Quarterly Report (10-q)

Date : 08/09/2019 @ 7:28PM
Source : Edgar (US Regulatory)
Stock : Bruker Corporation (BRKR)
Quote : 50.39  0.44 (0.88%) @ 2:49PM

Quarterly Report (10-q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form  10-Q

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

For the quarterly period ended June 30, 2019

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

For the transition period from                  to

Commission File Number 000-30833

BRUKER CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

04-3110160

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

40 Manning Road , Billerica , MA 01821

(Address of principal executive offices) (Zip Code)

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

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

Title of each class

    

Trading Symbols(s)

    

Name of each exchange on which registered

Common Stock

BRKR

Nasdaq Global Select Market

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

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

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

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

Class

 

Outstanding at August 2, 2019

Common Stock, $0.01 par value per share

 

154,665,870 shares

BRUKER CORPORATION

Quarterly Report on Form 10-Q

For the Quarter Ended June 30, 2019

Index

Page

Part I

FINANCIAL INFORMATION

1

Item 1 :

Unaudited Condensed Consolidated Financial Statements

1

Unaudited Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018

1

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the three and six months ended June 30, 2019 and 2018

2

Unaudited Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Shareholders’ Equity for the three and six months ended June 30, 2019 and 2018

3

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018

5

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2 :

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

29

Item 3 :

Quantitative and Qualitative Disclosures About Market Risk

44

Item 4 :

Controls and Procedures

46

Part II

OTHER INFORMATION

46

Item 1 :

Legal Proceedings

46

Item 1A :

Risk Factors

46

Item 2 :

Unregistered Sales of Equity Securities and Use of Proceeds

47

Item 6 :

Exhibits

47

Signatures

48

PART I

FINANCIAL INFORMATION

ITEM 1.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)

June 30, 

    

December 31, 

    

2019

    

2018

ASSETS

Current assets:

Cash and cash equivalents

$

282.5

$

322.4

Short-term investments

6.3

Accounts receivable, net

 

348.0

 

357.2

Inventories

 

594.6

 

509.6

Other current assets

 

175.0

 

115.1

Total current assets

 

1,406.4

 

1,304.3

Property, plant and equipment, net

 

281.9

 

270.6

Goodwill

284.7

275.7

Operating lease assets

74.5

Intangibles, net and other long-term assets

302.2

278.0

Total assets

$

2,349.7

$

2,128.6

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt

$

0.3

$

18.5

Accounts payable

 

123.7

 

104.5

Customer advances

 

137.9

 

124.4

Other current liabilities

 

379.1

 

351.9

Total current liabilities

 

641.0

 

599.3

Long-term debt

 

493.9

 

322.6

Operating lease liabilities

55.4

Other long-term liabilities

 

267.3

 

279.0

Commitments and contingencies (Note 13)

Redeemable noncontrolling interest

22.0

22.6

Shareholders' equity:

Preferred stock, $0.01 par value 5,000,000 shares authorized, none issued or outstanding

 

 

Common stock, $0.01 par value 260,000,000 shares authorized, 172,984,419 and 172,634,220 shares issued and 154,661,991 and 156,609,340 shares outstanding at June 30, 2019 and December 31, 2018, respectively

 

1.7

 

1.7

Treasury stock, at cost, 18,322,428 and 16,024,880 shares at June 30, 2019 and December 31, 2018, respectively

 

(501.5)

 

(401.5)

Accumulated other comprehensive income

 

15.4

 

17.0

Other shareholders' equity

 

1,345.2

 

1,279.4

Total shareholders' equity attributable to Bruker Corporation

 

860.8

 

896.6

Noncontrolling interest in consolidated subsidiaries

 

9.3

 

8.5

Total shareholders' equity

 

870.1

 

905.1

Total liabilities and shareholders' equity

$

2,349.7

$

2,128.6

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

1

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

(in millions, except per share data)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2019

    

2018

    

2019

    

2018

Product revenue

$

411.7

$

368.1

$

794.7

$

720.3

Service revenue

 

78.5

 

73.5

 

155.9

 

151.2

Other revenue

 

 

2.1

 

1.0

 

3.9

Total revenue

 

490.2

 

443.7

 

951.6

 

875.4

Cost of product revenue

 

210.0

 

188.7

 

407.5

 

374.3

Cost of service revenue

 

49.8

 

49.1

 

98.9

 

95.6

Cost of other revenue

0.7

0.1

0.9

Total cost of revenue

 

259.8

 

238.5

 

506.5

 

470.8

Gross profit

 

230.4

 

205.2

 

445.1

 

404.6

Operating expenses:

Selling, general and administrative

 

124.5

 

110.6

 

244.6

 

220.9

Research and development

 

48.5

 

43.6

 

94.9

 

86.8

Other charges, net

 

3.9

 

2.2

 

10.2

 

10.0

Total operating expenses

 

176.9

 

156.4

 

349.7

 

317.7

Operating income

 

53.5

 

48.8

 

95.4

 

86.9

Interest and other income (expense), net

 

(5.9)

 

(5.5)

 

(9.4)

 

(7.8)

Income before income taxes and noncontrolling interest in consolidated subsidiaries

 

47.6

 

43.3

 

86.0

 

79.1

Income tax provision

 

10.6

 

11.8

 

18.3

 

20.2

Consolidated net income

 

37.0

 

31.5

 

67.7

 

58.9

Net income attributable to noncontrolling interests in consolidated subsidiaries

 

0.5

 

0.3

 

0.4

 

0.7

Net income attributable to Bruker Corporation

$

36.5

$

31.2

$

67.3

$

58.2

Net income per common share attributable to Bruker Corporation shareholders:

Basic

$

0.23

$

0.20

$

0.43

$

0.37

Diluted

$

0.23

$

0.20

$

0.43

$

0.37

Weighted average common shares outstanding:

Basic

 

156.1

 

156.1

 

156.4

 

156.0

Diluted

 

157.6

 

157.0

 

157.7

 

157.0

Comprehensive income (loss)

$

49.5

$

(5.4)

$

65.9

$

46.4

Less: Comprehensive income (loss) attributable to noncontrolling interests

 

0.9

 

(0.2)

 

0.8

 

0.4

Less: Comprehensive income (loss) attributable to redeemable noncontrolling interest

(0.6)

Comprehensive income (loss) attributable to Bruker Corporation

$

48.6

$

(5.2)

$

65.7

$

46.0

Dividend declared per common share

$

0.04

$

0.04

$

0.08

$

0.08

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

2

BRUKER CORPORATION

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

(in millions, except per share data)

    

    

    

    

    

    

    

    

Total

    

Shareholders'

Accumulated

Equity

Noncontrolling

Reedeemable

Treasury

Other

Attributable to

Interests in

Total

Noncontrolling

Common Stock

Treasury

Stock

Additional

Retained

Comprehensive

Bruker

Consolidated

Shareholders'

    

Interest

  

  

Common Shares

    

Amount

    

Shares

    

Amount

    

Paid-In Capital

    

Earnings

    

Income (Loss)

    

Corporation

    

Subsidiaries

    

Equity

Balance at December 31, 2018

 

$

22.6

156,609,340

$

1.7

 

16,024,880

$

(401.5)

$

176.9

$

1,102.5

$

17.0

$

896.6

$

8.5

$

905.1

Stock options exercised

 

167,177

 

 

 

 

3.1

 

 

 

3.1

 

 

3.1

Restricted stock units vested

 

35,072

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

2.7

 

 

 

2.7

 

 

2.7

Shares issued for acquisition

 

3,087

 

 

(3,087)

 

 

 

 

 

 

 

Cash dividends paid to common stockholders

 

 

 

 

 

 

(6.3)

 

 

(6.3)

 

 

(6.3)

Consolidated net income (loss)

 

(0.2)

 

 

 

 

 

30.8

 

 

30.8

 

0.1

 

30.9

Other comprehensive loss

 

(0.4)

 

 

 

 

 

 

(13.7)

 

(13.7)

 

(0.2)

 

(13.9)

Balance at March 31, 2019

 

$

22.0

156,814,676

$

1.7

 

16,021,793

$

(401.5)

$

182.7

$

1,127.0

$

3.3

$

913.2

$

8.4

$

921.6

Balance at March 31, 2019

 

$

22.0

156,814,676

$

1.7

 

16,021,793

$

(401.5)

$

182.7

$

1,127.0

$

3.3

$

913.2

$

8.4

$

921.6

Stock options exercised

 

145,606

 

 

 

 

2.7

 

 

 

2.7

 

 

2.7

Restricted stock units vested

 

2,344

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

2.6

 

 

 

2.6

 

 

2.6

Shares repurchased

 

(2,300,635)

 

 

2,300,635

 

(100.0)

 

 

 

 

(100.0)

 

 

(100.0)

Cash dividends paid to common stockholders

 

 

 

 

 

 

(6.3)

 

 

(6.3)

 

 

(6.3)

Consolidated net income

 

(0.3)

 

 

 

 

 

36.5

 

 

36.5

 

0.8

 

37.3

Other comprehensive income

 

0.3

 

 

 

 

 

 

12.1

 

12.1

 

0.1

 

12.2

Balance at June 30, 2019

 

$

22.0

154,661,991

$

1.7

 

18,322,428

$

(501.5)

$

188.0

$

1,157.2

$

15.4

$

860.8

$

9.3

$

870.1

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

3

BRUKER CORPORATION

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

(in millions, except per share data)

    

    

    

    

    

    

    

    

Total

    

Shareholders'

Accumulated

Equity

Noncontrolling

Reedeemable

Treasury

Other

Attributable to

Interests in

Total

Noncontrolling

Common Stock

Treasury

Stock

Additional

Retained

Comprehensive

Bruker

Consolidated

Shareholders'

    

Interest

  

  

Common Shares

    

Amount

    

Shares

    

Amount

    

Paid-In Capital

    

Earnings

    

Income (Loss)

    

Corporation

    

Subsidiaries

    

Equity

Balance at December 31, 2017

 

$

155,865,977

$

1.7

 

16,009,099

$

(401.2)

$

155.9

$

942.0

$

27.0

$

725.4

$

8.1

$

733.5

Restricted shares terminated

 

(6,553)

 

 

6,553

 

 

 

 

 

 

Stock options exercised

 

180,890

 

 

 

 

2.9

 

 

 

2.9

 

2.9

Restricted stock units vested

 

42,762

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

2.5

 

 

 

2.5

 

2.5

Shares issued for acquisition

 

(2,123)

 

 

2,123

 

(0.1)

 

 

 

 

(0.1)

 

(0.1)

Treasury stock acquired

 

(1,055)

 

 

1,055

 

 

 

 

 

 

Adoption impact from new revenue standard ASC 606

 

 

 

 

 

 

5.9

 

 

5.9

 

0.2

6.1

Cash dividends paid to common stockholders

 

 

 

 

 

 

(6.3)

 

 

(6.3)

 

(6.3)

Consolidated net income

 

 

 

 

 

 

27.0

 

 

27.0

 

0.4

27.4

Other comprehensive income

 

 

 

 

 

 

 

24.2

 

24.2

 

0.1

24.3

Balance at March 31, 2018

 

$

156,079,898

$

1.7

 

16,018,830

$

(401.3)

$

161.3

$

968.6

$

51.2

$

781.5

$

8.8

$

790.3

Balance at March 31, 2018

 

$

156,079,898

$

1.7

 

16,018,830

$

(401.3)

$

161.3

$

968.6

$

51.2

$

781.5

$

8.8

$

790.3

Stock options exercised

 

221,464

 

 

 

 

4.2

 

 

 

4.2

 

4.2

Restricted stock units vested

 

5,964

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

2.4

 

 

 

2.4

 

2.4

Treasury stock acquired

(1,384)

1,384

(0.1)

(0.1)

(0.1)

Cash dividends paid to common stockholders

 

 

 

 

 

 

(6.2)

 

 

(6.2)

 

(6.2)

Consolidated net income (loss)

 

 

 

 

 

 

31.2

 

 

31.2

 

0.3

31.5

Other comprehensive loss

 

 

 

 

 

 

 

(36.4)

 

(36.4)

 

(0.4)

(36.8)

Balance at June 30, 2018

 

$

156,305,942

$

1.7

 

16,020,214

$

(401.4)

$

167.9

$

993.6

$

14.8

$

776.6

$

8.7

$

785.3

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

4

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Six Months Ended June 30, 

    

2019

    

2018

Cash flows from operating activities:

Consolidated net income

$

67.7

$

58.9

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

Depreciation and amortization

 

38.4

 

32.4

Stock-based compensation expense

 

6.1

 

4.9

Deferred income taxes

 

(0.3)

 

(7.4)

Other non-cash expenses, net

 

6.1

 

24.8

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

Accounts receivable

 

10.6

 

36.6

Inventories

 

(69.8)

 

(44.8)

Accounts payable and accrued expenses

 

2.8

 

(13.6)

Income taxes payable, net

 

(19.2)

 

(15.7)

Deferred revenue

 

9.2

 

9.7

Customer advances

 

(0.9)

 

(0.3)

Other changes in operating assets and liabilities, net

 

(25.9)

 

(5.6)

Net cash provided by operating activities

 

24.8

 

79.9

Cash flows from investing activities:

Purchases of short-term investments

 

(6.4)

 

Maturities of short-term investments

117.0

Cash paid for acquisitions, net of cash acquired

(71.9)

(37.6)

Purchases of property, plant and equipment

 

(28.6)

 

(17.5)

Proceeds from sales of property, plant and equipment

 

0.3

 

0.1

Net cash (used in) provided by investing activities

 

(106.6)

 

62.0

Cash flows from financing activities:

Repayments of Note Purchase Agreement

(15.0)

Repayments of revolving lines of credit

(28.5)

(202.5)

Proceeds from revolving lines of credit

200.6

7.5

Repayment of other debt

(4.6)

(0.8)

Proceeds of other debt, net

0.5

Proceeds from issuance of common stock, net

5.8

7.0

Payment of contingent consideration

(4.6)

(2.3)

Repurchase of common stock

(100.0)

Payment of dividends

(12.6)

(12.5)

Net cash provided by (used in) financing activities

 

41.6

 

(203.6)

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

 

0.4

 

(4.7)

Net change in cash, cash equivalents and restricted cash

 

(39.8)

 

(66.4)

Cash, cash equivalents and restricted cash at beginning of period

 

326.3

 

328.9

Cash, cash equivalents and restricted cash at end of period

$

286.5

$

262.5

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

5

BRUKER CORPORATION

NOTES TO UNAUDITED CONDENSED 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 two reportable segments, Bruker Scientific Instruments (BSI) , which represented approximately 90.2% and 90.3% of the Company’s revenues during the three and six months ended June 30, 2019, respectively and 90.7% and 90.2% of the Company’s revenues during the three and six months ended June 30, 2018, respectively; and Bruker Energy & Supercon Technologies (BEST) , which represented the remainder of the Company’s revenues. Within BSI, the Company is organized into three operating segments: the Bruker BioSpin Group, the Bruker CALID Group and the Bruker Nano Group. For financial reporting purposes, the Bruker BioSpin Group, Bruker CALID Group and Bruker Nano Group operating segments are aggregated into the BSI reportable segment because each has similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments.

Bruker BioSpin — The Bruker BioSpin Group designs, manufactures and distributes enabling life science tools based on magnetic resonance technology. The majority of the Bruker BioSpin Group’s revenues are generated by academic and government research customers. Other customers include pharmaceutical and biotechnology companies and nonprofit laboratories, as well as chemical, food and beverage, clinical and other industrial companies.

Bruker CALID (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.

Bruker Nano — The Bruker Nano Group designs, manufactures and distributes advanced X-ray instruments; atomic force microscopy instrumentation; advanced fluorescence optical microscopy instruments; analytical tools for electron microscopes and X-ray metrology; defect-detection equipment for semiconductor process control; handheld, portable and mobile X-ray fluorescence spectrometry instruments; and spark optical emission spectroscopy systems. Customers of the Bruker Nano Group include academic institutions, governmental customers, nanotechnology companies, semiconductor companies, raw material manufacturers, industrial companies, biotechnology and pharmaceutical companies and other businesses involved in materials analysis.

The Company's BEST reportable segment develops and manufactures superconducting and non-superconducting materials and devices for use in renewable energy, energy infrastructure, healthcare and "big science" research. The segment focuses on metallic low temperature superconductors for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy research and other applications, as well as ceramic high temperature superconductors primarily for energy grid and magnet applications.

6

The unaudited condensed consolidated financial statements represent the consolidated accounts of the Company. All intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements as of June 30, 2019 and December 31, 2018, and for the three and six months ended June 30, 2019 and 2018, have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial information presented herein does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair statement have been included. The results for interim periods are not necessarily indicative of the results expected for any other interim period or the full year.

At June 30, 2019, the Company's significant accounting policies and estimates, which are detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, have not changed other than for lease accounting as detailed in Footnote 14.

2.    Revenue

The following table presents the Company’s revenues by Group and end customer geographical location (dollars in millions):

Three Months Ended

Six Months Ended

June 30,

June 30,

    

2019

    

2018

    

2019

    

2018

Revenue by Group:

 

 

Bruker BioSpin

 

$

150.9

$

139.9

 

$

278.7

$

271.7

Bruker CALID

 

140.5

128.0

 

288.7

259.3

Bruker Nano

 

151.0

134.5

 

291.8

258.4

BEST

 

51.9

42.7

 

99.7

88.3

Eliminations

 

(4.1)

(1.4)

 

(7.3)

(2.3)

Total revenue

$

490.2

$

443.7

$

951.6

$

875.4

Three Months Ended

Six Months Ended

June 30,

June 30,

    

2019

    

2018

    

2019

    

2018

Revenue by End Customer Geography:

 

  

 

  

United States

 

$

126.2

$

108.4

 

$

243.8

$

213.2

Germany

 

49.6

48.9

 

92.4

90.4

Rest of Europe

 

116.7

111.9

 

229.0

231.8

Asia Pacific

 

153.8

135.5

 

306.0

262.4

Other

 

43.9

39.0

 

80.4

77.6

Total revenue

$

490.2

$

443.7

$

951.6

$

875.4

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

Three Months  Ended

Six Months  Ended

June 30,

June 30,

    

2019

    

2018

    

2019

    

2018

Revenue recognized at a point in time

 

$

435.9

$

405.3

 

$

846.4

$

800.5

Revenue recognized over time

 

54.3

38.4

 

105.2

74.9

Total revenue

 

$

490.2

$

443.7

 

$

951.6

$

875.4

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 June 30, 2019, remaining performance

7

obligations were approximately $1,110.8 million. The Company expects to recognize revenue on approximately 83.1% of the remaining performance obligations over the next twelve months and the remaining performance obligations primarily within one to three years .

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue, customer deposits and billings in excess of revenue recognized (contract liabilities) on the Company’s unaudited condensed consolidated balance sheets.

Contract assets— Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. Billing often occurs subsequent to revenue recognition, resulting in contract assets. Contract assets are generally classified as other current assets in the unaudited condensed consolidated balance sheets. The balance of contract assets as of June 30, 2019 and December 31, 2018 was $37.2 million and $25.9 million, respectively. The increase in the contract asset balance during the six month period ended June 30, 2019 is primarily a result of foreign currency translation and contracts that have been recognized as revenue during the six month period ending June 30, 2019 for which billing cannot contractually occur as of June 30, 2019.

Contract liabilities— The Company often receives cash payments from customers in advance of the Company’s performance, resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the unaudited condensed consolidated balance sheet based on the timing of when revenue recognition is expected. As of June 30, 2019 and December 31, 2018, the contract liabilities were $310.0 million and $288.5 million, respectively. The increase in the contract liability balance during the six month period ended June 30, 2019 is primarily a result of new performance obligations entered into during the six month period. Approximately $137.0 million of the contract liability balance on December 31, 2018 was recognized as revenue during the six month period ended June 30, 2019.

3.    Acquisitions

The impact of all acquisitions, individually and collectively, on revenues, net income and total assets was not material. Pro forma financial information reflecting all acquisitions has not been presented because the impact, individually and collectively, on revenues, net income and total assets is not material. Amounts allocated to goodwill that are attributable to expected synergies are not expected to be deductible for tax purposes.

2019

On April 2, 2019, the Company acquired Rave LLC (“Rave”), a privately held company, for a purchase price of $52.2 million with the potential for additional consideration of up to $5.0 million based on revenue and gross margin achievements in 2019 and 2020. Rave develops and manufactures nanomachining and laser photomask repair equipment. Rave will be integrated into the Bruker Nano Group within the BSI reportable segment. The acquisition of

8

Rave was accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

Consideration Transferred:

 

  

Cash paid

    

$

55.8

Contingent consideration

 

4.4

Working capital adjustment

(3.6)

Total consideration transferred

$

56.6

Allocation of Consideration Transferred:

 

  

Inventories

$

22.5

Accounts receivable

 

2.2

Other current and non-current assets

 

0.8

Property, plant and equipment

 

2.1

Operating lease assets

 

1.0

Intangible assets:

 

Technology

 

17.9

Customer relationships

 

15.5

Trade name

 

1.5

Goodwill

 

7.0

Liabilities assumed

 

(13.9)

Total consideration allocated

$

56.6

The preliminary fair value allocation included contingent consideration in the amount of $4.4 million, which represented the estimated fair value of future payments to the former shareholders of Rave based on achieving revenue targets for the period ended April 30, 2020. The Company expects to complete the fair value allocation during 2020. The amortization period for all intangible assets acquired in connection with Rave is ten years .

In the six months ended June 30, 2019, the Company completed various other acquisitions that collectively complemented the Company's existing product offerings or added aftermarket and software capabilities to the Company's existing businesses.

The following table reflects the consideration transferred and the respective reporting segment for each of these acquisitions:

Name of Acquisition

    

Date Acquired

    

Segment

    

Consideration

    

Cash Consideration

Arxspan, LLC

March 4, 2019

 

BSI

$

16.6

$

14.4

Ampegon PPT GmbH

March 7, 2019

 

BEST

 

2.0

 

2.0

$

18.6

$

16.4

2018

On April 8, 2018, the Company acquired a 100 % interest in Anasys Instruments Corp. ("Anasys"), a privately held company, for a purchase price of $27.0 million with the potential for additional consideration of up to $9.6 million based on revenue achievements in 2019 and 2020. Anasys develops and manufactures nanoscale infrared spectroscopy and thermal measurement instruments. Anasys is located in Santa Barbara, California and was integrated into the Bruker

9

Nano Group within the BSI reportable segment. The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (in millions):

Consideration Transferred:

    

  

Cash paid

$

27.0

Contingent consideration

 

5.3

Total consideration transferred

$

32.3

Allocation of Consideration Transferred:

 

  

Inventories

$

2.8

Accounts receivable

0.8

Other current and non-current assets

 

1.1

Intangible assets:

 

  

Technology

 

7.3

Customer relationships

8.0

Backlog

1.8

Trade name

 

0.6

Goodwill

 

16.6

Deferred taxes, net

 

(3.2)

Liabilities assumed

 

(3.5)

Total consideration allocated

$

32.3

The preliminary fair value allocation included contingent consideration in the amount of $5.3 million, which represented the estimated fair value of future payments to the former shareholders of Anasys based on Anasys achieving annual revenue targets for the years 2019 and 2020. The Company completed the fair value allocation in the fourth quarter of 2018. The amortization period for all intangible assets acquired in connection with Anasys is eight years , except for backlog which was amortized over one year .

4.    Stock-Based Compensation

On May 14, 2010, the Bruker Corporation 2010 Incentive Compensation Plan (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 (Compensation Committee) to grant incentive stock options, non-qualified stock options and restricted stock awards. The Compensation Committee had the authority to determine which employees would receive the awards, the amount of the awards and other terms and conditions of any awards. Awards granted under the 2010 Plan typically were made subject to a vesting period of three to five years .

On May 20, 2016, the Bruker Corporation 2016 Incentive Compensation Plan (2016 Plan) was approved by the Company's stockholders. With the approval of the 2016 Plan, no further grants have been 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. Awards granted under the 2016 Plan typically vest over a period of one to four years .

10

The Company recorded stock-based compensation expense as follows in the unaudited condensed consolidated statements of income and comprehensive income (dollars in millions):