required to reduce the carrying value of inventory to net realizable value.
Costs associated with the procurement of inventories, such as inbound freight charges and purchasing and
receiving costs, are capitalized as part of inventory and are also included in the cost of product revenue line item
within the consolidated statements of income and comprehensive income.
Goodwill, other intangible assets and other long-lived assets
Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment on an
annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may
not be recoverable. In assessing the recoverability of goodwill and indefinite-lived intangible assets, we must
make assumptions regarding the estimated future cash flows, including forecasted revenue growth and the
discount rate to determine the fair value of these assets. If these estimates or their related assumptions change in
the future, we may be required to record impairment charges against these assets in the reporting period in which
the impairment is determined.
We test goodwill for impairment at the reporting unit level, which is the operating segment or one level
below an operating segment. We have the option of performing a qualitative assessment to determine whether
further impairment testing is necessary before performing the quantitative assessment. If as a result of the
qualitative assessment, it is more-likely-than-not that the fair value of a reporting unit is less than its carrying
amount, a quantitative impairment test will be required. Otherwise, no further testing will be required. If a
quantitative impairment test is performed, we compare the fair values of the applicable reporting units with their
aggregate carrying values, including goodwill. We determine the fair value of reporting units using a weighting
of both the market and the income methodologies. Estimating the fair value of the reporting units requires
55
significant judgment by management. If the carrying amount of a reporting unit exceeds the fair value of the
reporting unit, an impairment charge is recognized for the amount by which the carrying value amount exceeds
the reporting unit’s fair value up to the total amount of goodwill allocated to the reporting unit.
In process research and development, or IPR&D, acquired as part of business combinations under the
acquisition method represents ongoing development work associated with enhancements to existing products, as
well as the development of next generation products. IPR&D is initially capitalized at fair value as an intangible
asset with an indefinite life and assessed for impairment on an annual basis, or when indicators of impairment are
identified. When the IPR&D project is complete, it is reclassified as a finite-lived intangible asset and is
amortized over its estimated useful life. If an IPR&D project is abandoned before completion or is otherwise
determined to be impaired, the value of the asset or the amount of the impairment is charged to the consolidated
statements of income and comprehensive income in the period the project is abandoned or impaired.
Business Combinations
We account for business combinations under the acquisition method of accounting. Accordingly, at the date
of each acquisition, we measure the fair value of all identifiable assets acquired (including intangible assets),
liabilities assumed and any remaining noncontrolling interests and allocate the amounts paid to all items
measured. The fair value of identifiable intangible assets acquired is based on valuations that use information and
assumptions determined by management and which consider management’s best estimates of inputs and
assumptions that a market participant would use.
RECENT ACCOUNTING PRONOUNCEMENTS
Information regarding recently issued accounting pronouncements may be found in Note 3 to our
consolidated financial statements included in this Annual Report on Form 10-K.
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are potentially exposed to market risks associated with changes in foreign currency translation rates,
interest rates and commodity prices. We selectively use financial instruments to reduce these risks. All
transactions related to risk management techniques are authorized and executed pursuant to our policies and
procedures. Analytical techniques used to manage and monitor foreign currency translation and interest rate risk
include market valuations and sensitivity analysis.
We have estimated our market risk exposure using sensitivity analysis. To test the sensitivity of our market
risk exposure, we have estimated the changes in fair value of market risk sensitive instruments assuming a
hypothetical 10 percent adverse change in market prices or rates. The results of the sensitivity analyses are
summarized below.
Foreign Currency Risk
We generate a substantial portion of our revenues in international markets, principally Germany and other
countries in the European Union, Switzerland and Japan, which exposes our operations to the risk of exchange
rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. Our
costs related to sales in foreign currencies are largely denominated in the same respective currencies, reducing
our transaction risk exposure. However, for foreign currency denominated sales in certain regions, such as Japan,
where we do not incur significant costs denominated in Japanese Yen, we are more exposed to the impact of
foreign currency fluctuations. For sales not denominated in U.S. dollars, if there is an increase in the rate at
which a foreign currency is exchanged for U.S. dollars, it will require more of the foreign currency to equal a
specified amount of U.S. dollars than before the rate increase. In such cases, if we price our products in the
foreign currency, we will receive less in U.S. dollars than we would have received before the rate increase went
56
into effect. If we price our products in U.S. dollars and competitors price their products in local currency, an
increase in the relative strength of the U.S. dollar could result in our prices not being competitive in a market
where business is transacted in the local currency. For example, if the U.S. dollar strengthened against the
Japanese Yen, our Japanese-based competitors would have a greater pricing advantage over us.
Our revenue by geography was as follows (dollars in millions):
United States . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rest of world . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
Percentage of
Revenue
24.9%
38.1
30.1
6.9
Revenue
$ 601.0
920.7
729.1
167.1
2020
Percentage of
Revenue
22.9%
38.5
31.7
6.9
Revenue
$ 455.9
764.7
629.1
137.8
Total revenue . . . . . . . . . . . . . . . . . . . . . . .
$2,417.9
100.0%
$1,987.5
100.0%
Changes in foreign currency exchange rates increased our revenue by approximately 2.2% and 1.4% in the
years ended December 31, 2021 and December 31, 2020, respectively.
Assets and liabilities of our foreign subsidiaries, where the functional currency is the local currency, are
translated into U.S. dollars using period end exchange rates, or historical rates, as appropriate. Revenues and
expenses of foreign subsidiaries are translated at the average exchange rates in effect during the year.
Adjustments resulting from financial statement translations are included as a separate component of
shareholders’ equity. In the years ended December 31, 2021 and 2020, we recorded net losses of $26.4 million
and net gains of $22.0 million, respectively, from currency translation adjustments. A 10% depreciation in
functional currencies, relative to the U.S. dollar, at December 31, 2021, would have resulted in a reduction of
shareholders’ equity of approximately $255.8 million. Gains and losses resulting from foreign currency
transactions are reported in interest and other income (expense), net in the consolidated statements of income and
comprehensive income. Our foreign currency transaction gain (loss), net were net losses of $4.1 million and
$7.9 million for years ended December 31, 2021 and 2020, respectively.
The impact of currency exchange rate movement can be positive or negative in any period. We periodically
enter into foreign currency contracts in order to minimize the volatility that fluctuations in currency translation
have on our monetary transactions. Under these arrangements, we typically agree 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, with some agreements extending to longer periods. 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.
As of December 31, 2021, we have several cross-currency and interest rate swap agreements with a notional
value of $149.6 million of U.S. dollar to Swiss Franc and a notional value of $354.7 million of U.S. dollar to
Euro to hedge the variability in the movement of foreign currency exchange rates on portions of our Euro and
Swiss Franc denominated net asset investments. Under the U.S. GAAP hedge accounting guidance, changes in
fair value of the derivative that relates to changes in the foreign currency spot rate are recorded in the currency
translation adjustment in comprehensive income (loss) and remain in accumulated comprehensive income (loss)
in stockholders’ equity until the sale or substantial liquidation of the foreign operation. The difference between
the interest rate received and paid under the interest rate cross-currency swap derivative agreement is recorded in
interest income in the statement of income.
From time to time, we have entered into forward currency contracts designed to minimize the volatility that
fluctuations in foreign currency have on our cash flows related to purchases and sales denominated in foreign
currencies. Under these arrangements, we agree to purchase a fixed amount of a foreign currency in exchange for
57
a fixed amount of U.S. Dollars or other currencies on specified dates typically with maturities of less than twelve
months with some agreements extending to longer periods. These transactions are recorded at fair value with the
corresponding gains and losses recorded in interest and other income (expense), net in the consolidated
statements of income and comprehensive income. At December 31, 2021 and 2020, we had forward currency
contracts with notional amounts aggregating $180.7 million and $278.3 million, respectively. We will continue to
evaluate our currency risks, and in the future, may utilize foreign currency contracts more frequently.
Interest Rate Risk
We regularly invest excess cash in short-term investments that are subject to changes in interest rates. We
believe that the market risk arising from holding these financial instruments is minimal because of our policy of
investing in short-term financial instruments issued by highly rated financial institutions.
Our exposure related to adverse movements in interest rates is derived primarily from outstanding floating
rate debt instruments that are indexed to short-term market rates. We currently have a higher level of fixed rate
debt than variable rate debt, which limits the exposure to adverse movements in interest rates.
Commodity Price Risk
We are exposed to certain commodity risks associated with prices for various raw materials. The prices of
copper and certain other raw materials, particularly niobium-tin, used to manufacture superconductors have
increased significantly over the last decade. Copper and niobium-tin are the main components of low temperature
superconductors and continued commodity price increases for copper and niobium, as well as other raw
materials, may negatively affect our profitability. We have arrangements with certain customers under which we
have a firm commitment to deliver copper based on superconductor wire at a fixed price. In order to minimize
the volatility that fluctuations in the price of copper have on our sales of these commodities, we enter into
commodity hedge contracts. At December 31, 2021 and 2020, we had fixed price commodity contracts with
notional amounts aggregating $5.5 million and $8.8 million, respectively. The fair value of the fixed price
commodity contracts at December 31, 2021 and 2020 was $0.4 million and $3.1 million, respectively. As
commodity contracts settle, gains (losses) as a result of changes in fair values are adjusted to the contracts with
the customers through revenues. We will continue to evaluate our commodity risks and may utilize commodity
forward purchase contracts more frequently in the future.
Inflation Risk
Global inflation increased during 2021 as a result of COVID-19 and associated disruptions in global
demand, logistics, and labor markets. These inflationary conditions could impact our future operating results.
Inflation may affect the costs of materials and services that we use, including raw materials and labor to
manufacture our products, as well as, transportation and logistical costs. We may not be able to recover these
higher costs through increased selling prices due to competition and timing.
Inflation rates may also vary between countries in which we operate. To date, these inflationary conditions
have not had a material effect on our operating results; however, they could have a greater impact on our future
operating results.
58
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index of Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID 238) . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets as of December 31, 2021 and 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2021,
Page
60
63
2020 and 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
64
Consolidated Statements of Redeemable Noncontrolling Interest and Shareholders’ Equity for the years
ended December 31, 2021, 2020 and 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
66
67
59
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Bruker Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Bruker Corporation and its subsidiaries
(the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of income and
comprehensive income, of redeemable noncontrolling interest and shareholders’ equity and of cash flows for
each of the three years in the period ended December 31, 2021, including the related notes (collectively referred
to as the “consolidated financial statements”). We also have audited the Company’s internal control over
financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting
principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining
effective internal control over financial reporting, and for its assessment of the effectiveness of internal control
over financial reporting, included in Management’s Report on Internal Control over Financial Reporting
appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial
statements and on the Company’s internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement, whether due to error or fraud, and whether effective internal control over
financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of
material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
As described in Management’s Report on Internal Control over Financial Reporting, management has
excluded SCI Instruments, SVXR, Inc. and Molecubes NV from its assessment of internal control over financial
reporting as of December 31, 2021 because they were acquired by the Company in purchase business
combinations during 2021. We have also excluded SCI Instruments, SVXR, Inc. and Molecubes NV from our
60
audit of internal control over financial reporting. SCI Instruments, SVXR, Inc. and Molecubes NV are wholly-
owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit
of internal control over financial reporting collectively represent 1.9% and 0.4%, respectively, of the related
consolidated financial statement amounts as of and for the year ended December 31, 2021.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit committee
and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and
(ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we
are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.
Goodwill Impairment Assessment—Reporting Unit in Bruker Scientific Instruments (BSI) Nano Segment
As described in Notes 2 and 9 to the consolidated financial statements, the Company’s consolidated
goodwill balance was $339.5 million as of December 31, 2021, $238.9 million of which relates to the BSI Nano
segment. Management evaluates goodwill for impairment on an annual basis, or on an interim basis when events
or changes in circumstances indicate that the carrying value may not be recoverable. Management tests goodwill
for impairment at the reporting unit level, which is the operating segment or one level below an operating
segment. Management determines the fair value of reporting units using a weighting of both the market and the
income methodologies. In assessing the recoverability of goodwill, management must make assumptions
regarding the estimated future cash flows, including the forecasted revenue growth to determine the fair value. If
the carrying amount of a reporting unit exceeds the fair value of the reporting unit, management recognizes an
impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value up to the
total amount of goodwill allocated to the reporting unit.
The principal consideration for our determination that performing procedures relating to the goodwill
impairment assessment is a critical audit matter is the significant judgment by management when developing the
fair value measurement of the reporting unit. This in turn led to a high degree of auditor judgment, subjectivity
and effort in performing procedures and evaluating management’s significant assumption related to the
forecasted revenue growth. The audit effort also involved the use of professionals with specialized skill and
knowledge.
61
Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. These procedures included testing the
effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the
valuation of the Company’s reporting unit. These procedures also included, among others, testing management’s
process for developing the fair value estimates of the reporting unit; evaluating the appropriateness of using a
weighting of both the market and income methodologies; testing the completeness, accuracy, and relevance of
underlying data used in the methodologies; and evaluating the significant assumption used by management
related to the forecasted revenue growth. Evaluating management’s assumption related to the forecasted revenue
growth involved evaluating whether the assumption used by management was reasonable considering (i) the
current and past performance of the reporting unit, (ii) the consistency with external market and industry data,
and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit. Professionals
with specialized skill and knowledge were used to assist in the evaluation of the Company’s methodologies.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 28, 2022
We have served as the Company’s auditor since 2016.
62
BRUKER CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
Current assets:
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2021
2020
$1,068.2
100.0
416.9
710.1
4.4
172.2
2,471.8
406.1
339.5
211.8
59.9
90.1
70.8
$ 681.8
50.0
335.3
692.3
—
165.6
1,925.0
395.5
320.4
229.1
67.4
72.0
39.6
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,650.0
$3,049.0
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’
EQUITY
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 112.4
147.4
197.5
481.2
$
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies (Note 17)
Redeemable noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity:
Preferred stock, $0.01 par value 5,000,000 shares authorized, none issued or outstanding at
938.5
1,221.8
50.2
46.0
41.8
104.7
162.2
0.2
December 31, 2021 and 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
2.2
134.6
189.2
465.9
791.9
842.3
50.9
43.1
47.0
123.4
176.1
—
—
Common stock, $0.01 par value 260,000,000 shares authorized, 174,905,035 and 174,045,610
shares issued and 150,753,687 and 151,987,081 outstanding at December 31, 2021 and 2020,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock at cost, 24,151,348 and 22,058,529 shares at December 31, 2021 and 2020,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity attributable to Bruker Corporation . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests in consolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.7
1.7
(820.3)
237.8
1,659.5
(8.2)
1,070.5
14.1
(667.0)
216.3
1,406.5
3.7
961.2
13.1
974.3
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,084.6
Total liabilities, redeemable noncontrolling interest and shareholders’ equity . . . . . . . . . . . . .
$3,650.0
$3,049.0
The accompanying notes are an integral part of these consolidated financial statements.
63
BRUKER CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in millions, except per share data)
Year Ended December 31,
2021
2020
2019
Product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,017.3
393.2
7.4
$1,638.1
343.4
6.0
$1,744.7
322.4
5.5
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of service revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,417.9
979.3
228.2
0.8
1,987.5
840.2
206.5
1.0
2,072.6
878.5
198.3
0.5
Total cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,208.3
1,047.7
1,077.3
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,209.6
939.8
995.3
Operating expenses:
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other charges, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes and noncontrolling interests in consolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests in consolidated
561.2
220.8
14.3
796.3
413.3
(19.7)
393.6
113.0
280.6
468.6
198.0
24.9
691.5
248.3
(22.5)
225.8
64.4
161.4
500.2
187.7
6.5
694.4
300.9
(20.5)
280.4
82.4
198.0
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.5
3.6
0.8
Net income attributable to Bruker Corporation . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 277.1
$ 157.8
$ 197.2
Net income per common share attributable to Bruker Corporation shareholders:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation (net of tax of $2.1 million, $1.2 million and
$
$
1.83
1.81
$
$
1.03
1.02
$
$
1.27
1.26
151.4
152.9
$ 280.6
153.4
154.6
$ 161.4
155.2
156.6
$ 198.0
$5.1 million, respectively) adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(77.8)
97.4
(4.3)
Derivatives designated as hedging instruments (net of tax of $12.5 million in
2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51.4
(75.8)
(15.7)
Pension liability adjustments (net of tax of ($3.9) million, ($1.7) million and
$6.3 million, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Comprehensive income attributable to noncontrolling interests . . . . . . . . .
Less: Comprehensive loss attributable to redeemable noncontrolling interest . . .
14.5
268.7
1.0
(0.1)
7.5
190.5
4.0
(0.5)
(23.0)
155.0
1.8
(1.5)
Comprehensive income attributable to Bruker Corporation . . . . . . . . . . . . . . . . .
$ 267.8
$ 187.0
$ 154.7
The accompanying notes are an integral part of these consolidated financial statements.
64
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T
BRUKER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Cash flows from operating activities:
Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile consolidated net income to cash flows from operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-cash expenses, net
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in operating assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2021
2020
2019
$ 280.6
$ 161.4
$ 198.0
89.1
17.2
(5.8)
26.9
(95.3)
(67.0)
61.4
(44.3)
20.3
18.5
(19.2)
80.4
16.0
(22.5)
27.3
40.8
(91.6)
(2.4)
42.9
16.9
51.7
11.3
75.6
9.6
(5.4)
10.1
(5.0)
(60.2)
15.9
13.1
7.3
4.2
(49.8)
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
282.4
332.2
213.4
Cash flows from investing activities:
Purchase of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of investments held to maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net proceeds from cross-currency swap agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(148.0)
98.2
(0.5)
(65.0)
(92.0)
4.9
10.0
(150.0)
106.1
(1.2)
(59.2)
(97.2)
0.2
8.6
(6.4)
—
—
(90.0)
(73.0)
11.0
—
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(192.4)
(192.7)
(158.4)
Cash flows from financing activities:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt
Repayments of revolving lines of credit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from revolving lines of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of other debt, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of common stock, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of dividends to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
492.8
(0.8)
—
—
(2.3)
(0.1)
7.0
(0.4)
(24.2)
(153.3)
—
—
—
(305.1)
297.5
(0.7)
(0.1)
3.3
(7.5)
(24.6)
(123.2)
(1.2)
597.9
(15.0)
(361.9)
250.6
(4.6)
(4.4)
10.9
(6.2)
(25.0)
(142.3)
—
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
318.7
(161.6)
300.0
Effect of exchange rate changes on cash, cash equivalents and restricted cash . . . . . . . . . . . . .
Net change in cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash, cash equivalents and restricted cash at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . .
(22.5)
386.2
685.5
25.7
3.6
681.9
0.6
355.6
326.3
Cash, cash equivalents and restricted cash at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,071.7
$ 685.5
$ 681.9
Supplemental cash flow information:
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
19.6
$ 28.7
$ 16.0
Cash paid for taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 145.5
$ 43.0
$ 61.3
Restricted cash period beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash period ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
3.7
3.5
$
$
3.6
3.7
$
$
3.9
3.6
The accompanying notes are an integral part of these consolidated financial statements.
66
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 operating segments, Bruker BioSpin Group, Bruker CALID Group, Bruker Scientific
Instruments (BSI) Nano Segment and Bruker Energy & Supercon Technologies (BEST). The Company has three
reportable segments, BSI Life Science Segment, BSI Nano Segment and BEST.
For financial reporting purposes, the Bruker BioSpin Group and Bruker CALID Group operating segments
are aggregated into the reportable BSI Life Science 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. Bruker BioSpin Group’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.
Bruker CALID (Chemicals, Applied Markets, Life Science, In-Vitro Diagnostics, Detection) - 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 and for-profit forensics laboratories; agriculture, food and
beverage safety laboratories; environmental and clinical microbiology laboratories; hospitals and
government departments and agencies.
The 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, 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.
The 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.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and all majority
and wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.
67
Noncontrolling Interests
Noncontrolling interests represents the minority shareholders’ proportionate share of the Company’s
majority-owned subsidiaries. The portion of net income or net loss attributable to non-controlling interests is
presented as net income attributable to noncontrolling interests in consolidated subsidiaries in the consolidated
statements of income and comprehensive income, and the portion of other comprehensive income of these
subsidiaries is presented in the consolidated statements of shareholders’ equity.
Redeemable Noncontrolling Interests
The Company has agreements with noncontrolling interest holders that provide the Company with the right
to purchase, and the noncontrolling interest holders with the right to sell, their remaining minority interest at a
contractually defined redemption value. These rights can be accelerated in certain events. As the redemptions are
contingently redeemable at the option of the noncontrolling interest shareholders, the Company classifies the
carrying amount of the redeemable noncontrolling interest in the mezzanine section on the consolidated balance
sheet, which is presented above the equity section and below liabilities. The redeemable noncontrolling interests
are measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date
based on the contractually defined redemption value and its carrying amount adjusted for net income (loss)
attributable to the noncontrolling interest. Adjustments to the carrying value of the redeemable noncontrolling
interest are recorded through retained earnings. During the years ended December 31, 2021 and 2020, carrying
value adjustments were immaterial.
Business Combinations
The Company accounts for business combinations under the acquisition method of accounting. Accordingly,
at the date of each acquisition, the Company measures the fair value of all identifiable assets acquired (including
intangible assets), liabilities assumed and any remaining noncontrolling interests and allocates the amounts paid
to all items measured. The fair value of identifiable intangible assets acquired is based on valuations that use
information and assumptions determined by management and which consider management’s best estimates of
inputs and assumptions that a market participant would use.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting period.
Significant estimates and judgments made by management in preparing these financial statements include
revenue recognition, allowances for doubtful accounts, write-downs for excess and obsolete inventory, estimated
fair values used to record impairment charges related to intangible assets, goodwill, and other long-lived assets,
amortization periods, expected future cash flows used to evaluate the recoverability of long-lived assets and to
record intangible assets in business combinations, stock-based compensation expense, warranty allowances,
restructuring and other related charges, contingent liabilities and the recoverability of the Company’s net
deferred tax assets.
Changes in estimates are recorded in the period in which they become known. The Company bases its
estimates on historical experience and various other assumptions that it believes to be reasonable under the
circumstances. Actual results may differ from management’s estimates if these results differ from historical
experience or other assumptions prove not to be substantially accurate, even if such assumptions were reasonable
when made.
68
Subsequent Events Considerations
The Company considers events or transactions that occur after the balance sheet date but prior to the
issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that
require additional disclosure. Subsequent events have been evaluated as required. The Company has evaluated all
subsequent events and determined that, other than as reported herein, there are no material recognized or
unrecognized subsequent events.
Cash and Cash Equivalents
Cash and cash equivalents primarily include cash on hand, money market funds and time deposits with
original maturities of three months or less at the date of acquisition. Time deposits represent amounts on deposit
in banks and temporarily invested in instruments with maturities of three months or less at the time of purchase.
Certain of these investments represent deposits which are not insured by the Federal Deposit Insurance
Corporation or any other government agency. Cash equivalents are carried at cost, which approximates fair
value.
Short-term Investments
Short-term investments represent time and call deposits maturing within twelve months and with original
maturities of greater than three months at the date of acquisition. Short-term investments are classified as
available-for-sale and are reported at fair value. There were no unrealized gains (losses) recorded as of
December 31, 2021, 2020 and 2019, as cost approximates current fair value.
Restricted Cash
Restricted cash is included as a component of cash, cash equivalents, and restricted cash on the Company’s
consolidated statement of cash flows. The Company has certain subsidiaries that are required by local laws and
regulations 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.
Accounts Receivable, net
Accounts receivable have been reduced by an allowance for doubtful accounts. The allowance for doubtful
accounts represents the Company’s best estimate of the amount of probable credit losses in our accounts
receivable. The Company’s allowance is based on a number of factors, including an evaluation of customer credit
worthiness, the age of the outstanding receivable, economic trends and historical experience. Provisions for
doubtful accounts are recorded in selling, general and administrative expenses in the accompanying consolidated
statements of income and comprehensive income.
Derivative Financial Instruments and Hedging Activities
All derivatives, whether designated in a hedging relationship or not, are recorded on the consolidated
balance sheets at fair value. The accounting for changes in fair value of a derivative instrument depends on
whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging
relationship. For those derivative instruments that are designated and qualify as hedging instruments, the
Company must designate the hedging instrument, based on the exposure being hedged, as a fair value hedge,
cash flow hedge, foreign currency hedge or a hedge of a net investment in a foreign operation. If a derivative is
designated as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either
69
offset against the change in fair value of the hedged item through earnings or recognized in other comprehensive
income until the hedged item is recognized in earnings. Derivatives that are not designated as hedges are
recorded at fair value through earnings. The Company presents the cross-currency swap periodic settlements in
investing activities and the interest rate swap periodic settlements in operating activities in the consolidated
statements of cash flows. The Company records derivative assets and liabilities on a gross basis in the
consolidated balance sheets.
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 Company’s financial instruments consist primarily of cash equivalents, short-term investments,
restricted cash, derivative instruments consisting of forward foreign exchange contracts, cross-currency interest
rate swap agreements, commodity contracts, derivatives embedded in certain purchase and sale contracts,
derivatives embedded within noncontrolling interests, accounts receivable, 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 has evaluated the estimated fair value of financial instruments using available market
information and management’s estimates. The use of different market assumptions and/or estimation
methodologies could have a significant effect on the estimated fair value amounts.
Concentration of Credit Risk
Financial instruments that subject the Company to credit risk consist of cash, cash equivalents, short-term
investments, derivative instruments, accounts receivables and restricted cash. The risk with respect to cash, cash
equivalents and short-term investments is minimized by the Company’s policy of investing in short-term
financial instruments issued by highly rated financial institutions. The risk with respect to derivative instruments
is minimized by the Company’s policy of entering into arrangements with highly rated financial institutions. The
risk with respect to accounts receivables is minimized by the creditworthiness and diversity of the Company’s
customers. The Company performs periodic credit evaluations of its customers’ financial condition and generally
70
requires an advanced deposit for a portion of the purchase price. Credit losses have been within management’s
expectations and the allowance for doubtful accounts totaled $4.2 million and $3.0 million at December 31, 2021
and 2020, respectively. At December 31, 2021 and 2020, no single customer represented 10% or more of the
Company’s accounts receivable. For the years ended December 31, 2021, 2020 and 2019, no single customer
represented 10% or more of the Company’s total revenue.
Inventories
Components of inventory include raw materials, work-in-process, demonstration units and finished goods.
Demonstration units include systems which are located in the Company’s demonstration laboratories or installed
at the sites of potential customers and are considered available for sale. Finished goods include in-transit systems
that have been shipped to the Company’s customers, but not yet installed and accepted by the customer. All
inventories are stated at the lower of cost and net realizable value. Cost is determined principally by the first-in,
first-out method for a majority of subsidiaries and by average-cost for certain other subsidiaries. The Company
reduces the carrying value of its inventories for differences between cost and estimated net realizable value,
taking into consideration usage in the preceding twelve months, expected demand, technological obsolescence
and other information including the physical condition of demonstration inventories. The Company records a
charge to cost of product revenue for the amount required to reduce the carrying value of inventory to net
realizable value. Costs associated with the procurement of inventories, such as inbound freight charges and
purchasing and receiving costs, are capitalized as part of inventory and are also included in the cost of product
revenue line item within the consolidated statements of income and comprehensive income.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Major
improvements that extend the useful lives are capitalized while expenditures for maintenance, repairs and minor
improvements are charged to expense as incurred. When assets are retired or otherwise disposed of, the assets
and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or
loss is reflected in the consolidated statements of income and comprehensive income. Depreciation and
amortization are calculated on a straight-line basis over the estimated useful lives of the assets as follows:
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . .
Computer equipment and software . . . . . . . .
Furniture and fixtures . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . .
Estimated Useful Life
25 to 40 years
3 to 10 years
3 to 5 years
3 to 10 years
Lesser of 15 years or the
remaining lease term
Goodwill and Intangible Assets
Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment on an
annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may
not be recoverable. In assessing the recoverability of goodwill and indefinite-lived intangible assets, the
Company must make assumptions regarding the estimated future cash flows, including forecasted revenue
growth, to determine the fair value of these assets. If these estimates or their related assumptions change in the
future, the Company may be required to record impairment charges against these assets in the reporting period in
which the impairment is determined.
In January 2017, the Financial Accounting Standards Board (“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
71
test. The adoption of this ASU on January 1, 2020 did not have a material impact on the Company’s consolidated
financial statements.
The Company tests goodwill for impairment at the reporting unit level, which is the operating segment or
one level below an operating segment. The Company has the option of performing a qualitative assessment to
determine whether further impairment testing is necessary before performing the quantitative assessment. If as a
result of the qualitative assessment, it is more-likely-than-not that the fair value of a reporting unit is less than its
carrying amount, a quantitative impairment test will be required. Otherwise, no further testing will be required. If
a quantitative impairment test is performed, the Company compares the fair values of the applicable reporting
units with their aggregate carrying values, including goodwill. The Company determines the fair value of
reporting units using a weighting of both the market and the income methodologies. Estimating the fair value of
the reporting units requires significant judgment by management. If the carrying amount of a reporting unit
exceeds the fair value of the reporting unit, an impairment charge is recognized for the amount by which the
carrying value amount exceeds the reporting unit’s fair value up to the total amount of goodwill allocated to the
reporting unit.
In process research and development, or IPR&D, acquired as part of business combinations under the
acquisition method represents ongoing development work associated with enhancements to existing products, as
well as the development of next generation products. IPR&D is initially capitalized at fair value as an intangible
asset with an indefinite life and assessed for impairment on an annual basis, or when indicators of impairment are
identified. When the IPR&D project is complete, it is reclassified as a finite-lived intangible asset and is
amortized over its estimated useful life. If an IPR&D project is abandoned before completion or is otherwise
determined to be impaired, the value of the asset or the amount of the impairment is charged to the consolidated
statements of income and comprehensive income in the period the project is abandoned or impaired. At
December 31, 2021 and 2020, the Company did not have any IPR&D.
Intangible assets with a finite useful life are amortized on a straight-line basis over their estimated useful
lives as follows:
Existing technology and related patents . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . .
Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 to 15 years
5 to 15 years
5 to 15 years
Estimated Useful Life
Impairment of Long-Lived Assets
Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are
present and the quoted market price, if available or the estimated fair value of those assets are less than the
assets’ carrying value and are not recoverable. Determination of recoverability is based on an estimate of
undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that
such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are
written down to their fair values. Impairment losses are charged to the consolidated statements of income and
comprehensive income for the difference between the fair value and carrying value of the asset.
Warranty Costs and Deferred Revenue
The Company typically provides a one-year parts and labor warranty with the purchase of equipment. The
anticipated cost for this warranty is accrued upon recognition of the sale and is included as a current liability on
the accompanying consolidated balance sheets. The Company’s warranty reserve reflects estimated material and
labor costs for potential product issues for which the Company expects to incur an obligation. The Company’s
estimates of anticipated rates of warranty claims and costs are primarily based on historical information. The
Company assesses the adequacy of the warranty reserve on a quarterly basis and adjusts the amount as necessary.
72
If the historical data used to calculate the adequacy of the warranty reserve is not indicative of future
requirements, additional or reduced warranty reserves may be required.
The Company also offers to its customers extended warranty and service agreements extending beyond the
initial warranty for a fee. These fees are recorded as deferred revenue and recognized ratably into income over
the life of the extended warranty contract or service agreement.
Income Taxes
Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A
valuation allowance is applied against any net deferred tax asset if, based on the available evidence, it is more
likely than not that some or all of the deferred tax assets will not be realized.
The Company records liabilities related to uncertain tax positions in accordance with the guidance that
clarifies the accounting for uncertainty in income taxes recognized in a Company’s financial statements. This
guidance prescribes a minimum recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company
includes accrued interest and penalties related to unrecognized tax benefits and income tax liabilities, when
applicable, in income tax provision.
Customer Advances
The Company typically requires an advance deposit under the terms and conditions of contracts with
customers. These deposits are recorded as a current or long-term liability until revenue is recognized on the
specific contract in accordance with the Company’s revenue recognition policy.
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“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. For performance obligations recognized over time, revenue is measured by progress toward
completion of the performance obligation that reflects the transfer of control. Typically, progress is measured
73
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 the Company estimates that contracts will
ultimately result in a loss. Changes in the estimates could affect the timing of revenue recognition.
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 recognizes revenue from systems sales upon transfer of control in an amount that reflects the
consideration it expects to receive. Transfer of control generally occurs upon shipment, or for certain systems,
based upon customer acceptance for a system once delivered and installed at a customer facility. For systems that
include customer-specific acceptance criteria, the Company is required to assess when it can demonstrate the
acceptance criteria has been met, which generally is upon successful factory acceptance testing or customer
acceptance and evidence of installation. For systems that require installation and where system revenue is
recognized upon shipment, the standalone selling price of installation is deferred until customer acceptance.
Revenue from accessories and parts is generally recognized based on shipment. Service revenue is recognized as
the services are performed or ratably over the contractual obligation and includes maintenance contracts,
extended warranties, training, application support and on-demand services.
When products are sold through an independent distributor or a strategic distribution partner, the Company
recognizes the system sale upon transfer of control which is typically on shipment. When the Company is
responsible for installation, the standalone selling price of installation is deferred until customer acceptance. The
Company’s distributors do not have price protection rights or rights of return; however, the Company’s products
are typically warranted to be free from defect for a period of one year.
The Company requires an advance deposit based on the terms and conditions of contracts with customers
for many of 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. There is minimal variable
consideration included in the transaction price of the Company’s contracts.
Other revenues are primarily comprised of development arrangements recognized on a cost-plus-fixed-fee
basis and licensing arrangements recognized either when the licenses are provided or ratably over the contract
term depending on the nature of the arrangement.
Contract Assets and Liabilities
Contract assets represent unbilled receivables when revenue recognized exceeds the amount billed to the
customer, and the right to payment is not just subject to the passage of time. Contract assets typically result from
system revenue recorded where a portion of the transaction price is not billable until a future event, such as
customer acceptance, or from contracts recognized on a cost-to-cost or cost-plus-fixed-fee basis as revenue
exceeds the amount billed to the customer. Amounts may not exceed their net realizable value. Contract assets
are generally classified as current.
Contract liabilities consist of customer advances, deferred revenue and billings in excess of revenue from
contracts recognized on a cost-to-cost or cost-plus-fixed-fee basis. Contract liabilities are classified as current or
74
long-term based on the timing of when the Company expects to recognize revenue. Contract assets and liabilities
are reported in a net position on a contract-by-contract basis at the end of each reporting period.
Leases
The Company accounts for leases in accordance with ASC 842, Leases. At the inception of an arrangement,
the Company determines whether the arrangement is or contains a lease based on the unique facts and
circumstances present. Leases with a term greater than 12 months are recognized on the balance sheet as
Right-of-use (“ROU”) assets with a corresponding lease liability. The Company has elected not to recognize on
the consolidated balance sheets leases with an initial term of 12 months or less. Leases with an initial term of 12
months or less are directly expensed as incurred. Leases are classified as either operating or finance depending on
the specific terms of the arrangement.
The Company’s leases mainly consist of facilities, office equipment, and vehicles. The majority of leases
are classified as operating. The remaining lease term ranges from 2022 to 2039, with some leases including an
option to extend the lease for varying periods of time or to terminate prior to the end of the lease term. Certain
lease agreements contain provisions for future rent increases. Lease payments included in the measurement of the
lease liability comprise fixed payments, future rent increases tied to an index or rate, and the exercise price of a
Company option to purchase the underlying asset if the Company is reasonably certain to exercise the option.
Future rent increases dependent on an index or rate are initially measured at the index or rate at the
commencement date. The Company’s leases typically do not contain residual value guarantees.
At the commencement date, operating and finance lease liabilities, and their corresponding ROU assets, are
recorded based on the present value of lease payments over the expected lease term. The lease term includes the
non-cancellable period of the lease, plus any additional periods covered by either a Company option to extend (or
not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to
terminate) the lease controlled by the lessor. The interest rate implicit in lease contracts is typically not readily
determinable, therefore an incremental borrowing rate is used to calculate the lease liability. The incremental
borrowing rate is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the
lease payments in a similar economic environment. Certain adjustments to the ROU asset may be required for
items such as prepayments, lease incentives received or initial direct costs paid.
Shipping and Handling Costs
The Company includes costs incurred in connection with shipping and handling of products within selling,
general and administrative expenses in the accompanying consolidated statements of income and comprehensive
income. Shipping and handling costs were $36.3 million, $28.3 million and $27.0 million in the years ended
December 31, 2021, 2020 and 2019, respectively. Amounts billed to customers in connection with these costs are
included in total revenues.
Research and Development
The Company commits substantial capital and resources to internal and collaborative research and
development projects in order to provide innovative products and solutions to its customers. The Company
conducts research primarily to enhance system performance and improve the reliability of existing products, and
to develop revolutionary new products and solutions. Research and development costs are expensed as incurred
and include salaries, wages and other personnel related costs, material costs and depreciation, consulting costs
and facility costs.
Capitalized Software
Purchased software is capitalized at cost and is amortized over the estimated useful life, which is generally
three years. Software developed for use in the Company’s products is expensed as incurred to research and
75
development expense until technological feasibility is achieved. Subsequent to the achievement of technological
feasibility, amounts are capitalizable; however, to date such amounts have not been material.
Advertising
The Company expenses advertising costs as incurred. Advertising expenses were $13.8 million, $9.7 million
and $15.4 million during the years ended December 31, 2021, 2020 and 2019, respectively.
Stock-Based Compensation
The Company recognizes stock-based compensation expense in the consolidated statements of income and
comprehensive income based on the fair value of the share-based award at the grant date. The Company’s
primary types of share-based compensation are stock options, restricted stock awards and restricted stock units.
Compensation expense is amortized on a straight-line basis over the underlying vesting terms of the share-
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.
The determination of the fair value of stock-based payment awards using the Black-Scholes model is
affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free
interest rates and expected dividends. Risk-free interest rates are based on the yield on zero-coupon U.S.
Treasury securities for a period that is commensurate with the expected life assumption. Expected life is
determined through a calculation based on historical experience. Expected volatility is based the Company’s
historical volatility results. Expected dividend yield is based on the estimated annualized dividend yield on our
stock based on our history of paying dividends. The Company utilizes an estimated forfeiture rate derived from
an analysis of historical data.
Assumptions regarding volatility, expected term, dividend yield and risk-free interest rates are required for
the Black-Scholes model and are presented in the table below:
2021
2020
2019
Risk-free interest rates . . . . . . . . . . . . . . . . . . . . . . .
Expected life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . .
Weighted-average fair value per share . . . . . . . . . .
0.62%
0.23%
1.55%
4.4 years
5.1 years
5.3 years
34.0%
0.20%
34.1%
0.37%
29.6%
0.38%
$
21.69
$
12.08
$
11.16
Stock-based compensation for restricted stock awards and restricted stock units is expensed ratably over the
vesting period based on the grant date fair value.
Earnings Per Share
Net income per common share attributable to Bruker Corporation shareholders is calculated by dividing net
income attributable to Bruker Corporation, adjusted to reflect changes in the redemption value of the redeemable
noncontrolling interest, 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. There was no redemption value adjustment of the redeemable
noncontrolling interest for the years ended December 31, 2021 and 2020.
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Post Retirement Benefit Plans
The Company recognizes the over-funded or under-funded status of defined benefit pension and other
postretirement defined benefit plans as an asset or liability, respectively, in its consolidated balance sheets and
recognizes changes in the funded status in the year in which the changes occur through other comprehensive
income.
Other Comprehensive Income (Loss)
Other comprehensive income (loss) refers to revenues, expenses, gains and losses that are excluded from net
income as these amounts are recorded directly as an adjustment to shareholders’ equity, net of tax. The
Company’s other comprehensive income (loss) was composed of foreign currency translation adjustments,
derivatives designated as hedging instruments and pension liability adjustments.
Foreign Currency Translation
Assets and liabilities of the Company’s foreign subsidiaries, where the functional currency is the local
currency, are translated into U.S. dollars using the current exchange rate as of the consolidated balance sheet date
and shareholders’ equity is translated using historical rates. Revenues and expenses of foreign subsidiaries are
translated at the average exchange rates in effect during the year. Adjustments resulting from financial statement
translations are included as a separate component of shareholders’ equity. Gains and losses resulting from
translation of foreign currency monetary transactions are reported in interest and other income (expense), net in
the consolidated statements of income and comprehensive income for all periods presented. The Company has
certain intercompany foreign currency transactions that are deemed to be of a long-term investment nature.
Exchange adjustments related to those transactions are made directly to a separate component of shareholders’
equity.
Risks and Uncertainties
The Company is subject to risks common to its industry including, but not limited to, global economic
conditions, rapid technological change, government and academic funding levels, the impact of the COVID-19
coronavirus, changes in commodity prices, spending patterns of its customers, protection of its intellectual
property, availability of key raw materials and components, compliance with existing and future regulation by
government agencies and fluctuations in foreign currency exchange rates and interest rates.
The impact of the COVID-19 worldwide pandemic has been and will likely continue to be extensive in
certain geographies and aspects of society. The pandemic has resulted in and will likely continue to result in
significant disruptions to the global economy, global supply chains, as well as businesses and capital markets
around the world.
Impacts to the Company’s business included temporary closures in 2020 of many of the Company’s
government and university customers and suppliers, disruptions or restrictions on employees’ and customers’
ability to travel, and delays in product installations or shipments to and from affected countries. In an effort to
halt the outbreak of COVID-19, a number of countries, including the United States, implemented and some
continue to implement significant restrictions on travel, shelter in place or stay at home orders, and business
closures. While some of these restrictions are loosening in certain jurisdictions, some markets have returned to
restrictions in the face of increases in new COVID-19 cases, particularly as more contagious strains of the virus
emerge. Many of the Company’s employees in jurisdictions in which it has significant operations continue to
work remotely. In addition, certain Asia Pacific geographies where the Company operates are continuing to
experience significant COVID-19 disruptions. Much of the commercial activity in sales and marketing, and
customer demonstrations and applications training, is still either being conducted remotely or postponed. Even
where customers have re-opened their sites, some still operate at productivity levels that are below pre-pandemic
77
levels in an effort to accommodate safety protocols and as a result of pandemic-related supply chain disruptions.
Any resurgence of the virus or the emergence of new strains of the virus, particularly any new strains which are
more easily transmitted or which are resistant to existing vaccines, may require the Company or its customers to
close or partially close operations once again. These travel restrictions, business closures and operating
reductions at Bruker, customers, distributors, and/or suppliers have in the past adversely impacted and may
continue to adversely impact the Company’s operations worldwide, including the ability to manufacture, sell or
distribute products, as well as cause temporary closures of foreign distributors, or the facilities of suppliers or
customers. Global supply chains, including for semiconductor chips, components and raw materials such as
copper, have been disrupted, causing shortages, which has impacted the Company’s ability to manufacture or
supply its products. The Company could also experience increased compensation expenses associated with
employee recruiting and employee retention to the extent employment opportunities continue to multiply post-
pandemic, causing the search for and retention of talent to become more competitive. This disruption of the
Company’s employees, distributors, suppliers and customers has historically impacted and may continue to
impact the Company’s global sales and operating results.
In September 2021, President Biden issued an Executive Order requiring certain COVID-19 precautions for
government contractors and their subcontractors, including mandatory employee vaccination (subject to medical
and religious exemptions). In November 2021, the Department of Labor’s Occupational Safety and Health
Administration, or OSHA, issued an Emergency Temporary Standard, or ETS, requiring that all employers with at
least 100 employees ensure that their employees are fully vaccinated for COVID-19 or obtain a negative COVID-19
test at least once a week. The Executive Order was preliminarily enjoined by several U.S. federal district courts, the
U.S. Supreme Court preliminarily stayed the OSHA ETS in January 2022, and OSHA subsequently withdrew the
ETS. While the Company is not currently subject to any vaccine mandate, any requirement to mandate COVID-19
vaccination of its workforce or require its unvaccinated employees to be tested weekly could result in employee
attrition and difficulty securing future labor needs and may have an adverse effect on future operations. In addition,
any requirement to impose such obligations on the Company’s suppliers who are deemed government contractors
and their subcontractors could impact the price and continuity of supply of raw materials and its results of
operations and financial condition could be adversely affected. It continues to be the Company’s policy to
encourage each of its employees to be fully vaccinated against COVID-19.
The Company has experienced supply chain interruptions as a result of the COVID-19 pandemic, general
global economic conditions, a tight labor market and other factors, including natural events and disasters.
Various factors, including increased demand for certain components and production delays, are contributing to
shortages of certain components used in the Company’s products and increased difficulties in its ability to obtain
a consistent supply of materials at stable pricing levels. Supply shortages and longer lead times for components
used in the Company’s products, including limited source components, can result in significant additional costs
and inefficiencies in manufacturing. A shortage of key components may cause a significant disruption to the
Company’s production activities, which could have a substantial adverse effect on the Company’s financial
condition or results of operations. If the Company is unsuccessful in resolving any such component shortages in a
timely manner, the Company could experience a significant adverse impact on the timing of its revenue, a
possible loss of revenue, or an increase in manufacturing costs, any of which could have a material adverse
impact on the Company’s operating results.
The Company is continuing to monitor and assess the effects of the COVID-19 pandemic on its commercial
operations in 2022. However, the Company cannot at this time accurately predict what effects these conditions
will ultimately have on future operations due to uncertainties relating to the severity of the disease, the duration
of the outbreak, including the impact of any resurgence of the virus or the continued emergence of new strains of
the virus, the effectiveness and availability of vaccines, (including to protect against any new strains of the virus),
the willingness of individuals to receive vaccines, and the length or severity of the travel restrictions, business
closures, and other safety and precautionary measures imposed by the governments of impacted countries. The
pandemic has also adversely affected the economies and financial markets of many countries, which has affected
and likely will continue to affect demand for the Company’s products and its operating results.
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The preparation of the 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 estimates on historical experience and on various other assumptions that they
believe 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 COVID-19
pandemic 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-related amounts, will depend on future developments that are highly uncertain, including as a result of
new information that may emerge concerning COVID-19, new strains of the virus, the effectiveness and
availability of COVID-19 vaccines or individuals’ willingness to receive vaccines, and the actions taken to
contain or treat the virus, as well as the economic impact on local, regional, national and international customers
and markets. The Company has made estimates of the impact of COVID-19 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.
Loss Contingencies
Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or
legal proceeding related to patents, products and other matters, 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 is provided when a loss is considered probable but the loss is not reasonably
estimable and when a material loss is reasonably possible but not probable.
3. Recent Accounting Pronouncements
In October 2021, the FASB issued Accounting Standards Update (“ASU”) No. 2021-08, Business
Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with
Customers to improve the accounting for acquired revenue contracts with customers in a business combination.
The amendments require an entity (acquirer) recognize and measure contract assets and contract liabilities
acquired in a business combination in accordance with ASC 606. Previous guidance required an entity to
recognize contract assets and contract liabilities at fair value as of the acquisition date. The amendments are
effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
Early adoption is permitted, including adoption in an interim period. The Company elected to early adopt ASU
No. 2021-08 in the fourth quarter of 2021, and in accordance with the early adoption requirements in an interim
period, has applied the provisions retrospectively to all acquisitions completed on or after January 1, 2021. The
adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the
Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides temporary optional
guidance to ease the potential burden in accounting for reference rate reform. The guidance provides optional
expedients and exceptions for applying generally accepted accounting principles to transactions affected by
reference rate reform if certain criteria are met. These transactions include: contract modifications, hedging
relationships, and sale or transfer of debt securities classified as held-to-maturity. In January 2021, the FASB
issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to clarify that certain optional expedients and
exceptions under the reference rate reform guidance for contract modifications and hedge accounting apply to
derivatives that are affected by the discounting transition. Specifically, certain provisions in the reference rate
reform guidance, if elected by an entity, apply to derivative instruments that use an interest rate for margining,
discounting, or contract price alignment that is modified as a result of reference rate reform. This temporary
guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company may elect
to apply this guidance for all contract modifications or eligible hedging relationships during that time period
79
subject to certain criteria. The Company is still evaluating the impact of reference rate reform and whether this
guidance will be adopted.
In January 2020, the FASB issued ASU 2020-01—Investments-Equity Securities (Topic 321), Investments-
Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the
Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force),
which clarifies the interaction of the accounting for certain equity securities, equity method investments, and
certain forward contracts and purchased options. The guidance clarifies that an entity should consider observable
transactions that require it to either apply or discontinue the equity method of accounting for the purposes of
applying measurement principles for certain equity securities immediately before applying or discontinuing the
equity method. The Company adopted this guidance using a prospective method. The adoption of this ASU in
2020 did not have a material impact on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12—Income Taxes (Topic 740): Simplifying the Accounting
for Income Taxes. The guidance simplifies the accounting for income taxes by removing certain exceptions
within the current guidance; including the approach for intra-period tax allocation, the methodology for
calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis
differences. The amendment also improves consistent application by clarifying and amending existing guidance
related to aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the
accounting for transactions that result in a step up in the tax basis of goodwill. This guidance is effective for
annual and interim periods beginning after December 15, 2020 and early adoption is permitted. The adoption of
this ASU in 2021 did not have a material impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure
Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the
disclosure requirements of fair value measurements, including the consideration of costs and benefits. This ASU
is effective for the Company in fiscal years beginning after December 15, 2019. The Company adopted this
guidance on January 1, 2020 and the adoption did not have a material impact on its consolidated financial
statements.
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 Company adopted this ASU on January 1, 2020 and the adoption did not have a material impact on its
consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13—Financial Instruments-Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments. The guidance modifies the recognition of credit losses
related to financial assets, such as debt securities, trade receivables, net investments in leases, off-balance sheet
credit exposures, and other financial assets that have the contractual right to receive cash. Current guidance
requires the recognition of a credit loss when it is considered probable that a loss event has occurred. The new
guidance requires the measurement of expected credit losses to be based upon relevant information, including
historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of
the asset. As such, expected credit losses may be recognized sooner under the new guidance due to the broader
range of information that will be required to determine credit loss estimates. The new guidance also amends the
current other-than-temporary impairment model used for debt securities classified as available-for-sale. When the
fair value of an available-for-sale debt security is below its amortized cost, the new guidance requires the total
unrealized loss to be bifurcated into its credit and non-credit components. Any expected credit losses or
subsequent recoveries will be recognized in earnings and any changes not considered credit related will continue
to be recognized within other comprehensive income (loss). This guidance is effective for annual and interim
periods beginning after December 15, 2019. The Company adopted this new standard on January 1, 2020 using a
80
modified retrospective method for all financial assets measured at amortized cost. The new standard impacts the
Company’s accounts receivables and off-balance sheet credit exposures. The new standard did not have an
impact on the Company’s results of operations and cash flows.
4. Revenue
The following table presents the Company’s revenues by Group for the years ended December 31:
(in millions)
2021
2020
2019
Revenue by Group:
Bruker BioSpin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bruker CALID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BSI Nano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 691.0
819.6
697.5
223.8
(14.0)
$ 600.0
653.9
556.1
189.5
(12.0)
$ 621.4
623.5
632.7
209.9
(14.9)
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,417.9
$1,987.5
$2,072.6
Revenue for the Company recognized at a point in time versus over time is as follows for the years ended
December 31:
(in millions)
2021
2020
2019
Revenue recognized at a point in time . . . . . . . . . . . . . .
Revenue recognized over time . . . . . . . . . . . . . . . . . . . .
$2,104.7
313.2
$1,726.7
260.8
$1,847.4
225.2
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,417.9
$1,987.5
$2,072.6
Remaining Performance Obligations
Remaining performance obligations represent the aggregate transaction price allocated to a promise to
transfer a good or service that is fully or partially unsatisfied at the end of the period. As of December 31, 2021,
remaining performance obligations were approximately $2,077.2 million. The Company expects to recognize
revenue on approximately 70% 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 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 other current assets in the consolidated balance sheets. The balance of
contract assets as of December 31, 2021 and December 31, 2020 was $46.1 million and $41.8 million,
respectively.
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 consolidated balance sheet based on the timing of when revenue recognition is
expected. As of December 31, 2021 and December 31, 2020, the contract liabilities were $430.8 million and
$399.4 million, respectively. The increase in the contract liability balance during the year ended
81
December 31, 2021 is primarily a result of new performance obligations entered into during the period in
addition to delays in instrument installations due to customer facility closures or reduced operations as a
result of COVID-19. Approximately $270.0 million of the contract liability balance on December 31, 2020
was recognized as revenue during the year ended December 31, 2021.
5. Acquisitions
Pro forma financial information reflecting all acquisitions has not been presented because the impact,
individually and collectively, on revenues and net income is not material. Amounts allocated to goodwill that are
attributable to expected synergies are not expected to be deductible for tax purposes.
2021
In the year ended December 31, 2021, the Company completed various acquisitions that collectively
complemented its existing product offerings of to the Company’s existing businesses. The following table
reflects the consideration transferred and the respective reportable segment for each of the 2021 acquisitions (in
millions):
Segment
Consideration Transferred:
Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of contingent consideration . . . . . . . . .
Working capital adjustment . . . . . . . . . . . . . . . . .
Total consideration transferred . . . . . . . . . . .
Allocation of Consideration Transferred:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . .
Intangible assets:
Technology . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . .
Trade name . . . . . . . . . . . . . . . . . . . . . . . . . .
Backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . .
SCI Instruments Molecubes NV
BSI Nano
BSI Life
Science
$28.0
1.0
(0.6)
$28.4
$ —
—
1.0
—
—
7.1
6.4
0.4
1.2
12.6
—
(0.3)
$21.1
0.4
—
$21.5
$ 1.1
1.2
1.5
0.3
0.1
3.4
2.4
0.5
0.1
14.1
(1.6)
(1.6)
Total consideration allocated . . . . . . . . . . . .
$28.4
$21.5
SCI Instruments
On August 24, 2021, the Company acquired SCI Instruments (“SCI”), a privately held company, for a
purchase price of $28.0 million with the potential for additional consideration of up to $4.0 million based on
revenue and gross margin achievements in the calendar years 2022 and 2023. SCI is a manufacturer of advanced
metrology systems and analysis software and serves major companies in the semiconductor, optoelectronics, data
storage, display, MEMS, and optical coating industries. SCI will be integrated into the BSI Nano Segment. The
acquisition is being accounted for under the acquisition method.
82
The preliminary fair value allocation included contingent consideration in the amount of $1.0 million, which
represented the estimated fair value of future payments to the former shareholders of SCI based on achieving
revenue and gross margin targets for the calendar years 2022 and 2023. The Company expects to complete the
fair value allocation during the measurement period. The amortization period for the intangible assets acquired is
ten years for the trade name and technology, and nine years for the customer relationships. The backlog
intangible asset will be amortized through March 31, 2022.
Molecubes NV
On November 17, 2021, the Company acquired Molecubes NV (“Molecubes”), a privately held company,
for a purchase price of EUR 18.7 million (approximately $21.1 million) with the potential for additional
consideration of up to EUR 3.0 million (approximately $3.4 million) based on revenue and gross margin
achievements. Molecubes manufactures and sells preclinical imaging CUBES that enable researchers to perform
high-performance SPECT/CT and PET/CT studies without the need for complex system handling. The
acquisition is being accounted for under the acquisition method.
The preliminary fair value allocation included contingent consideration in the amount of EUR 0.4 million
(approximately $0.4 million), which represented the estimated fair value of future payments to the former
shareholders of Molecubes based on achieving revenue and gross margin targets in 2021 and 2022. The
Company expects to complete the fair value allocation during the measurement period. The amortization period
for the intangible assets acquired is ten years for the trade name, technology, and customer relationships. The
backlog intangible asset was fully amortized as of December 31, 2021.
In addition to the SCI and Molecubes acquisitions, in 2021 the Company completed various other
acquisitions accounted for under the acquisition method that complemented the Company’s existing product
offerings. The following table reflects the consideration transferred and the respective reportable segment for
these acquisitions (in millions):
Name of Acquisition
Date Acquired
Segment
Creative Instruments . . . . .
SVXR, Inc . . . . . . . . . . . . .
July 1, 2021
September 9, 2021
BSI Life Science
BSI Nano
Total
Consideration
Cash
Consideration
$ 1.0
13.4
$14.4
$ 1.0
11.9
$12.9
In addition to the acquisitions noted above, in 2021 the Company completed minority investments that
complemented the Company’s existing product offerings. The following table reflects the consideration
transferred and the respective reportable segment for the acquisitions (in millions):
Name
Acquisition /
Investment
Financial
Statement
Classification
Date Acquired
Segment
Total
Consideration
Cash
Consideration
Glycopath Inc.
IonPath Inc.
Olaris, Inc.
. . . . Investment Other long-term assets February 18, 2021 BSI Life Science
. . . . . . Investment Other long-term assets March 18, 2021
BSI Life Science
. . . . . . . Investment Other long-term assets September 23, 2021 BSI Life Science
$2.0
2.0
0.5
$4.5
$2.0
2.0
0.5
$4.5
2022—Subsequent Event Acquisitions
On January 17, 2022, the Company completed a share purchase agreement to acquire 100% of the
outstanding stock of Prolab Instruments GmbH (“Prolab”) for a purchase price of CHF 5.0 million
(approximately $5.5 million) with the potential for additional consideration of up to CHF 3.0 million
(approximately $3.3 million). Prolab is located in Basel, Switzerland and will be integrated into the Bruker
CALID Group.
83
On January 18, 2022, the Company completed a share purchase agreement to acquire 74.15% of the
outstanding stock of PreOmics GmbH (“PreOmics”) for EUR 44.7 million (approximately $50.6 million).
PreOmics is located in Munich, Germany and will be integrated into the Bruker CALID Group.
On February 1, 2022, the Company completed a share purchase agreement to acquire 100% of the
outstanding stock of PepSep Holding ApS (“PepSep”) for EUR 2.5M (approximately $2.8 million) with the
potential for additional consideration of up to EUR $1.5 million (approximately $1.7 million). PepSep is located
in Odense, Denmark and will be integrated into the Bruker CALID Group.
On February 15, 2022, the Company completed an additional $12.0 million minority interest investment in
PrognomIQ, Inc. (“PrognomIQ”). PrognomIQ is located in Redwood City, California and is reported within the
Bruker CALID Group.
2020
Canopy Biosciences
On September 10, 2020, Bruker acquired Canopy Biosciences, LLC (“Canopy”) for a purchase price of
$24.2 million with the potential for additional consideration of up to $5.0 million based on achieving revenue
targets in calendar years 2021 and 2022. Canopy is a leader in high multiplex biomarker imaging for
immunology, immune-oncology and cell therapy. Canopy was integrated into the BSI Nano Segment. The
acquisition was accounted for under the acquisition method. The components and fair value allocation of the
consideration transferred in connection with the acquisition are as follows (in millions):
Consideration Transferred:
Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Working capital adjustment . . . . . . . . . . . . . . . . . . . . . . . . .
$24.4
0.5
(0.5)
0.3
Total consideration transferred . . . . . . . . . . . . . . . . . .
$24.7
Allocation of Consideration Transferred:
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current and non-current assets . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . .
Operating lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets:
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1.1
1.2
1.0
0.9
0.3
5.7
6.1
0.7
0.3
12.0
(2.0)
(2.6)
Total consideration allocated . . . . . . . . . . . . . . . . . . . .
$24.7
The fair value allocation included contingent consideration in the amount of $0.5 million, which represented
the estimated fair value of future payments to the former shareholders of Canopy based on achieving revenue
targets for calendar years 2021 and 2022. The Company completed the fair value allocation during 2021. The
amortization period for the intangible assets acquired is ten years for the customer relationships and technology,
eight years for the trade name and one year for the backlog intangible asset. During the year ended December 31,
84
2021, the revenue targets were not achieved and the $0.5 million contingent consideration liability was reduced
to zero resulting in a reduction to selling, general and administrative expenses.
Hain
On October 15, 2018, Bruker acquired an 80% interest in Hain LifeScience GmbH (“Hain”) for a purchase
price of Euro 66 million (approximately $76.4 million) with options to acquire the remaining 20%. Hain is an
infectious disease specialist with a broad range of molecular diagnostics solutions for the detection of microbial
and viral pathogens, as well as for molecular antibiotic resistance testing. Hain is located in Nehren, Germany
and was integrated into the BSI Life Science Segment. On January 31, 2020, the Company acquired the
remaining 20% interest in Hain for a purchase price of EUR 20 million (approximately $22.2 million). The
carrying value of the noncontrolling interest was accreted to the redemption value of EUR 20 million through
retained earnings and then reclassified to additional paid in capital.
In addition to the acquisitions noted above, in 2020 the Company completed various other acquisitions that
complemented the Company’s existing product offerings. The following table reflects the consideration
transferred and the respective reportable segment for these acquisitions (in millions):
Name of Acquisition
Date Acquired
Segment
SmartTip B.V. . . . . . . . . . . . . .
Integrated Proteomics
Applications, Inc.
. . . . . . . .
April 1, 2020
BSI Nano
August 7, 2020
BSI Life Science
Total
Consideration
Cash
Consideration
$3.1
3.0
$6.1
$2.4
3.0
$5.4
6. Allowance for Doubtful Accounts
The following is a summary of the components for allowance for doubtful accounts (in millions):
Balance at December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3.8
1.5
(1.9)
Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4
0.9
(1.3)
3.0
2.2
(1.0)
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 4.2
7. Inventories
Inventories consisted of the following (in millions):
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work-in-process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Demonstration units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$218.7
254.9
144.9
91.6
$198.8
245.7
152.1
95.7
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$710.1
$692.3
2021
2020
85
Finished goods include in-transit systems that have been shipped to the Company’s customers but not yet
installed and accepted by the customer. At December 31, 2021 and 2020, inventory-in-transit was $49.5 million
and $67.8 million, respectively.
8.
Property, Plant and Equipment, Net
The following is a summary of property, plant and equipment, net by major asset class (in millions):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building and leasehold improvements . . . . . . . . . . . . . . . . . .
Machinery, equipment, software and furniture and
2021
2020
$ 34.1
371.5
$ 36.5
374.7
fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
435.6
416.8
Less accumulated depreciation and amortization . . . . . . . . . .
841.2
(435.1)
828.0
(432.5)
Property, plant and equipment, net . . . . . . . . . . . . . . . . .
$ 406.1
$ 395.5
Depreciation expense, which includes the amortization of leasehold improvements, for the years ended
December 31, 2021, 2020 and 2019 was $51.8 million, $44.7 million and $37.3 million, respectively.
9. Goodwill and Intangible Assets
Goodwill
The following table sets forth the changes in the carrying amount of goodwill by segment (in millions):
Balance at December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . .
Current period additions/adjustments . . . . . . . . . . . . . . .
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . .
Current period additions/adjustments . . . . . . . . . . . . . . .
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . .
Current period additions/adjustments . . . . . . . . . . . . . . .
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . .
BSI Life
Science
$ 72.0
13.1
(0.9)
84.2
—
7.9
92.1
13.4
(5.2)
BSI Nano
BEST
Total
$203.7
$—
0.3
6.3
(1.5) —
$275.7
19.7
(2.4)
208.5
13.7
5.8
0.3
—
—
0.3
228.0
16.6
—
(5.7) —
293.0
13.7
13.7
320.4
30.0
(10.9)
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . .
$100.3
$238.9
$ 0.3
$339.5
The Company performed its annual impairment evaluation using both a quantitative and qualitative
approach at December 31, 2021, 2020 and 2019, and concluded it was more likely than not that goodwill has not
been impaired. Based on the most recent quantitative analysis the fair values of each of the Company’s reporting
units was greater than their carrying amounts and, therefore, no impairment was required.
As a result of the impact of the COVID-19 pandemic, the Company performed an interim impairment
assessment of the goodwill balance as of March 31, 2020 using a combination of both quantitative and qualitative
approaches. Based on this interim assessment, the Company concluded the fair values of each of the reporting
units were significantly greater than their carrying amounts, and therefore, no impairment is required. The
goodwill assessment was based on management’s estimates and assumptions, certain of which are dependent on
external factors. No further triggering events were identified subsequent to March 31, 2020.
86
The Company has recorded $3.1 million of accumulated impairment losses of goodwill as of December 31,
2021.
Intangible Assets
The following is a summary of intangible assets (in millions):
2021
2020
Gross
Net
Gross
Net
Carrying Accumulated Carrying Carrying Accumulated Carrying
Amount
Amount
Amortization
Amortization
Amount
Amount
Existing technology and related patents . . . .
Customer relationships . . . . . . . . . . . . . . . . .
Trade names . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$310.4
156.1
15.5
1.8
$(206.8)
(58.2)
(5.8)
(1.2)
$103.6
97.9
9.7
0.6
$309.8
148.3
15.2
0.3
$(194.6)
(45.4)
(4.4)
(0.1)
$115.2
102.9
10.8
0.2
Intangible assets . . . . . . . . . . . . . . . . . .
$483.8
$(272.0)
$211.8
$473.6
$(244.5)
$229.1
For the years ended December 31, 2021, 2020 and 2019, the Company recorded amortization expense of
approximately $37.4 million, $35.8 million and $38.3 million, respectively, in the consolidated statements of
income and comprehensive income.
The estimated future amortization expense related to amortizable intangible assets is as follows (in
millions):
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 32.8
29.7
27.5
26.6
28.4
66.8
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$211.8
10. Other Current Liabilities
The following is a summary of other current liabilities (in millions):
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal and professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
2020
$138.4
132.0
23.8
5.2
75.1
15.4
6.4
17.9
12.8
54.2
$118.0
110.6
20.3
2.7
98.0
18.5
8.0
21.3
14.3
54.2
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
$481.2
$465.9
87
The following table sets forth the changes in accrued warranty (in millions):
Balance at December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . .
Accruals for warranties issued during the year . . . . . . . . . .
Settlements of warranty claims . . . . . . . . . . . . . . . . . . . . . .
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . .
Accruals for warranties issued during the year . . . . . . . . . .
Settlements of warranty claims . . . . . . . . . . . . . . . . . . . . . .
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . .
Accruals for warranties issued during the year . . . . . . . . . .
Settlements of warranty claims . . . . . . . . . . . . . . . . . . . . . .
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 19.7
24.5
(22.9)
(0.2)
21.1
19.2
(21.1)
1.1
20.3
23.4
(19.0)
(0.9)
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 23.8
11. Debt
The Company’s debt obligations consist of the following (in millions):
EUR notes (in dollars) under the 2021 Note Purchase Agreement . . . .
. . . .
CHF notes (in dollars) under the 2021 Note Purchase Agreement
. . . .
CHF notes (in dollars) under the 2019 Note Purchase Agreement
U.S. Dollar notes under the 2019 Term Loan . . . . . . . . . . . . . . . . . . . .
U.S. Dollar notes under the 2012 Note Purchase Agreement
. . . . . . . .
Unamortized debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total notes and loans outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt
2021
2020
$ 170.7
329.2
325.9
299.2
205.0
(2.0)
1.9
1,329.9
4.3
1,334.2
(112.4)
$ —
—
335.5
300.0
205.0
(2.4)
3.0
841.1
3.4
844.5
(2.2)
Total long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . .
$1,221.8
$842.3
2021 Note Purchase Agreement
On December 7, 2021, the Company entered into a note purchase agreement, referred to as the 2021 Note
Purchase Agreement, with a group of institutional accredited investors. Pursuant to the 2021 Note Purchase
Agreement, the Company issued and sold CHF 300 million aggregate principal amount of 0.88% series A senior
notes and EUR 150 million aggregate principal amount of 1.03% series B senior notes due December 8, 2031,
referred to as the 2021 Senior Notes. The obligations under the Note Purchase Agreement are unsecured and are
fully and unconditionally guaranteed by certain of the Company’s subsidiaries.
Interest on the 2021 Senior Notes is payable semi-annually on June 7 and December 7 of each year,
commencing June 7, 2022. The Company may prepay some or all of the 2021 Senior Notes at any time in an
amount not less than 10% of the aggregate principal amount of the 2021 Senior Notes then outstanding at a price
equal to the sum of (a) the principal amount to be prepaid, plus accrued and unpaid interest, (b) any applicable
“make-whole” amount, and (c) certain other fees and expenses. In the event of a change in control (as defined in
the 2021 Note Purchase Agreement) of the Company, the Company may be required to prepay the 2021 Senior
88
Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and certain other
fees and expenses.
The 2021 Note Purchase Agreement contains customary affirmative and negative covenants, including,
among others, restrictions on the Company’s ability to incur liens, transfer or sell equity or assets, engage in
certain mergers and consolidations, enter into transactions with affiliates, and engage or permit any subsidiary to
engage in certain lines of business. The 2021 Note Purchase Agreement also includes customary representations
and warranties and events of default.
Additionally, so long as any 2021 Senior Notes are outstanding, the Company may not permit (i) its
leverage ratio (as determined pursuant to the 2021 Note Purchase Agreement) as of the end of any fiscal quarter
to exceed 3.50 to 1.00 unless a material acquisition causes an adjusted leverage ratio to apply pursuant to the
2021 Note Purchase Agreement, (ii) its interest coverage ratio (as determined pursuant to the 2021 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 1.00, or (iii) priority Debt at any time to exceed 15% of consolidated total assets (as determined pursuant
to the 2021 Note Purchase Agreement).
2019 Transactions
On December 11, 2019, the Company entered into (1) a new revolving credit agreement to establish a new
revolving credit facility in the aggregate principal amount of $600 million; (2) a term loan agreement to establish
a new term loan facility in the aggregate principal amount of $300 million; and (3) a note purchase agreement to
issue and sell CHF 297 million aggregate principal amount of 1.01% senior notes due December 11, 2029.
The existing $105 million 4.31% Series 2012A Senior Notes, Tranche C, due January 18, 2022, and the
existing $100 million 4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024, which the Company
issued pursuant to a note purchase agreement dated January 18, 2012, remain in full force and effect.
Each of the revolving credit agreements, term loan agreement and note purchase agreements are described
below.
2019 Revolving Credit Agreement
On December 11, 2019, the Company entered into a new credit agreement, referred to as the 2019
Revolving Credit Agreement. The 2019 Revolving Credit Agreement provides for a five-year revolving credit
facility in the U.S. Dollar equivalent amount of $600 million, comprised of sub-facilities for revolving loans,
swing-line loans, letters of credit and foreign borrowings. The 2019 Revolving Credit Agreement also provides
for an uncommitted incremental facility whereby, under certain circumstances, the Company may, at its option,
increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed
$250 million. Loans under the 2019 Revolving Credit Agreement will be repayable in full at maturity and may
also be prepaid at the Company’s option in whole or in part without premium or penalty. Amounts borrowed
under the 2019 Revolving Credit Agreement may be repaid and reborrowed from time to time prior to the
maturity date. The obligations under the 2019 Revolving Credit Agreement are unsecured and are fully and
unconditionally guaranteed by the Company and certain of its subsidiaries.
Borrowings under the 2019 Revolving Credit Agreement bear interest at a rate equal to, at the Company’s
option, (a) the London Interbank Offered Rate (LIBOR) applicable to the relevant currency, plus a margin
ranging from 1.000% to 1.500%, based on the Company’s leverage ratio, or (b) the highest of (i) the federal
funds effective rate plus 1⁄ 2 of 1%, (ii) the prime rate announced by Bank of America, N.A., and (iii) LIBOR, as
adjusted, plus 1%, plus, in each case, a margin rate ranging from 0.100% to 0.500%, based on the Company’s
leverage ratio. The Company has also agreed to pay a quarterly facility fee based on the aggregate unused
amount available under the 2019 Revolving Credit Agreement ranging from 0.100% to 0.200%, based on the
Company’s leverage ratio.
89
The 2019 Revolving Credit Agreement includes affirmative, negative and financial covenants and events of
default customary for financings of this type. The negative covenants include, among others, restrictions on liens,
indebtedness of the Company and its subsidiaries, asset and equity sales, dividends, and transactions with
affiliates. The financial covenants include maximum leverage ratio and minimum interest coverage ratios of the
Company, specifically, the Company’s leverage ratio cannot exceed 3.5 and the interest coverage ratio cannot be
less than 2.5. The events of default include, among others, payment defaults, defaults in the performance of
affirmative and negative covenants, the inaccuracy of representations and warranties, bankruptcy and insolvency
related events, certain ERISA events, material judgments, and the occurrence of a change of control.
The following is a summary of the maximum commitments and the net amounts available to the Company
under the 2019 Revolving 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 (dollars in millions):
Weighted
Average
Interest Rate
Total Amount
Committed by
Lenders
Outstanding
Borrowings
Outstanding
Letters of
Credit
. . . . . . . . . . . . . . . . .
2019 Credit Agreement
Bank guarantees and working capital line . . .
1.3%
varies
Total revolving lines of credit . . . . . . . .
$600.0
116.2
$716.2
$—
—
$—
$
0.2
116.2
$116.4
Total
Committed
Amounts
Available
$599.8
—
$599.8
2019 Term Loan Agreement
On December 11, 2019, the Company, together with certain of its subsidiaries, as borrowers, entered into a
term loan agreement, referred to as Term Loan Agreement with a bank consortium. The Term Loan Agreement
provides for a $300 million seven-year term loan facility subject to terms and conditions substantially consistent
with those provisions contained in the 2019 Revolving Credit Agreement. Loans under the Term Loan
Agreement will be repayable in full at maturity, subject to scheduled amortization beginning in 2022, and may
also be prepaid at the Company’s option in whole or in part without premium or penalty. The obligations under
the Term Loan Agreement are unsecured and are fully and unconditionally guaranteed by certain of the
Company’s subsidiaries.
Amounts outstanding under the Term Loan Agreement bear interest at a rate equal to, at the Company’s
option, (a) the U.S. Dollar London Interbank Offered Rate (USD LIBOR), plus a margin ranging from 1.000% to
1.500%, based on the Company’s leverage ratio, or (b) the highest of (i) the federal funds effective rate plus 1⁄ 2
of 1%, (ii) the prime rate announced by Bank of America, N.A., and (iii) USD LIBOR, as adjusted, plus 1%, plus
a margin ranging from 0.100% to 0.500%, based on the Company’s leverage ratio.
The other terms of the Term Loan Agreement are substantially similar to the terms of the 2019 Revolving
Credit Agreement, including representations and warranties, affirmative, negative and financial covenants, and
events of default.
2019 Note Purchase Agreement
On December 11, 2019, the Company entered into a note purchase agreement, referred to as the 2019 Note
Purchase Agreement, with a group of institutional accredited investors. Pursuant to the 2019 Note Purchase
Agreement, the Company issued and sold CHF 297 million aggregate principal amount of 1.01% senior notes
due December 11, 2029, referred to as the 2019 Senior Notes. The obligations under the Note Purchase
Agreement are unsecured and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.
90
Interest on the 2019 Senior Notes is payable semi-annually on June 11 and December 11 of each year,
commencing June 11, 2020. The 2019 Senior Notes are unsecured obligations of the Company and are fully and
unconditionally guaranteed by certain of the Company’s subsidiaries. The Company may prepay some or all of
the 2019 Senior Notes at any time in an amount not less than 10% of the aggregate principal amount of the 2019
Senior Notes then outstanding at a price equal to the sum of (a) the principal amount to be prepaid, plus accrued
and unpaid interest, (b) any applicable “make-whole” amount, and (c) certain other fees and expenses. In the
event of a change in control (as defined in the 2019 Note Purchase Agreement) of the Company, the Company
may be required to prepay the 2019 Senior Notes at a price equal to 100% of the principal amount thereof, plus
accrued and unpaid interest and certain other fees and expenses.
The 2019 Note Purchase Agreement contains customary affirmative and negative covenants, including,
among others, restrictions on the Company’s ability to incur liens, transfer or sell equity or assets, engage in
certain mergers and consolidations, enter into transactions with affiliates, and engage or permit any subsidiary to
engage in certain lines of business. The 2019 Note Purchase Agreement also includes customary representations
and warranties and events of default.
Additionally, so long as any 2019 Senior Notes are outstanding, the Company may not permit (i) its
leverage ratio (as determined pursuant to the 2019 Note Purchase Agreement) as of the end of any fiscal quarter
to exceed 3.50 to 1.00 unless a material acquisition causes an adjusted leverage ratio to apply pursuant to the
2019 Note Purchase Agreement, (ii) its interest coverage ratio (as determined pursuant to the 2019 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 1.00, or (iii) priority Debt at any time to exceed 15% of consolidated total assets (as determined pursuant
to the 2019 Note Purchase Agreement).
2012 Note Purchase Agreement
In January 2012, the Company entered into a note purchase agreement, referred to as the 2012 Note
Purchase Agreement, with a group of accredited institutional investors. Pursuant to the 2012 Note Purchase
Agreement, the Company issued and sold $240.0 million of senior notes, referred to as the 2012 Senior Notes,
which consist of the following:
•
•
•
•
$20 million 3.16% Series 2012A Senior Notes, Tranche A, due January 18, 2017;
$15 million 3.74% Series 2012A Senior Notes, Tranche B, due January 18, 2019;
$105 million 4.31% Series 2012A Senior Notes, Tranche C, due January 18, 2022; and
$100 million 4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024.
Principal amounts of Tranches A, B and C together with any accrued interest theron were paid on their
respective due dates in accordance with the 2012 Note Purchase Agreement.
Under the terms of the 2012 Note Purchase Agreement, interest is payable semi-annually on January 18 and
July 18 of each year. The 2012 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 2012 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 2012 Senior Notes at any time in an amount not less than 10% of the original
aggregate principal amount of the 2012 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 2012 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.
91
The 2012 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 2012 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 2012 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 2012 Senior Notes will become due and payable immediately without further action or notice. In the
case of payment events of defaults, any holder of 2012 Senior Notes affected thereby may declare all 2012 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 2012 Senior Notes may declare all the 2012 Senior Notes to be due and payable immediately. Pursuant to
the 2012 Note Purchase Agreement, so long as any 2012 Senior Notes are outstanding, the Company will not
permit (i) its leverage ratio, as determined pursuant to the 2012 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 2012 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 2012 Note Purchase Agreement.
As of December 31, 2021, the Company was in compliance with the covenants of all debt agreements.
Annual maturities of notes and loans outstanding are as follows (in millions):
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter
$ 111.1
15.8
115.2
15.5
15.2
1,059.1
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,331.9
As of December 31, 2021, the Company has several cross-currency and interest rate swap agreements with a
notional value of $149.6 million of U.S. to Swiss Franc and a notional value of $354.7 million of U.S. to Euro to
hedge the variability in the movement of foreign currency exchange rates on portions of our Euro and Swiss
Franc denominated net asset investments. These agreements qualify for hedge accounting and accordingly the
change in fair value of the derivative is recorded in other comprehensive income as part of foreign currency
translation adjustments and remains in accumulated comprehensive income (loss) attributable to Bruker
Corporation in shareholders’ equity until the sale or substantial liquidation of the foreign operation. The
difference between the interest rate received and paid under the interest rate and cross-currency swap agreements
is recorded in interest and other income (expenses) in the consolidated statements of income and comprehensive
income. As a result of entering into these agreements, the Company has lowered net interest expense by
$5.5 million and $7.2 million during 2021 and 2020, respectively. The gains related to hedges of net asset
investments in international operations that were recorded within the cumulative translation adjustment section of
other comprehensive income were $36.4 million for the year ended December 31, 2021. The losses related to
hedges of net asset investments in international operations that were recorded within the cumulative translation
adjustment section of other comprehensive income were $47.1 million and $6.8 million for the years ended
December 31, 2020 and 2019, respectively.
Interest expense for the years ended December 31, 2021, 2020 and 2019 was $14.3 million, $14.4 million
and $16.0 million, respectively.
92
12. Fair Value of Financial Instruments
The Company measures the following financial assets and liabilities at fair value on a recurring basis. The
following tables set forth the Company’s financial instruments and presents them within the fair value hierarchy
using the lowest level of input that is significant to the fair value measurement (in millions):
December 31, 2021
Quoted Prices
in Active
Markets
Available
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Assets:
Time deposits and money market funds . . . . . . . . . . . . $ 367.7
100.0
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . .
6.4
Interest rate and cross currency swap agreements . . . . .
Forward currency contracts . . . . . . . . . . . . . . . . . . . . . .
0.7
Embedded derivatives in purchase and delivery
contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed price commodity contracts . . . . . . . . . . . . . . . . . .
Debt securities available for sale . . . . . . . . . . . . . . . . . .
0.2
0.4
1.2
$—
—
—
—
—
—
—
$ 367.7
100.0
6.4
0.7
0.2
0.4
—
$ —
—
—
—
—
—
1.2
Total assets recorded at fair value . . . . . . . . . . . . . $ 476.6
$—
$ 475.4
$ 1.2
Liabilities:
Contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . $
Hybrid instrument liability . . . . . . . . . . . . . . . . . . . . . . .
Forward currency contracts . . . . . . . . . . . . . . . . . . . . . .
Interest rate and cross currency swap agreements . . . . .
Long-term fixed interest rate debt . . . . . . . . . . . . . . . . .
6.6
15.6
0.3
23.9
1,043.3
Total liabilities recorded at fair value . . . . . . . . . . $1,089.7
$—
—
—
—
—
$—
$ —
—
0.3
23.9
1,043.3
$1,067.5
$ 6.6
15.6
—
—
—
$22.2
December 31, 2020
Quoted Prices
in Active
Markets
Available
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Assets:
Time deposits and money market funds . . . . . . . . . . . . . . $183.2
50.0
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.6
Interest rate and cross currency swap agreements . . . . . .
Foreign currency contracts . . . . . . . . . . . . . . . . . . . . . . . .
2.1
Embedded derivatives in purchase and delivery
contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed price commodity contracts . . . . . . . . . . . . . . . . . . .
Debt securities available for sale . . . . . . . . . . . . . . . . . . .
0.1
3.1
1.2
$—
—
—
—
—
—
—
$183.2
50.0
7.6
2.1
0.1
3.1
—
$ —
—
—
—
—
—
1.2
Total assets recorded at fair value . . . . . . . . . . . . . . . $247.3
$—
$246.1
$ 1.2
Liabilities:
Contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . $
Hybrid instrument liability . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate and cross currency swap agreements . . . . . .
Forward currency contracts . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
Long-term fixed interest rate debt
4.3
13.9
61.5
0.4
549.8
Total liabilities recorded at fair value . . . . . . . . . . . . $629.9
$—
—
—
—
—
$—
$ —
—
61.5
0.4
549.8
$611.7
$ 4.3
13.9
—
—
—
$18.2
93
Derivative financial instruments are classified within level 2 because there is not an active market for each
derivative contract. However, the inputs used to calculate the value of the instruments are obtained from active
markets.
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 year ended December 31, 2021 or 2020.
The fair value of the long-term fixed interest rate debt, which has been classified as Level 2, was based on
market and observable sources with similar maturity dates. The remaining long-term debt has variable interest
rates and the carrying value approximates fair value accordingly.
On a quarterly basis, the Company reviews its short-term investments to determine if there have been any
events that could create an impairment. None were noted for the years ended December 31, 2021, 2020 and 2019.
Debt securities consist of investments in redeemable preferred stock. Debt securities are classified as either
current or long-term investments based on their contractual maturities unless the Company intends to sell an
investment within the next twelve months, in which case it is classified as current on the consolidated balance
sheets. Debt securities are classified as available for sale and are carried at fair value.
Contingent consideration recorded within other liabilities represents the estimated fair value of future
payments to the former shareholders as part of certain acquisitions. These contingent consideration amounts are
primarily based on the applicable acquired company achieving annual revenue and gross margin targets in certain
years as specified in the relevant purchase and sale agreement. The Company initially values the contingent
consideration on acquisition date 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.
The following table sets forth the changes in contingent consideration liabilities (in millions):
Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current period additions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current period adjustments . . . . . . . . . . . . . . . . . . . . . . . . .
Current period settlements . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency effect
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current period additions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current period adjustments . . . . . . . . . . . . . . . . . . . . . . . . .
Current period settlements . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency effect
$15.8
1.2
(4.4)
(8.7)
0.4
4.3
2.6
0.2
(0.4)
(0.1)
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 6.6
As part of the Mestrelab acquisition, the Company entered into an agreement with the noncontrolling
interest holders that provides the Company with the right to purchase, and the noncontrolling interest holders
with the right to sell, the remaining 49% of Mestrelab for cash at a contractually defined redemption value. These
94
rights (an embedded derivative) are exercisable beginning in 2022 and can be accelerated, at a discounted
redemption value, upon certain events related to post combination services. As the option is tied to continued
employment, the Company classified the hybrid instrument (noncontrolling interest with an embedded
derivative) within short-term and long-term liabilities on the consolidated balance sheet. Subsequent to the
acquisition, the carrying value of the hybrid instrument is remeasured to fair value with changes recorded to
stock-based compensation expense in proportion to the requisite service period vested. The hybrid instrument is
classified as Level 3 in the fair value hierarchy.
The following table sets forth the changes in hybrid instrument liability (in millions):
Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current period additions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency effect
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current period additions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency effect
$10.6
2.6
0.7
13.9
2.7
(1.0)
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . .
$15.6
13. Derivative Instruments and Hedging Activities
Interest Rate Risk
The Company’s exposure to interest rate risk relates primarily to outstanding variable rate debt and adverse
movements in the related market rates. Typically, the most significant component of the Company’s interest rate
risk relates to amounts outstanding under the 2019 Credit Agreement and the 2019 Term Loan.
Commodity Price Risk Management
The Company has arrangements with certain customers under which it has a firm commitment to deliver
copper based superconductors at a fixed price. In order to minimize the volatility that fluctuations in the price of
copper have on the Company’s sales of these commodities, the Company enters into commodity hedge contracts.
As commodity contracts settle, gains (losses) as a result of changes in fair values are adjusted to the contracts
with the customers through revenues.
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, with some
agreements extending to longer periods. 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.
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 $8.5 million and $4.8 million
95
for the purchase of products at December 31, 2021 and 2020, respectively. The contracts, denominated in
currencies other than the functional currency of the transacting parties, amounted to $0.0 million and $7.5 million
for the delivery of products at December 31, 2021 and 2020, respectively. 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.
The Company had the following notional amounts outstanding under foreign exchange contracts, cross-
currency interest rate swap agreements and long-term debt designated as net investment hedges (in millions) and
the respective fair value of the instruments recorded in the consolidated balance sheets as follows (in millions):
Notional
(in USD)
December 31,
2021
Notional
(in USD)
December 31,
2020
Derivatives designated as hedging
instruments
Interest rate cross-currency swap agreements
Other current assets . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . .
$
6.4
(5.8)
(18.1)
$(17.5)
$ 505.0
$
7.6
(4.3)
(57.2)
$(53.9)
$ 504.3
Long-term debt
Long-term Debt . . . . . . . . . . . . . . . . . . . . .
825.8
(35.1)
335.5
(37.6)
Total derivatives designated as hedging
instruments . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,330.1
$ (52.6)
$ 840.5
$ (91.5)
Derivatives not designated as hedging
instruments
Forward currency contracts
Other current assets . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . .
Embedded derivatives in purchase and delivery
contracts
Other current assets . . . . . . . . . . . . . . . . . .
Fixed price commodity contracts
Other current assets . . . . . . . . . . . . . . . . . .
Total derivatives not designated as hedging
$ 157.7
23.0
$
0.7
(0.3)
$ 175.8
102.5
$
2.1
(0.4)
8.5
5.5
0.2
0.4
12.3
8.8
0.1
3.1
$
4.9
$ (86.6)
instruments . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 194.7
$
1.0
$ 299.4
Total derivatives . . . . . . . . . . . . . . . . . . . . . . .
$1,524.8
$ (51.6)
$1,139.9
96
The following is a summary of the gain (loss) included in the consolidated statements of income and
comprehensive income related to the derivative instruments described above (in millions):
Derivatives not designated as
hedging instruments
Forward currency contracts . . . .
Embedded derivatives in
purchase and delivery
contracts . . . . . . . . . . . . . . . . .
Derivatives designated as cash flow
hedging instruments
Financial Statement Classification
2021
2020
2019
Years Ended December 31,
Interest and other income
(expense), net
Interest and other income
(expense), net
$ (5.5)
$ 2.1
$ 3.0
0.1
(5.4)
0.5
2.6
—
3.0
Interest rate cross-currency swap
agreements . . . . . . . . . . . . . . .
Interest and other income
(expense), net
(4.7)
(3.0) —
Derivatives designated as net
investment hedging instruments
Interest rate cross-currency swap
agreements . . . . . . . . . . . . . . .
Interest and other income
(expense), net
Total . . . . . . . . . . . . . . . . . . . . . .
10.2
10.1
0.6
$ 0.1
$ 9.7
$ 3.6
Years Ended December 31,
Financial Statement Classification
2021
2020
2019
Derivatives designated as cash
flow hedging instruments
Interest rate cross-currency
swap agreements . . . . . . . . .
Derivatives designated as net
investment hedging instruments
Interest rate cross-currency
swap agreements . . . . . . . . .
Long-term debt . . . . . . . . . . . . .
Accumulated other
comprehensive income, net of
tax
Accumulated other
comprehensive income, net of
tax
Accumulated other
comprehensive income, net of
tax
Total . . . . . . . . . . . . . . . . . . . . .
14. Income Taxes
$15.0
$(20.4)
$ 2.0
25.6
(26.7)
(8.8)
10.8
36.4
(28.7)
(55.4)
(8.9)
(17.7)
$51.4
$(75.8)
$(15.7)
The domestic and foreign components of income before income taxes are as follows (in millions):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (15.4)
409.0
$ (31.1)
256.9
$
3.8
276.6
Total income before provision for income taxes . . . . . . . . .
$393.6
$225.8
$280.4
2021
2020
2019
97
The components of the income tax provision are as follows (in millions):
2021
2020
2019
Current income tax expense (benefit):
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
1.0
1.2
118.0
$ (0.5)
(0.5)
85.4
Total current income tax expense . . . . . . . . . . . . . . . . . . . .
120.2
84.4
$ 0.6
2.2
82.1
84.9
Deferred income tax expense (benefit):
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax benefit . . . . . . . . . . . . . . . . . . . .
(7.8)
(2.5)
3.1
(7.2)
(4.9)
(1.0)
(14.1)
(20.0)
(2.2)
0.3
(0.6)
(2.5)
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$113.0
$ 64.4
$82.4
The income tax provision differs from the tax provision computed at the U.S. federal statutory rate due to
the following significant components:
2021
2020
2019
Statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax rate differential
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. tax on foreign earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mandatory repatriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
2.6
Tax contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in tax rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.1)
Withholding taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Repatriation of foreign earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal benefits . . . . . . . . . . . . . . . . . . . . . .
Research and development credits . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance for unbenefited losses . . . . . . . . . . . .
21.0% 21.0% 21.0%
4.9
5.2
2.0
1.2
0.3
1.6
(0.7)
(2.5)
0.5
1.4
0.1
(0.1)
0.6
(0.6)
(1.2)
(0.7) —
1.0 —
5.9
0.7
1.4
(1.0)
(0.6)
1.4
0.3
(0.1)
0.3
0.7
(0.6)
(0.4)
(0.4)
(0.9)
1.2
0.2
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28.7% 28.5% 29.4%
98
The tax effect of temporary items that give rise to significant portions of the deferred tax assets and
liabilities are as follows (in millions):
Deferred tax assets:
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disallowed interest carryforward . . . . . . . . . . . . . . . . . . .
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . .
Foreign tax and other tax credit carryforwards . . . . . . . . .
Unrealized currency gain/loss . . . . . . . . . . . . . . . . . . . . . .
Hedge unrealized FX gain/loss . . . . . . . . . . . . . . . . . . . . .
Lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . .
Less valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign patent reserves . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued withholding tax . . . . . . . . . . . . . . . . . . . . . . . . . .
Right-of-use asset
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . .
2021
2020
$
0.3
28.8
—
9.3
23.5
21.4
6.8
12.5
14.1
2.4
$
4.7
32.3
13.9
5.0
31.1
16.4
9.6
—
15.2
—
119.1
(7.1)
112.0
128.2
(6.6)
121.6
—
3.6
6.1
4.4
32.6
0.5
6.7
14.0
0.2
68.1
2.7
10.8
10.4
2.4
40.2
2.8
6.7
14.9
2.2
93.1
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . .
$ 43.9
$ 28.5
The Company uses the liability method to account for income taxes. Under this method, deferred income taxes
are recognized for the future tax consequences of differences between the tax and financial accounting bases of
assets and liabilities at each reporting period. Deferred income taxes are based on enacted tax laws and statutory tax
rates applicable to the period in which these differences are expected to affect taxable income. A valuation
allowance is established when necessary to reduce deferred tax assets to the expected realizable amounts.
The Company can only recognize a deferred tax asset to the extent this it is “more likely than not” that these
assets will be realized. Judgments around realizability depend on the availability and weight of both positive and
negative evidence. Changes in the valuation allowance for deferred tax assets were as follows (in millions):
Balance at December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decreases recorded as a benefit to income tax provision . . .
$ 4.3
(0.1)
Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 4.2
Increases recorded as part of acquisition purchase
accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.4
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 6.6
Increases recorded as an expense to income tax
provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.5
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 7.1
99
As of December 31, 2021, the Company had approximately $89.4 million net operating loss carryforwards
available to reduce state taxable income that are expected to expire at various times beginning in 2022. The
Company also has approximately $86.1 million of German Trade Tax and Corporate Income Tax net operating
losses that are carried forward indefinitely. Additionally, the Company has $6.4 million of other foreign net
operating losses that are expected to expire at various times in the future. We had U.S. federal foreign tax credit
carried forwards in the amount of $6.3 million. We also had U.S. federal and state research and development tax
credit of $4.6 million and $7.8 million respectively. Utilization of these credits and state net operating losses may
be subject to annual limitations due to the ownership percentage change limitations provided by the Code
Section 382 and similar state provisions. In the event of a deemed change in control under Code Section 382, an
annual limitation on the utilization of net operating losses and credits may result in the expiration of all or a
portion of the net operating loss and credit carryforwards. Additionally, the Company has $40.2 million of gross
interest expense carryforward as provided by Code Section 163(j) that can be carried forward indefinitely.
At December 31, 2021 the Company recorded state income and foreign withholding taxes on the cash and
liquid assets portion of the unremitted earnings and profits (E&P) of foreign subsidiaries expected to be
repatriated from its foreign subsidiaries to the United States, except for amounts from certain subsidiaries, which
the Company has asserted to be indefinitely reinvested. Specifically, the Company asserts that a total of
$1.9 billion of unremitted foreign earnings is indefinitely reinvested. This figure is comprised of $1.4 billion in
unremitted earnings as well as $546 million of non-cash E&P in all jurisdictions not indefinitely reinvested. If
this E&P is ultimately distributed to the United States in the form of dividends the Company would likely be
subject to additional withholding tax. The Company estimates the amount of unrecognized deferred withholding
taxes on the undistributed E&P to be approximately $69 million at December 31, 2021.
The Company had gross unrecognized tax benefits, excluding interest, of approximately $51.4 million as of
December 31, 2021, that if recognized, would reduce the Company’s effective tax rate. In the next twelve months
it is reasonably possible that the Company will reduce its unrecognized tax benefits by an immaterial amount due
to the expiration of statutes of limitations. A tabular reconciliation of the Company’s gross unrecognized tax
benefits is as follows (in millions):
Gross unrecognized tax benefits at December 31, 2018 . . . . . . .
Gross increases—tax positions in prior periods . . . . . . . . . .
Gross increases—current period tax positions . . . . . . . . . . .
Lapse of statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross unrecognized tax benefits at December 31, 2019 . . . . . . .
Gross increases—tax positions in prior periods . . . . . . . . . .
Gross increases—current period tax positions . . . . . . . . . . .
Gross unrecognized tax benefits at December 31, 2020 . . . . . . .
Gross increases—tax positions in prior periods . . . . . . . . . .
Gross increases—current period tax positions . . . . . . . . . . .
Gross unrecognized tax benefits at December 31, 2021 . . . . . . .
$ 6.6
4.7
4.7
(0.1)
$15.9
1.2
5.6
$22.7
17.8
10.9
$51.4
The Company’s policy is to include accrued interest and penalties related to unrecognized tax benefits and
income tax liabilities, when applicable, in income tax expense. At December 31, 2021 and 2020, the Company
had approximately $3.1 million and $1.8 million, respectively, of accrued interest and penalties related to
uncertain tax positions included in other long-term liabilities in the consolidated balance sheets. The Company
recorded expense of $1.5 million for penalties and interest related to unrecognized tax benefits in the provision
for income taxes during the year ended December 31, 2021. There was no benefit recognized during the year
ended December 31, 2020.
The Company has been subject to a tax examination in Germany for the years 2009 through 2012 whereby
the German tax authorities had imposed additional tax assessments for those years. Due to the nature of the
100
additional tax assessments, the Company filed for competent authority relief from those assessments under the
Mutual Agreement Procedures (“MAP”) of the United States-Germany income tax treaty. The Company expects
the competent authorities to present a resolution for the 2009 through 2012 tax years during 2022. The Company
does not expect a material impact to the results of operations for the year ending December 31, 2022 as a result
of the resolution of this matter.
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 2021 were approximately 30.0% and 20.0% for Germany and Switzerland, respectively. The mix of earnings
in those two jurisdictions resulted in an increase of 5.7% from the U.S. statutory rate of 21% in 2021.
In 2020, the Company was granted an income tax holiday for our manufacturing facility in Malaysia. The
tax holiday allows for tax-free operations through February 28, 2023, with the option to apply for a 5 year
extension if certain conditions are met. This tax holiday had an immaterial impact to earnings per share for the
year ended December 31, 2021.
In connection with the Tax Cuts and Jobs Act (“TCJA”) of 2017, the Company recorded a toll charge
liability of $35.4 million. Of that amount, approximately $11.3 million has already been paid as of December 31,
2021.
In 2020, the U.S. Treasury Department issued final regulations regarding Foreign Derived Intangible
Income (“FDII”) and Global Intangible Low-Taxed Income (“GILTI”). We have determined we will elect the
GILTI high tax exception as allowed by the final regulations for the period ended December 31, 2021.
15. Leases
Operating lease cost is recognized over the lease term on a straight-line basis, while finance lease cost is
amortized over the expected term on a straight-line basis. Variable lease cost not dependent on an index or rate is
recognized when incurred and typically consists of amounts owed by the Company to a lessor that are not fixed,
such as reimbursement for common area maintenance and utilities cost.
The components of lease expense were as follows (in millions):
2021
2020
2019
Amortization of right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . .
Interest on lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1.5
0.1
$ 0.7
0.1
$ 0.3
—
Total finance lease cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short term lease cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variable lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sublease income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.6
24.0
4.2
3.0
(2.0)
0.8
23.3
3.9
3.4
(1.9)
0.3
24.9
2.2
3.5
(1.2)
Total lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$30.8
$29.5
$29.7
101
Supplemental balance sheet information related to leases was as follows (dollars in millions):
Operating leases
Operating lease assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liability—long term . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2021
2020
$59.9
17.9
41.8
$67.4
21.3
47.0
Weighted average remaining lease term . . . . . . . . . . . .
Weighted average discount rate . . . . . . . . . . . . . . . . . . .
5.1 years
5.2 years
5.0 years
1.6%
1.9%
2.3%
December 31,
2021
2020
2019
Finance leases
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt
December 31,
2021
2020
$4.6
1.7
2.6
$3.7
0.8
2.6
December 31,
2021
2020
2019
Weighted average remaining lease term . . . . . . . . . . . .
Weighted average discount rate . . . . . . . . . . . . . . . . . . .
2.9 years
3.3 years
3.7 years
1.6%
2.2%
3.0%
Supplemental cash flow information related to leases was as follows (in millions):
2021
2020
2019
Cash paid for amounts included in the measurement of lease
liabilities
Operating cash flows from finance leases . . . . . . . . . . . . . . . . . . .
Operating cash flows from operating leases . . . . . . . . . . . . . . . . .
Financing cash flows from finance leases . . . . . . . . . . . . . . . . . . .
$ 0.1
21.2
1.6
$ 0.1
24.0
0.9
$ —
27.1
0.4
Right-of-use assets obtained in exchange for lease liabilities
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$21.2
2.7
$24.3
2.6
Future lease payments under operating leases and finance leases as follows (in millions):
Operating Leases
Finance Leases
Twelve months ending December 31:
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total undiscounted lease payments . . . . . . . . . .
Less: imputed interest . . . . . . . . . . . . . . . . . . . . .
Total lease liabilities . . . . . . . . . . . . . . . . . .
$18.7
13.9
9.1
6.9
5.3
8.1
62.0
(2.3)
$59.7
$ 1.7
1.4
0.9
0.3
0.1
—
4.4
(0.1)
$ 4.3
102
16. Post Retirement Benefit Plans
Defined Contribution Plans
The Company sponsors various defined contribution plans that cover certain domestic and international
employees. The Company may make contributions to these plans at its discretion. The Company contributed
$9.4 million, $8.1 million and $8.7 million to such plans in the years ended December 31, 2021, 2020 and 2019,
respectively.
Defined Benefit Plans
Substantially all of the Company’s employees in Switzerland, France and Japan, as well as certain
employees in Germany, are covered by Company-sponsored defined benefit pension plans. Retirement benefits
are generally earned based on years of service and compensation during active employment. Eligibility is
generally determined in accordance with local statutory requirements; however, the level of benefits and terms of
vesting varies among plans.
The Company records pension service cost within cost of sales, selling, general and administrative, and
research and development expenses while non-service related pension costs are recorded within interest and other
income (expense), net in the consolidated statements of income and comprehensive income. The components of
net periodic benefit costs included in the accompanying consolidated statements of income were as follows (in
millions):
2021
2020
2019
Components of net periodic benefit costs:
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . .
Settlement loss recognized . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service (credit) cost . . . . . . . . . . . . . . .
Amortization of actuarial (gains) losses . . . . . . . . . . . . . . . . .
$ 8.1
0.5
(1.8)
0.1
0.9
2.6
$ 8.2
1.1
(2.5)
—
1.2
3.5
$ 6.4
2.6
(2.0)
—
1.1
0.9
Net periodic benefit costs . . . . . . . . . . . . . . . . . . . . . . . .
$10.4
$11.5
$ 9.0
The Company measures its benefit obligation and the fair value of plan assets as of December 31st each
year. The changes in benefit obligations and plan assets under the defined benefit pension plans, projected benefit
obligation and funded status of the plans were as follows (in millions):
Change in benefit obligation:
Benefit obligation at beginning of year . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participant contributions . . . . . . . . . . . . . . . . . . . . . .
Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss (gain)
Premiums paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of foreign currency exchange rates . . . . . . . . . . . .
2021
2020
$275.2
8.1
0.5
5.2
(10.9)
(0.5)
(6.4)
(5.4)
(1.8)
(10.1)
$255.0
8.2
1.1
4.4
(2.8)
—
(5.7)
(6.7)
(1.4)
23.1
Benefit obligation at end of year . . . . . . . . . . . . . . . .
253.9
275.2
103
Change in plan assets:
Fair value of plan assets at beginning of year
. . . . . . . .
Return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participant and employer contributions . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premiums paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of foreign currency exchange rates . . . . . . . . . .
Fair value of plan assets at end of year . . . . . . . . . .
2021
2020
150.5
(2.1)
12.4
(6.4)
(0.5)
(1.8)
(4.3)
147.8
131.4
3.1
10.7
(5.7)
—
(1.5)
12.5
150.5
Net under-funded status . . . . . . . . . . . . . . . . . . . . .
$(106.1)
$(124.7)
Plan amendments relate to further reductions in the mandatory and the supplementary conversion rates for
the pension plan in Switzerland that will be effective in 2022 and in 2023, respectively. The accumulated benefit
obligation for the defined benefit pension plans is $225.8 million and $260.4 million at December 31, 2021 and
2020, respectively. All defined benefit pension plans have an accumulated benefit obligation and projected
benefit obligation in excess of plan assets at December 31, 2021 and 2020.
The following amounts were recognized in the accompanying consolidated balance sheets for the
Company’s defined benefit plans (in millions):
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(1.8)
(104.3)
$
(1.9)
(122.8)
Net benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (106.1)
$ (124.7)
2021
2020
The following pre-tax amounts were recognized in accumulated other comprehensive income for the
Company’s defined benefit plans (in millions):
Reconciliation of amounts recognized in the consolidated
balance sheets:
Prior service cost (credit) . . . . . . . . . . . . . . . . . . . . . . .
Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . .
Accumulated contributions in excess of net periodic
2021
2020
2019
$
9.4
(50.1)
(40.7)
$
(2.4)
(56.6)
(59.0)
$
(6.0)
(62.3)
(68.3)
benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(65.4)
(65.7)
(55.3)
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . .
$(106.1)
$(124.7)
$(123.6)
The amount in accumulated other comprehensive income at December 31, 2021 expected to be recognized
as amortization of net loss within net periodic benefit cost in 2022 is $2.1 million.
For the defined benefit pension plans, the Company uses a corridor approach to amortize actuarial gains and
losses. Under this approach, net actuarial gains or losses in excess of ten percent of the larger of the projected
benefit obligation or the fair value of plan assets are amortized over the average remaining service of active
participants who are expected to receive benefits under the plans.
104
The following assumptions were used for defined benefit pension plans reflects the different economic
environments within the various countries. The assumptions used to determine the net periodic benefit costs and
the projected benefit obligations are as follows:
2021
Japan
France
Switzerland
Germany
Annual discount rate—defined benefit obligation . . . . . . . .
Annual discount rate—defined benefit cost . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . .
Expected rate of compensation increase . . . . . . . . . . . . . . .
0.4% 1.0%
0.4% 0.6%
0.0% 3.0%
3.0% 2.0%
0.4%
0.1%
1.2%
1.0%
0.8%
0.5%
0.0%
2.6%
2020
Japan
France
Switzerland
Germany
Annual discount rate—defined benefit obligation . . . . . . . .
Annual discount rate—defined benefit cost . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . .
Expected rate of compensation increase . . . . . . . . . . . . . . .
0.4% 0.6%
0.3% 0.8%
0.0% 3.0%
3.0% 2.0%
0.1%
0.3%
1.8%
1.0%
0.5%
1.1%
0.0%
2.6%
2019
Japan
France
Switzerland
Germany
Annual discount rate—defined benefit obligation . . . . . . . .
Annual discount rate—defined benefit cost . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . .
Expected rate of compensation increase . . . . . . . . . . . . . . .
0.3% 0.8%
0.5% 1.5%
0.0% 0.0%
2.9% 2.0%
0.3%
1.1%
1.6%
1.0%
1.1%
1.4%
0.0%
2.6%
To determine the expected long-term rate of return on pension plan assets, the Company considers current
asset allocations, as well as historical and expected returns on various asset categories of plan assets. For the
defined benefit pension plans, the Company applies the expected rate of return to a market-related value of
assets, which stabilizes variability in assets to which the expected return is applied.
Asset Allocations by Asset Category
The fair value of the Company’s pension plan assets by asset category and by level in the fair value
hierarchy, is as follows (in millions):
December 31, 2021
Plan Assets:
Group BPCE Life (a) . . . . . . . .
Swiss Life Collective BVG
Total
$
0.1
Foundation (b)
. . . . . . . . . . .
147.7
Total plan assets . . . . . . . .
$147.8
December 31, 2020
Plan Assets:
Group BPCE Life (a) . . . . . . . .
Swiss Life Collective BVG
Total
$
0.5
Foundation (b)
. . . . . . . . . . .
150.0
Total plan assets . . . . . . . .
$150.5
Quoted Prices in
Active Markets
Available (Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
$—
—
$—
$
0.1
147.7
$147.8
$—
—
$—
Quoted Prices in
Active Markets
Available (Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
$—
—
$—
$
0.5
150.0
$150.5
$—
—
$—
(a) The Company’s pension plan in France is invested in a larger fund that invests in a variety of instruments.
The assets are not directly dedicated to the French pension plan. The Group BPCE Life fund invests in debt
securities of foreign corporations and governments, equity securities of foreign government funds and
private real estate funds.
105
(b) The Company’s pension plan in Switzerland is outsourced to Swiss Life AG, an outside insurance provider.
Under the insurance contract, the plan assets are invested in Swiss Life Collective BVG Foundation (the
Foundation), which is an umbrella fund for which the retirement savings and interest rates are guaranteed a
minimum of 1.0% on the mandatory withdrawal portion, as defined by Swiss law, and 0.25% on the
non-mandatory portion starting 2022. The Foundation utilizes plan administrators and investment managers to
oversee the investment allocation process, set long-term strategic targets and monitor asset allocations. The
target allocations are 65% bonds, 2.5% cash, 7.5% equity investments and 25% real estate and mortgages.
Should the Foundation yield a return greater than the guaranteed amounts, the Company, according to Swiss
law, shall receive 90% of the additional return with Swiss Life AG retaining 10%. The withdrawal benefits and
interest allocations are secured at all times by Swiss Life AG.
Contributions and Estimated Future Benefit Payments
For all of our plans except Switzerland, we do not have plan assets to payout benefit payments.
Contributions are expected to be consistent with estimated benefit payments for the next fiscal year. The
estimated future benefit payments are based on the same assumptions used to measure the Company’s benefit
obligation at December 31, 2021. The following benefit payments reflect future employee service as appropriate
(in millions):
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027-2031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 8.1
8.0
8.5
8.4
8.5
47.5
17. Commitments and Contingencies
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. 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.
On September 25, 2019, in a complaint filed in the Düsseldorf, Germany, District Court, Carl Zeiss
Microscopy GmbH, a subsidiary of Carl Zeiss AG (Zeiss), sued Luxendo GmbH (Luxendo), a subsidiary of
Bruker Corporation, for infringement of a recently registered German utility model patent licensed to Zeiss
pertaining to one specific Luxendo product category. The Company is vigorously defending against these claims.
At December 31, 2021 and 2020, no material accruals have been recorded for potential contingencies.
Governmental Investigations
The Company is subject to regulation by national, state and local government agencies in the United States
and other countries in which it operates. From time to time, the Company is the subject of governmental
investigations often involving regulatory, marketing and other business practices. These governmental
investigations may result in the commencement of civil and criminal proceedings, fines, penalties and
administrative remedies which could have a material adverse effect on the Company’s financial position, results
of operations and/or liquidity.
106
In August 2018, the Korea Fair Trade Commission (KFTC) informed the Company that it was conducting
an investigation into the public tender bidding activities of a number of life science instrument companies
operating in Korea, including Bruker Korea Co., Ltd (Bruker Korea). The Company cooperated fully with the
KFTC and on June 16, 2019, the KFTC announced its decision to impose a civil fine of approximately $20,000
on Bruker Korea and declined to impose any criminal liability against Bruker Korea in connection with this
matter. As a result of the KFTC’s decision, the Korea Public Procurement Service (PPS) imposed a three-month
suspension on Bruker Korea’s ability to bid for or conduct sales to Korean government entities which ended on
March 27, 2020. Sales to Korean entities were less than 4% of the Company’s revenue for the year ended
December 31, 2021.
In late August 2019, the KFTC informed the Company that it was conducting a separate investigation into
the public tender bidding activities of a number of life science instrument companies operating in Korea,
including five public tenders involving Bruker Korea during 2015. The Company cooperated fully with the
KFTC and on July 8, 2020, the KFTC announced its decision to impose a civil fine of approximately $11,000 on
Bruker Korea and declined to impose any criminal liability against Bruker Korea in connection with this matter.
There was no suspension imposed in connection with this matter.
At December 31, 2021 and 2020, no material accruals have been recorded for potential contingencies related
to these matters. The Company does not expect additional losses to be incurred in excess of the amounts accrued.
Unconditional Purchase Commitments
The Company has entered into unconditional purchase commitments, in the ordinary course of business, that
include agreements to purchase goods, services or fixed assets and to pay royalties that are enforceable and
legally binding and that specify all significant terms including: fixed or minimum quantities to be purchased;
fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase
commitments exclude agreements that are cancelable at any time without penalty. The majority of these
commitments are expected to be settled during 2022.
Unconditional purchase commitments that are fixed and determinable are as follows (in millions):
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$254.3
40.9
1.9
5.5
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$302.6
License Agreements
The Company has entered into license agreements allowing it to utilize certain patents. If these patents are
used in connection with a commercial product sale, the Company pays royalties on the related product revenues.
Licensing fees for the years ended December 31, 2021, 2020 and 2019, were $5.8 million, $8.4 million and
$2.6 million, respectively, and are recorded in cost of product revenue in the consolidated statements of income
and comprehensive income.
Letters of Credit and Guarantees
At December 31, 2021 and 2020, the Company had bank guarantees of $116.4 million and $133.0 million,
respectively, 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.
107
Indemnifications
The Company enters into standard indemnification arrangements in the Company’s ordinary course of
business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the
indemnified parties for losses suffered or incurred by the indemnified party. These parties are generally the
Company’s directors, officers, business partners or customers, in connection with any patent, or any copyright or
other intellectual property infringement claim by any third party with respect to its products. The term of these
indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum
potential amount of future payments the Company could be required to make under these agreements is
unlimited. The Company believes the estimated fair value of these agreements is minimal based on historical
experiences.
18. Earnings Per 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 shareholders (in millions, except per share amounts):
Net income attributable to Bruker Corporation, as
reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 277.1
$ 157.8
$ 197.2
2021
2020
2019
Weighted average shares outstanding:
Weighted average shares outstanding-basic . . . . . . . . .
Effect of dilutive securities:
Stock options, restricted stock awards and
151.4
153.4
155.2
restricted stock units . . . . . . . . . . . . . . . . . . . . .
1.5
1.2
1.4
152.9
154.6
156.6
Net income per common share attributable to Bruker
Corporation shareholders:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1.83
$ 1.03
$ 1.27
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1.81
$ 1.02
$ 1.26
The following common share equivalents have been excluded from the computation of diluted weighted-
average shares outstanding, as their effect would have been anti-dilutive (in millions of shares):
2021
2020
2019
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Unvested restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.1 —
0.2 —
—
19. Shareholders’ Equity
Share Repurchase Program
In May 2019, the Company’s Board of Directors approved a share repurchase plan (the “2019 Repurchase
Program”) authorizing the purchase of the Company’s common stock up to $300.0 million from time to time, in
amounts, at prices, and at such times as management deems appropriate, subject to market conditions, legal
requirements and other considerations. The Company purchased a total of 555,602 shares at an aggregate cost of
$34.5 million during the year ended December 31, 2021. The Company purchased a total of 2,711,952 shares at
an aggregate cost of $123.2 million during the year ended December 31, 2020. The Company completed the
2019 Repurchase Program in April 2021, after reaching the maximum cumulative spend.
108
In May 2021, the Company’s Board of Directors approved a share repurchase plan (the “2021 Repurchase
Program”) authorizing the purchase of the Company’s common stock up to $500.0 million from time to time
over a two-year period, in amounts, at prices, and at such times as management deems appropriate, subject to
market conditions, legal requirements and other considerations. The Company purchased a total of 1,537,217
shares at an aggregate cost of $118.9 million under the 2021 Repurchase Program during the year ended
December 31, 2021. The remaining authorization as of December 31, 2021 is $381.1 million.
Cash Dividends on Common Stock
Dividends are declared by the Company’s Board of Directors in accordance with the Company’s dividend
policy. Under the policy, the Company targeted a $0.16 per share cash dividend per annum to the Company’s
shareholders payable in equal quarterly installments. Beginning in 2022, the Company is targeting a cash
dividend to our shareholders in the amount of $0.20 per share per annum, payable in equal quarterly installments.
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 (Loss)
The following is a summary of the components of accumulated other comprehensive income (loss), net of
tax (in millions):
Foreign
Currency
Translation
Derivatives
Designated
As Hedging
Instruments
Pension
Liability
Adjustment
Accumulated
Other
Comprehensive
Income (Loss)
Balance at December 31, 2018 . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . .
Realized gain on reclassification . . . . . . . . . .
Balance at December 31, 2019 . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . .
Realized gain on reclassification . . . . . . . . . .
Balance at December 31, 2020 . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . .
Realized gain on reclassification . . . . . . . . . .
$ 46.9
(3.8)
—
43.1
97.8
—
140.9
(77.8)
—
$ —
(15.7)
—
(15.7)
(75.8)
—
(91.5)
51.4
—
$(29.9)
(25.1)
2.1
(52.9)
2.3
4.9
(45.7)
11.6
2.9
$ 17.0
(44.6)
2.1
(25.5)
24.3
4.9
3.7
(14.8)
2.9
Balance at December 31, 2021 . . . . . . . . . . .
$ 63.1
$(40.1)
$(31.2)
$ (8.2)
Stock Compensation Plans
On March 9, 2010, the Company’s Board of Directors unanimously approved and adopted the Bruker
Corporation 2010 Incentive Compensation Plan (the “2010 Plan”), and on May 14, 2010, 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 determined to be
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. As of December 31, 2021, 5,545,090
options and 570,011 restricted stock awards have been granted under the 2010 Plan. At December 31, 2021,
533,688 options were outstanding under the 2010 Plan.
109
In May 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. 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. Stock option awards granted under the 2016 Plan typically vest over a
period of one to four years. As of December 31, 2021, 1,485,823 options and 2,100,581 restricted stock units
have been granted under the 2016 Plan. At December 31, 2021, 821,464 options and 654,470 restricted stock
units were outstanding under the 2016 Plan.
Members of the Company’s Board of Directors receive an annual award of restricted stock units which vest
over a one-year service period. 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.
Restricted shares of the Company’s common stock were periodically awarded to executive officers, directors and
certain key employees of the Company, subject to service restrictions, which vested ratably over periods of one
to four years. The restricted shares of common stock may not be sold or transferred during the restriction period.
Restricted stock units of the Company’s common stock are periodically awarded to executive officers, directors
and certain employees of the Company which vest ratably over service periods of one to four years.
Stock-based Compensation
The following presents the impact of stock-based compensation expense on our consolidated statements of
income (in millions):
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stock-based compensation . . . . . . . . . . . . . . . . . . . . . .
Cost of product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stock-based compensation . . . . . . . . . . . . . . . . . . . . . .
2021
2020
2019
$ 1.3
—
13.2
$14.5
$ 1.8
—
11.5
$13.3
$ 2.7
0.3
8.9
$11.9
2021
2020
2019
$ 2.2
10.1
2.2
$14.5
$ 2.0
9.3
2.0
$13.3
$ 1.8
8.3
1.8
$11.9
In addition to the awards above, the Company recorded stock-based compensation within other charges, net
of $2.7 million and $2.6 million at December 31, 2021 and 2020, respectively, and a benefit of $2.3 million in
the year ended December 31, 2019 related to the 2018 acquisition of Mestrelab Research, S.L.
At December 31, 2021, the Company expects to recognize pre-tax stock-based compensation expense of
$3.0 million associated with outstanding stock option awards granted under the Company’s stock plans over the
weighted average remaining service period of 2.5 years. The Company also expects to recognize
additional pre-tax stock-based compensation expense of $27.1 million associated with outstanding restricted
stock units granted under the Company’s 2016 Incentive Compensation Plan over the weighted average
remaining service period of 2.4 years.
110
Stock Option Awards
Stock option activity for the year ended December 31, 2021 is as follows:
Weighted-
Average Price
Per Share
Weighted -
Average
Remaining
Contractual
Term (in Years)
Aggregate
Intrinsic Value
(in millions) (a)
Outstanding at December 31, 2020 . . . .
Granted . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . .
Forfeited/Expired . . . . . . . . . . . . .
Number of
Options
1,856,176
79,632
(580,656)
—
Outstanding at December 31, 2021 . . . .
1,355,152
Exercisable at December 31, 2021 . . . .
1,093,488
$25.32
85.10
20.31
—
$30.98
$24.96
Exercisable and expected to vest at
December 31, 2021 (b) . . . . . . . . . . .
1,326,095
$30.32
4.2
$53.5
4.1
3.6
4.0
$71.9
$64.5
$71.2
(a) Represents the number of vested options at December 31, 2021, plus the number of unvested options at
December 31, 2021 that are ultimately expected to vest based on our estimated forfeiture rate.
(b) The aggregate intrinsic value is calculated as the positive difference between the exercise price of the
underlying options and the quoted price of our common stock on December 31, 2021.
The total intrinsic value of options exercised was $35.7 million, $6.1 million and $15.2 million for the years
ended December 31, 2021, 2020 and 2019, respectively.
Restricted Stock Units
Restricted stock unit activity is presented below:
Outstanding at December 31, 2020 . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares
Subject to
Restriction
805,052
218,223
(336,310)
(32,495)
Outstanding at December 31, 2021 . . . . . . . . . . . . . . .
654,470
Weighted-
Average Grant
Date Fair
Value Per
Share
$39.63
78.03
37.26
43.90
$53.44
The total fair value of restricted stock vested was $27.1 million, $15.0 million and $7.9 million for the years
ended December 31, 2021, 2020 and 2019, respectively.
111
20. Other Charges, Net
The components of other charges, net were as follows (in millions):
Acquisition-related expenses, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional fees incurred in connection with investigation
matters and other legal matters . . . . . . . . . . . . . . . . . . . . . . . . . .
Information technology transformation costs . . . . . . . . . . . . . . . . .
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-lived asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
2020
2019
$ 6.1
$ 2.4
$ 4.6
1.1
2.8
4.8
(0.5)
5.9
2.5
12.0
2.1
2.1
3.7
(3.9)
—
Other charges, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$14.3
$24.9
$ 6.5
Restructuring Initiatives
Restructuring charges for the years ended December 31, 2021, 2020 and 2019 included charges for various
other programs which were recorded in the accompanying consolidated statements of income and comprehensive
income as follows (in millions):
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other charges, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
$3.4
4.8
$8.2
2020
2019
$ 3.8
12.0
$15.8
$ 5.3
(3.9)
$ 1.4
The restructuring charges included a gain on the sale of a building of $7.7 million in the year ended
December 31, 2019.
The following table sets forth the changes in the restructuring reserves (in millions):
Total
Severance
Exit Costs
Provisions for
Excess
Inventory
Balance at December 31, 2018 . . . . . . . . . . . . . . . . .
Restructuring charges . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash adjustments . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
Foreign currency impact
Balance at December 31, 2019 . . . . . . . . . . . . . . . . .
Restructuring charges . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash adjustments . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
Foreign currency impact
Balance at December 31, 2020 . . . . . . . . . . . . . . . . .
Restructuring charges . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash adjustments . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
Foreign currency impact
$ 7.3
1.4
(6.8)
2.9
(0.2)
$ 4.6
15.8
(10.0)
(1.0)
0.4
$ 9.8
8.2
(10.3)
(1.1)
(0.2)
Balance at December 31, 2021 . . . . . . . . . . . . . . . . .
$ 6.4
$ 2.0
6.1
(5.3)
(0.5)
(0.1)
$ 2.2
13.6
(8.0)
(0.5)
0.3
$ 7.6
5.3
(9.3)
—
(0.1)
$ 3.5
$ 1.4
(5.0)
(1.5)
5.2
—
$ 0.1
2.0
(2.0)
0.7
—
$ 0.8
1.5
(1.0)
(1.0)
—
$ 0.3
$ 3.9
0.3
—
(1.8)
(0.1)
$ 2.3
0.2
—
(1.2)
0.1
$ 1.4
1.4
—
(0.1)
(0.1)
$ 2.6
112
21. Interest and Other Income (Expense), Net
The components of interest and other income (expense), net were as follows (in millions):
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange losses on foreign currency transactions . . . . . . . . . . .
Pension components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 0.9
(14.3)
(4.1)
(2.2)
$ 3.2
(14.4)
(8.0)
(3.3)
$ 1.3
(16.0)
(3.3)
(2.5)
Interest and other income (expense), net . . . . . . . . . . . . . .
$(19.7)
$(22.5)
$(20.5)
2021
2020
2019
22. Business Segment Information
The Company has three reportable segments, BSI Life Science, BSI Nano and BEST, as discussed in Note 1
to the consolidated financial statements.
Selected reportable segment information is presented below (in millions):
2021
2020
2019
Revenue:
BSI Life Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BSI Nano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations (a)
$1,510.6
697.5
223.8
(14.0)
$1,253.9
556.1
189.5
(12.0)
$1,244.9
632.7
209.9
(14.9)
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,417.9
$1,987.5
$2,072.6
Operating Income:
BSI Life Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BSI Nano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate, eliminations and other (b) . . . . . . . . . . . . . . .
$ 385.4
73.4
22.2
(67.7)
$ 273.8
23.6
6.2
(55.3)
$ 290.3
40.4
16.4
(46.2)
Total operating income . . . . . . . . . . . . . . . . . . . . . .
$ 413.3
$ 248.3
$ 300.9
(a) Represents product and service revenue between reportable segments.
(b) Represents corporate costs and eliminations not allocated to the reportable segments.
Total assets by segment are as follows (in millions):
Assets:
BSI Life Science, BSI Nano & Corporate . . . . . . . . . . . . . .
BEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eliminations and other (a) . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,560.5
97.9
(8.4)
$2,964.5
88.7
(4.2)
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,650.0
$3,049.0
2021
2020
(a) Assets not allocated to the reportable segments and eliminations of intercompany transactions.
The Company is unable, without unreasonable effort or expense to disclose the amount of total assets by the
BSI Life Science and BSI Nano Segments as well as the Corporate function and further, the Company’s chief
operating decision maker does not receive any asset information by operating segment.
113
Total capital expenditures and depreciation and amortization by segment are presented below (in millions):
Capital Expenditures:
BSI Life Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BSI Nano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and Amortization:
BSI Life Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BSI Nano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total depreciation and amortization . . . . . . . . . . . . . . . . . .
2021
2020
2019
$61.3
16.8
4.7
9.2
$ 92.0
$41.1
37.4
4.3
6.3
$ 89.1
$59.1
10.6
17.4
10.1
$ 97.2
$35.0
35.7
4.0
5.7
$ 80.4
$44.4
18.5
4.7
5.4
$ 73.0
$30.5
35.9
3.8
5.4
$ 75.6
Revenue and long-lived assets (including property, plant and equipment, net and operating lease right of use
assets) by geographical area are as follows (in millions):
Revenue:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rest of Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
2020
2019
$ 601.0
262.6
658.1
729.1
167.1
$ 455.9
244.9
519.8
629.1
137.8
$ 529.8
213.6
505.2
651.0
173.0
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,417.9
$1,987.5
$2,072.6
Long-lived assets:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rest of Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
2020
2019
$ 51.3
244.0
141.5
22.6
6.6
$ 61.3
227.8
144.7
22.1
7.1
$ 53.2
175.1
118.3
16.4
8.7
Total long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . .
$ 466.0
$ 463.0
$ 371.7
23. Related Parties
On February 26, 2020, the Company acquired land and buildings at 15 Fortune Drive and 44 Manning Road,
both in Billerica MA, for a total purchase price of $12.3 million. Each property was owned by a trust controlled
equally by Bruker’s President & CEO, Frank Laukien, and his half-brother, Dirk D. Laukien. Both properties
acquired are adjacent to Bruker’s headquarters building at 40 Manning Road, a property already owned by the
Company. Bruker BioSpin formerly leased the property at 15 Fortune Drive and will continue to occupy the
property for the foreseeable future. The property at 44 Manning Road, which is currently fully leased to unrelated
third parties, provides for potential expansion of Bruker operations in the future.
114
The purchase price was allocated between the two properties as follows: $5.6 million for 15 Fortune Drive
and $6.7 million for 44 Manning Road. The price for each property was established based on an independent
third-party appraisal. The Audit Committee of the Board reviewed, voted on and approved this related party
transaction in accordance with Bruker’s Related Persons Transactions Policy and the Audit Committee charter.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have established disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to
provide reasonable assurance that information required to be disclosed in the reports that we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules
and forms of the SEC and to ensure that such information is accumulated and communicated to management,
including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal
financial officer), to allow timely decisions regarding required disclosures. Under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief Financial Officer, we
conducted an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2021.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective at a reasonable assurance level as of December 31, 2021.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting. Under the supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over
financial reporting as of December 31, 2021, based on the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based
on this evaluation, management concluded that our internal control over financial reporting was effective as of
December 31, 2021.
We excluded SCI Instruments, SVXR, Inc. and Molecubes NV from our assessment of internal control over
financial reporting as of December 31, 2021 because they were acquired by the Company in business
combinations during 2021. The total assets and total revenues of SCI Instruments, SVXR, Inc. and Molecubes
NV, wholly-owned subsidiaries, collectively represent 1.9% and 0.4%, respectively, of the related consolidated
financial statement amounts as of and for the year ended December 31, 2021.
PricewaterhouseCoopers LLP, our independent registered public accounting firm has audited the
effectiveness of our internal control over financial reporting as of December 31, 2021, as stated in their report
which is included herein.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended
December 31, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
115
ITEM 9B OTHER INFORMATION
None.
ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
116
PART III
ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The full text of our code of conduct, which applies to our Principal Executive Officer, Principal Financial
Officer, Principal Accounting Officer and Board of Directors is published on our Investor Relations website at
www.bruker.com. We intend to disclose future amendments to certain provisions of our Code, or waivers of such
provisions granted to executive officers and directors, on the website within four business days following the
date of such amendment or waiver.
The information required by this item of Form 10-K is incorporated by reference to our definitive proxy
statement (which will be filed with the SEC pursuant to Regulation 14A under the Exchange Act) relating to our
2022 Annual Meeting of Stockholders.
ITEM 11 EXECUTIVE COMPENSATION
The information required by this item of Form 10-K is incorporated by reference to our definitive proxy
statement (which will be filed with the SEC pursuant to Regulation 14A under the Exchange Act) relating to our
2022 Annual Meeting of Stockholders.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item of Form 10-K is incorporated by reference to our definitive proxy
statement (which will be filed with the SEC pursuant to Regulation 14A under the Exchange Act) relating to our
2022 Annual Meeting of Stockholders.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by this item of Form 10-K is incorporated by reference to our definitive proxy
statement (which will be filed with the SEC pursuant to Regulation 14A under the Exchange Act) relating to our
2022 Annual Meeting of Stockholders.
ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is PricewaterhouseCoopers LLP, New York, NY,
PCAOB ID 238.
The information required by this item of Form 10-K is incorporated by reference to our definitive proxy
statement (which will be filed with the SEC pursuant to Regulation 14A under the Exchange Act) relating to our
2022 Annual Meeting of Stockholders.
117
PART IV
ITEM 15 EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES
(a) Financial Statements and Schedules
(1) Financial Statements
The financial statements required by this item are filed as part of this report under Item 8—Financial
Statements and Supplementary Data.
(2) Financial Statement Schedules
The financial statements required by this item are filed as part of this report under Item 8—Financial
Statements and Supplementary Data.
(3) Exhibits
(b) List of Exhibits
Exhibit
Number
3.1
3.2
4.1
4.2
10.1†
10.2†
10.3†
10.4†
10.5†
10.6†
10.7†
10.8†
EXHIBIT INDEX
Description
Incorporated by Reference
Form
Filing Date
Restated Certificate of Incorporation of Bruker Corporation
Form 10-K March 27, 2020
Amended and Restated Bylaws of Bruker Corporation
Form 10-Q
August 8, 2020
Specimen Stock Certificate Representing Shares of Common
Stock of Bruker Corporation
Form 10-K
March 1, 2017
Description of the Registrant’s Securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934
Form 10-K March 27, 2020
Bruker Corporation 2010 Incentive Compensation Plan
Schedule 14A April 14, 2010
Bruker Corporation 2010 Incentive Compensation Plan Form of
Incentive Stock Option Agreement
Form 10-Q
August 9, 2010
Bruker Corporation 2010 Incentive Compensation Plan Form of
Non-Qualified Stock Option Agreement
Form 10-Q
August 9, 2010
Bruker Corporation 2010 Incentive Compensation Plan Form of
Restricted Stock Agreement
Form 10-Q
August 9, 2010
Bruker Corporation 2016 Incentive Compensation Plan
Schedule 14A April 22, 2016
Bruker Corporation 2016 Incentive Compensation Plan Form of
Incentive Stock Option Agreement
Form 10-Q
August 9, 2019
Bruker Corporation 2016 Incentive Compensation Plan Form of
Non-Qualified Stock Option Agreement
Form 10-Q
August 9, 2019
Bruker Corporation 2016 Incentive Compensation Plan Form of
Restricted Stock Unit Agreement
Form 10-Q
August 9, 2019
118
Incorporated by Reference
Form
Filing Date
Form 10-K
March 1, 2017
Form 8-K
May 25, 2011
Exhibit
Number
10.9†
10.10
Description
Bruker Corporation 2016 Incentive Compensation Plan Form of
Director Restricted Stock Unit Agreement
Amended and Restated Credit Agreement, dated as of May 24,
2011, by and among the Company, Bruker AXS GmbH, Bruker
Daltonik GmbH, Bruker Optik GmbH, Bruker Physik GmbH,
Bruker BioSpin Invest AG, Bruker BioSpin AG and Bruker BioSpin
International AG, the other foreign subsidiary borrowers from time
to time party thereto, the lenders from time to time party thereto,
Deutsche Bank Securities Inc., Commerzbank Ag, New York,
Grand Cayman And Stuttgart Branches and RBS Citizens, National
Association, as Co-Documentation Agents, Bank of America, N.A.
as Syndication Agent and JPMorgan Chase Bank, N.A., as
Administrative Agent
10.11*
Note Purchase Agreement, dated January 18, 2012
Form 8-K
January 19, 2012
10.12
10.13
First Amendment to the Note Purchase Agreement, date
January 18, 2012
Credit Agreement, dated October 27, 2015, by and among the
Company and certain of its foreign subsidiaries as borrowers,
Citizens Bank, N.A., Deutsche Bank Securities Inc. and TD
Bank, N.A., as Co-Documentation Agents, Bank of America,
N.A. and Wells Fargo Bank, National Association, as
Co-Syndication Agents, JPMorgan Chase Bank, N.A., as
Administrative Agent for itself and the other lenders party
thereto, and the several banks or other financial institutions or
entities from time to time party thereto as lenders
10.14†
Bruker Corporation 2019 Short-Term Incentive Compensation
Program
10.15†** Bruker Corporation 2022 Short-Term Incentive Compensation
Program
Form 10-Q
August 7, 2020
Form 8-K
October 29, 2015
Form 8-K February 21, 2019
10.16†
10.17†
10.18†
10.19†
10.20†
Offer Letter, dated March 17, 2018, by and between the
Company and Gerald N. Herman
Form 10-Q
May 10, 2018
Offer Letter, dated June 4, 2018, by and between the Company
and Gerald N. Herman
Form 10-Q
August 9, 2018
Contract of Employment, dated May 1, 2018, by and between the
Company and Falko Busse
Form 10-Q
August 9, 2018
Employment Offer Letter Agreement, dated June 25, 2012, by
and between the Company and Juergen Srega
Form 10-Q
May 9, 2013
Managing Director Employment Contract, dated as of June 28,
2012, by and between Bruker Daltonik GmbH and Juergen Srega,
as amended pursuant to the Supplement to the Managing Director
Employment Contract, dated as of December 12, 2019
Form 10-K March 27, 2020
10.21†
Form of Indemnification Agreement of Officers and Directors
Form 8-K February 11, 2019
10.22
Purchase and Sale Agreement between Bruker Corporation and
Frank Laukien and Dirk D. Laukien as Trustees of 44 Manning
Road Realty Trust and Umbrina Associates, dated October 31, 2019
Form 10-Q November 4, 2019
119
Exhibit
Number
10.23
10.24
10.25
10.26
10.27
10.28
21.1 **
23.1 **
24.1 **
31.1 **
31.2 **
32.1 **
Description
Credit Agreement, dated December 11, 2019, by and among the
Company and certain of its subsidiaries as borrowers, Deutsche
Bank Securities Inc. and Wells Fargo Bank, National Association,
as Co-Syndication Agents, Citizens Bank, N.A., Credit Suisse
(Switzerland) Ltd., TD Bank, N.A. and U.S. Bank National
Association, as Co-Documentation Agents, Bank of America,
N.A., as Administrative Agent, Swing Line Lender and Issuing
Bank, and the several banks or other financial institutions or
entities from time to time party thereto as lenders
Term Loan Agreement, dated December 11, 2019, by and
among the Company and certain of its subsidiaries, and Bank
of America, N.A. as Administrative Agent, TD Bank, N.A.
and the other banks or other financial institutions or entities
from time to time party thereto as lenders
Incorporated by Reference
Form
Filing Date
Form 8-K December 12, 2019
Form 8-K December 12, 2019
Note Purchase Agreement dated as of December 11, 2019
Form 8-K December 12, 2019
First Amendment to the Note Purchase Agreement, dated as of
December 11, 2019
Form 10-Q
August 7, 2020
First Amendment to Term Loan Agreement, dated as of
May 12, 2021
Form 10-Q
August 5, 2021
Note Purchase Agreement dated as of December 7, 2021
Form 8-K
December 8, 2021
Subsidiaries of the Company
Consent of PricewaterhouseCoopers LLP, Independent
Registered Public Accounting Firm
Power of attorney (included on signature page hereto)
Certification by Principal Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Certification by Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Certification by Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS **
Inline XBRL Instance Document
101.SCH **
Inline XBRL Taxonomy Extension Schema Document
101.CAL **
Inline XBRL Taxonomy Extension Calculation Linkbase
Document
101.DEF **
Inline XBRL Taxonomy Extension Definition Linkbase
Document
101.LAB **
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE**
Inline XBRL Taxonomy Extension Presentation Linkbase
Document
104**
The cover page from the Company’s Annual Report on
Form 10-K for the year ended December 31, 2021 has been
formatted in Inline XBRL (included in Exhibit 101)
120
*
Certain portions have been omitted pursuant to an order granting confidential treatment and have been filed
separately with the Securities and Exchange Commission.
Designates management contract or compensatory plan or arrangement.
†
** Filed or furnished herewith.
No other instruments defining the rights of holders of long-term debt of the registrant or its subsidiaries
have been filed as Exhibits because no such instruments met the threshold materiality requirements under
Regulation S-K. The registrant agrees, however, to furnish a copy of any such instruments to the Commission
upon request.
ITEM 16 FORM 10-K SUMMARY
Not Applicable.
121
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: February 28, 2022
By: /s/ FRANK H. LAUKIEN, PH.D.
BRUKER CORPORATION
Name: Frank H. Laukien, Ph.D.
Title: President, Chief Executive Officer and Chairman
We, the undersigned officers and directors of Bruker Corporation, hereby severally constitute and appoint
Frank H. Laukien, Ph.D. to sign for us and in our names in the capacities indicated below, the report on
Form 10-K filed herewith and any and all amendments to such report, and to file the same, with all exhibits
thereto and other documents in connection therewith, in each case, with the Securities and Exchange
Commission, and generally to do all such things in our names and on our behalf in our capacities consistent with
the provisions of the Securities Exchange Act of 1934, as amended, and all requirements of the Securities and
Exchange Commission.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
Title
Date
/S/ FRANK H. LAUKIEN, PH.D.
Frank H. Laukien, Ph.D.
/S/ GERALD N. HERMAN
Gerald N. Herman
President, Chief Executive Officer
and Chairman (Principal Executive
Officer)
Executive Vice President and Chief
Financial Officer (Principal
Financial Officer and Principal
Accounting Officer)
February 28, 2022
February 28, 2022
/S/ BONNIE H. ANDERSON
Director
February 28, 2022
Bonnie H. Anderson
/S/ CYNTHIA M. FRIEND, PH.D.
Director
February 28, 2022
Cynthia Friend, Ph.D.
/S/ MARC A. KASTNER, PH.D.
Director
February 28, 2022
Marc A. Kastner, Ph.D.
/S/ WILLIAM A. LINTON
Director
February 28, 2022
William A. Linton
/S/ JOHN ORNELL
John Ornell
Director
February 28, 2022
/S/ RICHARD A. PACKER
Director
February 28, 2022
Richard A. Packer
122
/S/ ADELENE Q. PERKINS
Director
February 28, 2022
Adelene Q. Perkins
/S/ HERMANN REQUARDT, PH.D.
Director
February 28, 2022
Hermann Requardt, Ph.D.
/S/ ROBERT ROSENTHAL, PH.D.
Director
February 28, 2022
Robert Rosenthal, Ph.D.
123
Exhibit 10.15
Bruker Corporation
2022 Short-Term Incentive Compensation Program
Program Objectives
The Bruker Corporation (“Bruker” or the “Company”) 2022 Short-Term Incentive Compensation Program (the “ICP” or “Program”) is designed to
reward employees for performance that contributes to the Company’s growth and financial success.
The Program is designed to reward several layers of success at the Bruker Corporate, Group, Divisional, Business Unit, functional, and individual
levels, while maintaining a focus on improvement over prior year results. Incentive Awards under this Program are granted as “Cash-Based Awards”
pursuant to and in accordance with the terms of the Bruker Corporation 2016 Incentive Compensation Plan (the “2016 Plan”). Capitalized terms used
but not defined herein shall have the meanings ascribed to them under the 2016 Plan.
Eligibility
Employees, including executives and managers, of the Company and its subsidiaries are eligible to participate in the Program, as the Committee (as
defined below) may determine at its discretion. Sales-commissioned employees and employees participating in any other cash-based incentive plan of
the Company or any of its subsidiaries are not eligible to participate in the ICP. Employees participating in this ICP are generally not eligible to
participate in any other cash-based incentive plan of the Company and its subsidiaries.
Any Incentive Award for any employee who becomes eligible to participate in the Program after the beginning of the Performance Period shall be
pro-rated based on the employee’s participation date. An employee must commence employment or transfer into an eligible position, as applicable, prior
to November 15th of the Performance Period in order to be eligible to participate in the Program for that Performance Period, unless otherwise
determined by the Committee.
Incentive Targets and Incentive Awards
Each Participant shall have a pre-determined Incentive Target, which will be determined by the Committee and communicated to the Participant.
Additionally, the conditions to achieve the Incentive Target shall also be pre-determined. Achievement of a Participant’s Incentive Target typically
depends on a combination of Company or business achievement of financial goals and
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2022 Short-Term Incentive Compensation Program
achievement of individual goals, with weightings assigned to each based on Committee discretion and the Participant’s level in the organization.
Incentive Award payouts are calculated and paid annually based on Company and individual performance relative to the goals, such that actual Incentive
Award payouts can be below, at, or above the Incentive Target.
Incentive Award Achievement and Maximums
Financial Goals
Each financial goal has a minimum of 0% payout and a maximum of 200%, with payouts determined relative to the achievement of each of the specified
performance goals on a linear basis, e.g., 110% performance results in 110% payout for any one financial metric.
For purposes of this Program, financial goals may be determined pursuant to generally accepted accounting principles (GAAP) or on a non-GAAP basis
and may include the following metrics or variations thereof: earnings per share (EPS); pre-tax or after-tax net income; operating income or profit; cash
flow; gross or net revenues; gross or net sales; costs (including cost reductions); margins; units sold; market share; stock price; total shareholder return;
return on sales, assets, equity, capital or investment; earnings before deducting one or more of interest, taxes, depreciation and amortization; capital
expenditures; working capital; inventory decrease; effective tax rate in one or more jurisdictions; planning for, or completion or implementation of,
acquisitions or divestitures of specific product lines, business segments, business units, divisions or subsidiaries; or other balance sheet or income
statement objectives approved by the Committee.
Performance goals may be set at the consolidated level, segment level, division level, group level, business unit level, country or regional level.
Additionally, performance goals may be measured on an absolute basis or relative to pre-established targets, a previous year’s results or to a designated
comparison group, in each case as specified by the Committee.
The Committee may, in its sole discretion and in accordance with and subject to the terms of the 2016 Plan, adjust Incentive Awards to take into account
the effects of any Extraordinary Items (as defined below).
Differences in weightings of financial goals, or the financial goals themselves, may exist between the Corporate and Group/Divisional financial metrics
to reflect organizational scope, responsibility, and shareholder expectations. Each of the metrics may also be weighted to reflect the relative importance
of each of the goals. Participants in the operating groups may have a portion of their financial goals tied to their direct area of responsibility or some
other area related
Bruker Corporation
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2022 Short-Term Incentive Compensation Program
to their responsibility (e.g., an organization that is “1-up” from their current direct area of accountability) to encourage teamwork, collaboration, and
alignment across the organization.
The determination of achievement of financial goals for purposes of Incentive Award calculations will be based, in part, upon final audited financial
statements for the Performance Period; and, where applicable, the baseline numbers will be the prior year audited financial results as approved by the
Board.
Individual Goals
All individual goals will be established by the Committee and communicated to the Participant. Individual performance will be assessed by the
Committee based on achievement of individual goals. Payouts will be determined by the Committee, based, in part, on the Committee’s assessment of
individual performance relative to each of the specified goals and the applicable annual budget. Individual performance has a minimum payout of 0%
and a maximum payout of 125%.
Total Award Opportunity
Results of the financial goals relative to their respective targets will be multiplied by the corresponding payout percentage tied to the specific level of
performance for each goal. Those products will then be added together to derive the final payout percentage for the financial portion of the award.
Results of the individual goals will be used in determining the overall payout for the individual portion of the award.
Award Payments
After the Performance Period has ended, the Committee shall determine the amount of each Participant’s Incentive Award, if any, based on the
achievement of the financial goals and individual goals over the Performance Period, market conditions and the Committee’s exercise of discretion. The
factors used in determining the amount of the Incentive Award are in the sole discretion of the Committee, and may include the achievement of
individual performance, employee contributions to other areas of the Company, compliance with Company policies and procedures, teamwork, market
conditions, overall Company performance, or other factors determined by senior management from time to time.
Incentive Awards, if any, will be paid to eligible Participants in the calendar year following the calendar year in which the Performance Period ends
shortly after audited results are approved by the Board and reported by the Company and the Committee determines Incentive Award amounts.
Bruker Corporation
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2022 Short-Term Incentive Compensation Program
Participants must be active employees on payroll in an eligible position on the payout date to receive an Incentive Award; provided that Participants who
transfer to an ineligible position after the beginning of the Performance Period will remain eligible to receive a pro-rated Incentive Award based on the
time the Participant worked in the eligible position during the Performance Period. To be eligible to receive any Incentive Award under the Program, the
Participant must be considered in good standing as determined by the Committee in its sole discretion and may not be on a performance improvement
plan.
If an employee is terminated involuntarily prior to the end of a Performance Period, the Committee may, in its sole discretion, determine whether to pay
any portion of the Incentive Award, taking into account such things as individual performance and length of time the employee performed in the
designated role during the Performance Period. In no event will any employee who resigns for any reason, or who is terminated for performance reasons
or for violation of Company policies prior to the date of the Incentive Award payout be eligible to receive any portion of an Incentive Award.
The payment of Incentive Awards pursuant to the achievement of the individual goals is subject to the satisfaction of minimum performance
expectations, as determined by the Committee. Such minimum performance expectations include, without limitation, compliance by the Participant and
the Participant’s organization with the Company’s Code of Conduct and other policies.
In the event the Committee determines that a Participant’s performance, or the performance of the Participant’s organization, has failed to meet the
minimum standard of performance reasonably expected of such Participant, the Participant may receive only such portion of his or her Incentive Award
calculated as payable in respect of individual goals, which could be zero, as may be so determined by the Committee.
In addition, in the event such failure to achieve minimum performance expectations is due to a material violation of the Code of Conduct or other
Company policies which fall within the Participant’s area of responsibility, either individually or with respect to Participant’s organization, the ability of
the Committee to reduce or eliminate the portion of Incentive Awards calculated as payable in respect of such individual goals shall be extended to and
include the ability to eliminate or reduce the payment of amounts calculated as payable pursuant to the achievement of the financial goals.
A Participant has no contractual right to an Incentive Award. The Committee has discretion to determine whether a Participant will receive an Incentive
Award and has sole discretion to determine the amount of the Incentive Award, if any. No Incentive Award is earned until the Committee has determined
the amount
Bruker Corporation
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2022 Short-Term Incentive Compensation Program
payable and the Participant has met all of the conditions of the Program. An Incentive Award in one year is not a guarantee of eligibility to participate in
the Program, or an Incentive Award of any amount, in subsequent years.
General Provisions
Administration
The terms and conditions of the Program are subject to the provisions of the 2016 Plan. The Committee is responsible for approving Incentive Targets,
establishing financial and independent goals, assessing performance and determining the amount payable with respect to each Incentive Award, and for
administering the Program in accordance with and subject to the terms and conditions of the 2016 Plan. The Committee shall have full and sole
discretionary authority to interpret the Program, to establish and amend rules and regulations relating to it, and to make all other determinations
necessary or advisable for the administration of the Program.
All interpretations and determinations, including determinations of the amount of Incentive Awards due any Participant, made by the Committee shall be
final and binding on all persons.
Termination and Amendment
The Company reserves the right to amend, modify, suspend or terminate the Program at any time solely in its discretion with or without notice to
Participants.
No Right to Employment
Nothing contained herein shall in any way alter the nature of employment at the Company or constitute a contract of employment or in any way be
construed to confer on the Participant any right to continue as a participant in the 2016 Plan or the Program or as an employee of the Company or any
subsidiary of the Company.
Recoupment
Payments made to any Participant pursuant to an Incentive Award shall be subject to clawback: (1) to the extent of the excess of what would have been
paid to the Participant under a Restatement (as defined below), (2) in the event that a Participant, during employment or other service covered by this
Program, shall engage in activity detrimental to the business of the Company, (3) as required by any clawback policy implemented by the Company, or
(4) as otherwise required by any provision of any law, government rule or regulation, or stock exchange listing requirement.
Bruker Corporation
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2022 Short-Term Incentive Compensation Program
Tax Withholding
The Company and its subsidiaries shall have the right to withhold from any amount payable hereunder any amount it reasonably determines is sufficient
to satisfy all applicable country-specific tax withholding requirements and to take such other action as may be necessary or advisable in the opinion of
the Company and its subsidiaries to satisfy all obligations for withholding of such taxes.
Section 409A
The Program is intended to comply with the short-term deferral rule set forth in the regulations under section 409A of the Code, in order to avoid
application of section 409A to the Program. If and to the extent that any payment under this Program is deemed to be deferred compensation subject to
the requirements of section 409A, this Program shall be administered so that such payments are made in accordance with the requirements of section
409A, including the six-month delay required for “specified employees,” if applicable. In no event shall a Participant, directly or indirectly, designate
the calendar year of payment, except in accordance with Section 409A. Notwithstanding anything in this Program to the contrary, each Participant shall
be solely responsible for the tax consequences of any Incentive Award, and in no event shall the Company or any subsidiary have any responsibility or
liability if any Incentive Award does not meet the applicable requirements of Section 409A of the Code. Although the Company intends to administer the
Program to prevent taxation under Section 409A of the Code, the Company does not represent or warrant that the Program or any Incentive Award
complies with any provision of federal, state, local or other tax law.
Change in Control
Notwithstanding other provisions of the Program, in the event of a Change in Control of the Company:
(1)
If an Incentive Award is continued or assumed and within the lesser of the expiration of the Performance Period and 12 months
following the Change in Control the Company (or its successor) involuntarily terminates the Participant without Cause or the
Participant voluntarily terminates for Good Reason then, upon such termination, the Incentive Target payout opportunity under such
Incentive Award will be deemed to have been earned on a pro rata basis for that portion of the Performance Period(s) completed as
of the effective date of such qualifying termination and will be paid to the Participant within 30 days following such termination,
unless the acceleration of payment would result in additional taxes under Section 409A of the Internal Revenue Code.
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2022 Short-Term Incentive Compensation Program
(2)
If an Incentive Award is not continued or assumed, the Incentive Target payout opportunity under such Incentive Award will be
deemed to have been earned on a pro rata basis for that portion of the Performance Period completed as of the effective date of such
Change in Control and will be paid to the Participant within 30 days following such Change in Control, unless the acceleration of
payment would result in additional taxes under Section 409A of the Internal Revenue Code.
Unfunded Arrangement
The obligations of the Company under this Program shall be unsecured and unfunded obligations, and to the extent that any Participant acquires a right
to receive a payment under this Program, such right shall be no greater than the right of an unsecured general creditor of the Company and no
Participant shall have any right, title or interest in any of the assets of the Company or its affiliates. No assets of the Company or its affiliates shall be
held under any trust, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Program. Any and all assets
of the Company and its affiliates shall be, and remain, the general unpledged, unrestricted assets thereof.
Transferability
No right or interest of any Participant under the Program and no Incentive Award will be assignable or transferable, in whole or in part, by the
Participant either directly or by operation of law or otherwise, including without limitation by execution, levy, garnishment, attachment, pledge or in any
manner; no attempted assignment or transfer thereof will be effective; and no right or interest of any Participant under the Program and any Incentive
Award will be liable for, or subject to, any obligation or liability of such Participant.
Successors
The Program shall be binding upon and inure to the benefit of the Company, its successors and assigns, and each Participant and the Participant’s heirs,
executors, administrators and legal representatives.
Governing Law
This Program, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware, without reference
to principles of conflict of laws which would require application of the law of another jurisdiction.
Entire Agreement
This Program, together with the 2016 Plan, constitutes the entire agreement of the Company with respect to the subject matter thereof and cannot be
modified by any oral statement or otherwise except by written action of the Committee or the Board.
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2022 Short-Term Incentive Compensation Program
This Program applies to all employees globally, with such adjustments for local law and local business and accounting practices as the Committee may
determine, including as set forth on the Addendum attached hereto.
Definitions
Committee: means the Compensation Committee with respect to the Company’s executive officers and other senior-level employees identified by the
Compensation Committee, and the Participant’s manager or applicable Group President with respect to all other Participants.
Extraordinary Items: means unusual or nonrecurring events affecting the Company or the financial statements of the Company, such as, but not limited
to, (a) effects of changes in foreign exchange, (b) an unbudgeted material expense incurred by or at the direction of the Board or a committee thereof,
(c) a material litigation judgment or settlement, (d) effects of mergers, acquisitions, divestitures, spin-offs, consolidation, acquisition of property or
stock, reorganizations, restructuring charges, or joint ventures, or (e) changes in applicable laws, regulations, or accounting principles.
Incentive Award: The award payout under the Program.
Incentive Target: The incentive opportunity expressed as a percent of the Participant’s base salary.
Participant: An employee who has met the eligibility criteria outlined in accordance with the Program.
Performance Period: The period of time for which performance goals are measured under this Program is generally January 1 through December 31.
Restatement: With respect to any payment under an Incentive Award, a material restatement of previously filed financial statements that is required to
be prepared and filed at any time during the three-year period following such payment due to material noncompliance of the Company with any
financial reporting requirements under the United States federal securities laws.
Bruker Corporation
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2022 Short-Term Incentive Compensation Program
Short-Term Incentive Compensation Program Addendum
This Addendum should be read alongside the provisions of the Short-Term Incentive Compensation Program (the “Program”). The purpose of the
Addendum is to amend the Program in accordance with the requirements of the governing law in the countries as set out below. The amendments for a
given specific country set forth below (and no other country) shall apply to and be part of the Program for Participants while employed by a Bruker
subsidiary in such country. Unless otherwise defined in this Addendum, the terms and conditions defined in the Program are incorporated by reference.
For avoidance of doubt, if a provision of the Program is not expressly amended below for a given country, that provision remains in full force and effect
in such country without amendment.
China
The following amendment shall be made to the Program if the Participant employed by a Bruker subsidiary in China.
The paragraph headed Governing Law shall be amended to read as follows (with the underlined wording showing the change made):
“This Program, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the Peoples Republic of China,
without reference to principles of conflict of laws which would require application of the law of another jurisdiction.”
France
The following amendment shall be made to the Program if the Participant employed by a Bruker subsidiary in France.
The paragraph headed Recoupment shall be amended to read as follows:
“Payments made to any Participant pursuant to an Incentive Award shall be subject to clawback: (1) to the extent of the excess of what would have been
paid to the Participant under a Restatement (as defined below) or (2) as otherwise required by any provision of any law, government rule or regulation,
or stock exchange listing requirement.”
Bruker Corporation
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2022 Short-Term Incentive Compensation Program
Germany
The following amendments shall be made to the Program if the Participant employed by a Bruker subsidiary in Germany.
1.
2.
3.
The first sentence of the paragraph headed Individual Goals shall be amended to read as follows (with the underlined wording showing
the changes made):
“All individual goals will be established by the Committee and communicated to the Participant at the beginning of the Performance
Period.”
The first sentence of the first paragraph under the heading Award Payments shall be amended to read as follows (with the underlined
wording showing the changes made):
“After the Performance Period has ended, the Committee shall determine the amount of each Participant’s Incentive Award, if any, based
on the achievement of the financial goals and individual goals over the Performance Period, market conditions and the Committee’s
exercise of reasonable discretion.”
The first sentence of the third paragraph under the heading Award Payments shall be deleted and the second sentence of the same
paragraph shall be amended to read as follows (with the underlined wording showing the changes made):
“To be eligible to receive any Incentive Award under the Program, the employee Participant must be considered in good standing as
determined by the Company in its sole and reasonable discretion and may not be on a performance improvement plan.”
4.
The fourth paragraph under the heading Award Payments shall be deleted and replaced with the following:
“Any Incentive Award for any employee whose employment terminates during the Performance Period or who otherwise ceases to be
eligible to participate in the Program after the beginning of the Performance Period shall be pro-rated based on the employee’s
termination date or the date on which the employee’s participation ceases otherwise.”
5.
The first sentence of the eighth paragraph under the heading Award Payments shall be deleted.
Bruker Corporation
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2022 Short-Term Incentive Compensation Program
Switzerland
The following amendments shall be made to the Program if the Participant employed by a Bruker subsidiary in Switzerland.
1.
The following sentence shall be inserted at the end of the paragraph under the heading Incentive Payment and Incentive Awards:
“In any case, the Committee is free to deviate at its own discretion upwards or downwards from the Incentive Target set in its final
determination of the Incentive Award.”
2.
The following sentences shall be inserted at the end of the second paragraph under the heading Award Payments:
“The Company may instruct subsidiaries to make the payment on behalf of the Company. The Company further has the right to pay the
Incentive Award in the local currency in which the employee is usually paid whereby the exchange rate shall be determined by the
Committee.”
3.
The third, fourth and fifth paragraphs under the heading Award Payments shall be amended to read as follows (with the underlined
wording showing the changes made):
“Participants must be active employees (i.e. neither terminated or under notice) on payroll in an eligible position on the payout date to
receive an Incentive Award; provided that Participants who transfer to an ineligible position after the beginning of the Performance
Period will remain eligible to receive a pro-rated Incentive Award based on the time the Participant worked in the eligible position during
the Performance Period. To be eligible to receive any Incentive Award under the Program, the Participant must be considered in good
standing as determined by the Committee in its sole discretion and may not be on a performance improvement plan.
If an employee is terminated involuntarily prior to the end of a Performance Period (whereby the issuance of the notice is decisive and not
the expiration of any notice period), the Committee may, in its sole discretion, determine whether to pay any portion of the Incentive
Award, taking into account such things as individual performance and length of time the employee performed in the designated role during
the Performance Period. In no event will any employee who resigns for any reason, or who is terminated for performance reasons or for
violation of Company policies prior to the date of the Incentive Award payout (whereby
Bruker Corporation
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2022 Short-Term Incentive Compensation Program
the issuance of the notice is decisive and not the expiration of any notice period) be eligible to receive any portion of an Incentive Award.
The possible indication of reasons for termination in a notice does not allow any conclusion to be drawn as to the reasons for termination
that are decisive for the Program.
The payment of Incentive Awards pursuant to the achievement of the individual goals is subject to the satisfaction of minimum
performance expectations, as determined in the sole discretion by the Committee. Such minimum performance expectations include,
without limitation, compliance by the Participant and the Participant’s organization with the Company’s Code of Conduct and other
policies.”
4.
The following sentence shall be inserted at the end of the paragraph under the heading Successors:
“The Participant shall not have any right under this Program against the subsidiary employing the Participant, but only against the
Company.”
Bruker Corporation
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2022 Short-Term Incentive Compensation Program
SUBSIDIARIES OF BRUKER CORPORATION
EXHIBIT 21.1
Jurisdiction of Incorporation
Name of Subsidiary
Acuity Spatial Genomics, Inc. (35)
Advanced Diagnostic Solutions (Pty) Ltd. (33)
Agapetus GmbH (25)
Alicona Imaging GmbH (26)
Anasys Instruments Corporation (9)
Biocetra AS (23)
Bruker Arabia Limited (25)
Bruker AXS Holdings, Inc.
Bruker AXS LLC (9)
Bruker AXS Ltd. (13)
Bruker AXS GmbH (4)
Bruker Austria GmbH (5)
Bruker Belgium S.A./N.V. (28)
Bruker BioSpin Corporation
Bruker BioSpin GmbH (17)
Bruker Japan K.K. (11)
Bruker BioSpin MRI GmbH (8)
Bruker Business Support Center sp. Z.o.o. (34)
Bruker Daltonics GmbH & Co., KG (19)
Bruker Daltonik GmbH (18)
Bruker Daltonics Ltd. (20)
Bruker do Brasil Ltda. (5)
Bruker Detection Corporation (20)
Bruker EAS GmbH (2)
Bruker Energy & Supercon Technologies, Inc.
Bruker Espanola S.A. (11)
Bruker Finance BV (20)
Bruker France S.A.S. (11)
Bruker Holdings BV (20)
Bruker India Scientific PVT, Ltd. (21)
Bruker Invest AG (10)
Bruker Italia S.r.l. (11)
Bruker JV UK Ltd. (15)
Bruker Korea Co. Ltd. (11)
Bruker Ltd. (11)
Bruker Ltd. (11)
Bruker Mexicana S.A. de C.V. (6)
Bruker Microbiology Technology (Beijing) Co., Ltd
Bruker Nano GmbH (5)
Bruker Nano, Inc. (29)
Bruker Nederland B.V. (11)
Bruker Nordic AB (20)
Bruker Optics GmbH & Co., KG (37)
Bruker Optics Verwaltungs GmbH (37)
Bruker Optik Holding GmbH (20)
Bruker OST LLC (1)
Bruker Physik GmbH (16)
Bruker Polska Sp. Z.o.o. (5)
Bruker Portugal Unipessoal LDA (11)
Bruker PTY Ltd. (11)
Delaware, U.S.A.
South Africa
Austria
Austria
California, U.S.A.
Norway
Saudi Arabia
Delaware, U.S.A.
Delaware, U.S.A.
United Kingdom
Germany
Austria
Belgium
Massachusetts, U.S.A.
Germany
Japan
Germany
Poland
Germany
Germany
United Kingdom
Brazil
Massachusetts, U.S.A.
Germany
Delaware, U.S.A.
Spain
Netherlands
France
Netherlands
India
Switzerland
Italy
United Kingdom
Korea
Canada
Russia
Mexico
China
Germany
Arizona, U.S.A.
Netherlands
Sweden
Germany
Germany
Germany
Delaware, U.S.A.
Germany
Poland
Portugal
Australia
Bruker Scientific Instruments Hong Kong Co., Ltd. (11)
Bruker Scientific Israel Ltd. (11)
Bruker Scientific LLC
Bruker (Beijing) Scientific Technology Co., Ltd. (12)
Bruker Switzerland AG (11)
Bruker (Malaysia) SDN. BHD. (11)
Bruker Singapore Pte. Ltd. (11)
Bruker South Africa (Pty) Ltd. (5)
Bruker s.r.o. (36)
Bruker Taiwan Co. Ltd. (20)
Bruker Technologies Ltd. (14)
Bruker Turkey Teknolojik Sistemler Ticaret Ltd. Sirketi (27)
Bruker UK Ltd. (11)
Bruker Verwaltungs GmbH (19)
Canopy Biosciences LLC (9)
Core Diagnostics Inc.(31)
Hain LifeScience E.A. Ltd. (23)
Hain LifeScience GmbH (36)
Hydrostatic Extrusions Ltd. (1)
InCoaTec GmbH (7)
InVivo Biotech Svx GmbH (36)
Lifescience Solutions Africa (Pty) Ltd.(23)
Luxendo GmbH (11)
Merlin Diagnostika GmbH (36)
Mestrelab Research S.L. (24)
Molecubes, NV (11)
PMOD Technologies LLC (25)
Precision Diagnostics, Inc. (30)
Research Instruments GmbH (3)
SAS Biocentric (23)
SmartTip BV (32)
Vutara LLC (9)
XGLabs S.r.l. (22)
Zellkraft Werk GmbH (30)
Hong Kong
Israel
Delaware, U.S.A.
China
Switzerland
Malaysia
Singapore
South Africa
Czech Republic
Taiwan
Israel
Turkey
United Kingdom
Germany
Delaware, U.S.A.
California, U.S.A.
Kenya
Germany
United Kingdom
Germany
Germany
South Africa
Germany
Germany
Spain
Netherlands
Switzerland
Delaware, U.S.A.
Germany
France
Netherlands
Delaware, U.S.A.
Italy
Germany
These entities are wholly owned subsidiaries of Bruker AXS GmbH.
InCoaTec GmbH is 66% owned by Bruker AXS GmbH and 34% owned by third parties.
These entities are wholly owned subsidiaries of Bruker Energy & Supercon Technologies, Inc.
These entities are wholly owned subsidiaries of Bruker HTS GmbH.
(1)
(2)
(3) Research Instruments GmbH is 52.49% owned by Bruker Energy & Supercon Technologies, Inc. and 47.51% owned by third parties.
(4) Bruker AXS GmbH is 90% owned by Bruker AXS Holdings, Inc. and 10% owned by Bruker Corporation.
(5)
(6) Bruker Mexicana S.A de C.V. is 99.9% owned by Bruker AXS GmbH and 0.1% owned by Bruker AXS LLC.
(7)
(8) Bruker BioSpin MRI GmbH 89.9% owned by Bruker Physik GmbH and 10.1% owned by Bruker Invest AG.
(9)
(10) Bruker Invest AG is 90% owned by Bruker BioSpin Corporation and 10% owned by Bruker Corporation.
(11) These entities are wholly owned subsidiaries of Bruker Invest AG.
(12) Bruker (Beijing) Scientific Technology Co., Ltd. is a wholly owned subsidiary of Bruker Singapore Pte. Ltd.
(13) Bruker AXS Ltd. is 50% owned by Bruker Invest AG and 50% owned by Bruker UK Ltd.
(14) Bruker Technologies Ltd. is a wholly owned subsidiary of Bruker Scientific Israel Ltd.
(15) Bruker JV UK Ltd. is a wholly owned subsidiary of Bruker UK Ltd.
These entities are wholly owned subsidiaries of Bruker Nano, Inc.
(16) Bruker-Physik GmbH is 50.5% owned by Bruker BioSpin Corporation, 24.75% owned by Bruker Daltonik GmbH and 24.75% owned by Bruker
Optik GmbH.
(17) Bruker BioSpin GmbH is owned wholly owned by Bruker-Physik GmbH.
(18) Bruker Daltonik GmbH is 90% owned by Bruker Scientific LLC and 10% owned by Bruker Corporation.
(19) These entities are wholly owned subsidiaries of Bruker Daltonik GmbH.
(20) These entities are wholly owned subsidiaries of Bruker Scientific LLC.
(21) Bruker India Scientific PVT, Ltd. is 73.59% owned by Bruker Invest AG, 6.53% owned by Bruker Daltonik GmbH and 19.88% owned by Bruker
AXS GmbH.
(22) XGLabs S.r.l. is a wholly owned subsidiary of Bruker Italia S.r.l.
(23) These entities are wholly owned by Hain LifeScience GmbH.
(24) This entity is 50.998% owned by Bruker Switzerland AG and 49.002% owned by third parties.
(25) This entity is wholly owned by Bruker Switzerland AG.
(26) These entities are wholly owned by Agapetus GmbH.
(27) This entity is owned 99.74% by Bruker Invest AG and 0.26% by Bruker Switzerland AG.
(28) This entity is 99.99% owned by Bruker Invest AG and 0.01% owned by Bruker Switzerland.
(29) This entity is wholly owned by Bruker AXS Holdings, Inc.
(30) Wholly owned by Canopy BioScience LLC.
(31) Wholly owned by Precision Diagnostics, Inc.
(32) Wholly owned by Bruker Nederland BV.
(33) 50% owned by Hain Lifescience GmbH and 50% owned by Bruker South Africa (Pty) Ltd.
(34) Wholly owned by Bruker Finance BV.
(35) This entity is 94% owned by Bruker Nano, Inc.
(36) These entities are wholly owned by Bruker Daltonics GmbH & Co., KG.
(37) These entities are wholly owned by Bruker Optik Holding GmbH.
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-211686, 333-167333, 333-150430,
333-137090, 333-107294, and 333-47836) of Bruker Corporation of our report dated February 28, 2022 relating to the financial statements and the
effectiveness of internal control over financial reporting, which appears in this Form 10-K.
EXHIBIT 23.1
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 28, 2022
EXHIBIT 31.1
I, Frank H. Laukien, certify that:
CERTIFICATION
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of Bruker Corporation;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a.
b.
c.
d.
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
b.
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: February 28, 2022
By: /s/ FRANK H. LAUKIEN, PH.D.
Frank H. Laukien, Ph.D.
President, Chief Executive Officer and Chairman
(Principal Executive Officer)
EXHIBIT 31.2
I,
1.
2.
3.
4.
Gerald N. Herman, certify that:
I have reviewed this annual report on Form 10-K of Bruker Corporation;
CERTIFICATION
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a.
b.
c.
d.
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
b.
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: February 28, 2022
By: /s/ GERALD N. HERMAN
Gerald N. Herman
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Bruker Corporation (the “Company”) on Form 10-K for the year ended December 31, 2021, as filed with
the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, Frank H. Laukien, President, Chief Executive
Officer and Chairman of the Board of Directors of the Company, and Gerald N. Herman, Executive Vice President and Chief Financial Officer of the
Company, certifies, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his
knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
EXHIBIT 32.1
Company.
Date: February 28, 2022
Date: February 28, 2022
By: /s/ FRANK H. LAUKIEN, PH.D.
Frank H. Laukien, Ph.D.
President, Chief Executive Officer and Chairman
(Principal Executive Officer)
By: /s/ GERALD N. HERMAN
Gerald N. Herman
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
Corporate &
Investor Information
Corporate Headquarters:
Bruker Corporation
40 Manning Road
Billerica, Massachusetts 01821
Common Stock Listing:
Common stock of Bruker
Corporation is traded on Nasdaq
under the symbol “BRKR”
Investor Relations & Corporate
Development:
Justin Ward
Investor.Relations@bruker.com
Secretary:
Brent Alldredge
Legal Counsel:
Morgan, Lewis & Bockius LLP
One Federal Street
Boston, Massachusetts 02110
Independent Registered Public
Accounting Firm:
PricewaterhouseCoopers LLP
101 Seaport Boulevard
Boston, MA 02210
Transfer Agent:
American Stock Transfer & Trust
Company
6201 15th Avenue,
Brooklyn, NY 11219
Executive Management
Board of Directors
Frank H. Laukien, Ph.D.
President &
Chief Executive Officer
Gerald N. Herman
Executive Vice President &
Chief Financial Officer
Mark R. Munch, Ph.D.
President of Bruker Nano Group
& Corporate Executive Vice
President
Juergen Srega
President, Bruker CALID Group
Falko Busse, Ph.D.
President, Bruker BioSpin Group
Burkhard Prause, Ph.D.
President, Bruker Energy &
Supercon Technologies (BEST)
Frank H. Laukien, Ph.D.
President, Chief Executive
Officer, Chairman,
Bruker Corporation
Bonnie H. Anderson
Co-Founder & Chairwoman,
Veracyte, Inc.
Cynthia M. Friend, Ph.D.
President & CEO, the Kavli
Foundation
Director of the Energy Frontier
Research Center for Sustainable
Catalysis, Harvard University
Marc A. Kastner, Ph.D.
Former Dean of MIT School
of Science
Adjunct Professor of Physics,
Stanford University Former
President of theScience
Philanthropy Alliance
William A. Linton, Ph.D.
Chairman &
Chief Executive Officer,
Promega Corporation
Philip Ma, Ph.D.
Founder &
Chief Executive Officer,
PrognomiQ Inc.
John Ornell
Former Chief Financial Officer,
Waters Corporation
Richard A. Packer
Primary Executive Officer,
Healthcare Business Unit,
Asahi Kasei Corporation
Adelene Q. Perkins
Chair & Chief Executive Officer,
Infinity Pharmaceuticals, Inc.
Hermann Requardt, Ph.D.
Former Chief Executive Officer,
Siemens Healthcare
Robert J. Rosenthal, Ph.D.
Chairman &
Former Chief Executive Officer
Taconic Biosciences, Inc.
Bruker Corporation
info@bruker.com
bruker.com