What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2023-03-01 compared with 2022-02-28 · 159 added, 204 removed, 262 unchanged (58% of the section changed)

MARKET FOR REGISTRANT

S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER 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, 2023, there were approximately 75 holders of record of our common stock.

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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.

Beginning in 2022, we increased the quarterly cash dividend to our shareholders in the amount of $0.05 per share of our issued and outstanding common stock and in February 2023 announced that our Board had approved a quarterly dividend for the first quarter of 2023 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, 2017, 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.

The graph plots the value of the initial $100 investment at one-year intervals for the fiscal years shown.

Cumulative Total Return Index for:

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Nasdaq US Benchmark TR Index

Nasdaq Stock Market (US companies)

SIC Code 3826 Laboratory Analytical Instruments

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.

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, 2022 of shares of our common stock.

Total Number of

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or Programs (2)

October 1—October 31, 2021

November 1—November 30, 2021

December 1—December 31, 2021

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”).

October 1—October 31, 2022

November 1—November 30, 2022

December 1—December 31, 2022

(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.

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.

(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 22, 2023, $94.4 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.

In May 2019, the Company’s Board of Directors approved a share repurchase program (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.

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Any future purchases will be funded from cash on hand, future cash flows from operations and available borrowings under our revolving credit facility.

S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 6 RESERVED

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.

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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:

This section provides appropriate disclosures regarding forward looking statements and our use of Non-GAAP

financial measures.

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.

Non-GAAP Measures.

This section provides appropriate disclosures regarding forward looking statements and our use of Non-GAAP financial measures.

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.

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This section provides a summary of recent accounting pronouncements and discusses their potential impact on our consolidated financial statements.

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.

Non-GAAP Measures

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.

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.

We define free cash flow as net cash provided by operating activities less additions to property, plant, and equipment.

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.

We define free cash flow as GAAP 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.

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.

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.

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.

We maintain major technical and manufacturing centers in Europe, Asia and North America and we have commercial offices located throughout the world.

Bruker is organized into four reportable segments:

the BSI BioSpin Segment, the BSI CALID Segment, the BSI Nano Segment and the Bruker Energy & Supercon Technologies (BEST) Segment.

Revenue for the year ended December 31, 2022 increased by $112.8 million, or 4.7%, to $2,530.7 million, compared to $2,417.9 million for the comparable period in 2021.

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.

Included in revenue was a decrease of approximately $168.0 million from unfavorable foreign exchange rate movements, partially offset by an increase of $34.3 million from acquisitions.

Excluding the unfavorable effects of foreign exchange rate movements and our recent acquisitions, our organic revenue, a non-GAAP measure, increased $246.5 million, or 10.2%.

Revenue increases were driven by strong demand for our differentiated high-value scientific instruments and life science solutions in addition to pricing benefits compared to the same period in 2021.

Our gross profit margin increased to 51.6% for the year ended December 31, 2022 as compared to 50.0% in the same period in 2021, the result of favorable mix, pricing, volume leverage and net favorable impact of foreign exchange rate movements, partially offset by increased costs in 2022 due to supply chain and logistics inefficiencies and inflation compared to 2021.

The income tax provision for the years ended December 31, 2022 and December 31, 2021 was $116.4 million and $113.0 million, respectively, representing effective tax rates of 28.1% and 28.7%, 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.

The decrease in our effective tax rate was primarily due to the impact of tax planning initiatives partially offset by the resolution of tax controversies.

Diluted earnings per share for the year ended December 31, 2022 was $1.99, an increase of $0.18, compared to $1.81 per share in the same period in 2021.

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 increase in diluted earnings per share was primarily driven by higher net income and reduced diluted outstanding shares resulting from our share repurchase activity during the year.

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):

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Free cash flow

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):

For the year ended December 31, 2022, our free cash flow was $45.2 million lower than the same period in 2021, primarily from an increase in net income offset by an increase in working capital due to increased inventory build for 2022 orders and supply chain management as well as increased capital expenditures.

The BEST reportable segment acquired the land and building previously being leased at its Hanau, Germany location in June 2022 for a total purchase price, inclusive of closing costs, of Euro 34.2 million ($33.8 million).

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):

Year Ended December 31,

Non-GAAP adjustments:

Restructuring costs

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Purchased intangible amortization

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

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):

Non-GAAP gross profit

Our non-GAAP gross profit margin was 52.6% and 51.1% in the years ended December 31, 2022 and 2021, respectively.

The increases in our non-GAAP gross profit margins were driven by favorable mix, pricing, volume leverage and net favorable impact of foreign exchange rate movements, partially offset by supply chain and logistics challenges compared to 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):

Year Ended December 31,

Operating income

Non-GAAP adjustments:

Restructuring costs

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Purchased intangible amortization

operating income

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

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;

Non-GAAP operating income

Our non-GAAP operating margin was 20.0% and 19.4% for the years ended December 31, 2022 and 2021, respectively.

The increase in our non-GAAP operating margins in 2022 was due to the gross margin expansion, partially offset by increased investments in our research and development capabilities, as compared to 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, inflation, the threat of recession, financial liquidity, currency volatility or devaluation and geopolitical tensions on our customers, supply chain or manufacturing capabilities;

potential energy shortages in Europe where we have significant operations and overall higher energy and transportation costs;

the impact of certain weather-related disruptions;

the timing of governmental stimulus programs and academic research budgets;

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foreign currency exchange rates;

changes in raw material, component and logistics costs;

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;

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;

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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.

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:

our ability to identify suitable acquisition targets and successfully integrate and manage acquired business;

costs related to acquisitions of technology or businesses.

Several of these factors have in the past affected and may continue to affect 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.

Throughout the COVID-19 pandemic, we have been focused on and continue to focus on three 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.

and delivering our 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.

Although we expect that COVID-19 vaccinations and boosters broadly distributed and administered will continue to improve conditions, the COVID-19 pandemic has had and if conditions deteriorate again, could continue to have an adverse effect on the United States and global economies, as well as on aspects of our operations and those of third parties on whom we rely.

In response to the COVID-19 pandemic, we have implemented strict social distancing, enhanced cleaning protocols and other preventative measures

in our major facilities to ensure the health and safety of our valued employees, customers and partners - and we may take further actions, or be required to take further actions, that are in the best interests of our employees, customers and partners.

While many of our office colleagues worked remotely at the height of the pandemic and through subsequent surges, we placed enhanced focus on the safety of our service organization and factory employees for whom work from home was not feasible.

Where customer sites were accessible and open, our field service organizations operated under social distancing protocols with proper face coverings to ensure the safety of customer sites, when our employees needed to be on site.

Consistent with local government and health organization guidelines, many of our facilities have started a gradual return to the office for employees who have been working remotely.

Although we are adhering with applicable government and health organization guidelines, an outbreak of COVID-19 at one or more of our facilities could cause a facility shutdown and a reduction in our workforce.

As we continue to monitor developments and make appropriate adjustments, as needed, employee and visitor health and safety will remain our paramount concern.

Maintaining business continuity and service levels for our customers

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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.

However, with any resurgence of the virus or the emergence of additional variants and subvariants, particularly those that are 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

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

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.

We continue to encounter supply chain risks associated with the pandemic, the global economy, including inflation, the threat of recession, financial liquidity, currency volatility or devaluation and geopolitical tensions, and the worldwide shortage of semiconductor chips, components and raw materials, such as copper.

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.

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.

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.

A discussion regarding our results of operations for the fiscal year ended December 31, 2021 compared to 2020 can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 28, 2022, 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”

Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021

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Total cost of revenue

Year Ended December 31,

Operating expenses:

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Interest and other income (expense), net

Income before income taxes and noncontrolling interest in consolidated subsidiaries

Income before income taxes, equity in income of unconsolidated

investees, net of tax, and noncontrolling interests in

consolidated subsidiaries

Income tax provision

Equity in income of unconsolidated investees, net of tax

Consolidated net income

Net income attributable to noncontrolling interests in consolidated subsidiaries

Net income attributable to noncontrolling interests in

consolidated subsidiaries

Net income attributable to Bruker Corporation

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.

The increase in gross profit was a result of higher revenue, volume leverage and favorable product mix.

Revenue increases were driven by strong demand for our differentiated instruments and solutions as well as pricing improvements offset by the negative impact of foreign currency translation.

The BSI BioSpin Segment revenue for the year ended December 31, 2022 was $696.7 million, an increase of 0.8% compared to the same period in 2021.

The increase was driven by strong growth in the biopharma market.

The BSI CALID Segment revenue for the year ended December 31, 2022 was $822.2 million, a slight increase of 0.3% compared to the same period in 2021.

The increase in revenues was a direct result of strong demand for our differentiated instruments, partially offset by supply chain constraints and the negative impact of foreign currency translation.

The BSI Nano Segment revenue for the year ended December 31, 2022 was $787.0 million, an increase of 12.8% compared to the same period in 2021, driven by strong demand in its industrial and semiconductor metrology markets.

The BEST revenue for the year ended December 31, 2022 was $237.1 million, an increase of 5.9% compared to the same period in 2021, driven by strong superconductor demand from major medical magnetic resonance imaging manufacturers.

Geographically for the year ended December 31, 2022, our North America revenue grew 16.9%, Asia Pacific increased by 10.4%, while European revenue declined by 8.8% compared to the same period in 2021.

The increase in gross profit was a result of favorable mix, volume leverage and price realization, partially offset by the net unfavorable impact of foreign exchange rate movements and by supply chain, logistics, inefficiencies and inflationary challenges compared to 2021.

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.

Our selling, general and administrative expenses for the year ended December 31, 2022 increased to 24.0% of total revenue from 23.2% of total revenue for the comparable period in 2021.

The increase as a percentage of revenue was a result of investments in our commercial infrastructure related to Project Accelerate 2.0 initiatives and driven by higher freight, logistics and commission costs.

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.

Our research and development expenses for the year ended December 31, 2022 increased to 9.3% of total revenue from 9.1% of total revenue for the comparable period in 2021.

The consistent percentage relates to higher overall revenues in addition to our increased investment in research and development capabilities period over period related to Project Accelerate 2.0 initiatives.

Other Charges, Net

Other charges, net for the year ended December 31, 2022 consisted primarily of $19.3 million of acquisition-related charges related to acquisitions completed in 2022 and 2021, $3.9 million of restructuring costs related to closing facilities and implementing outsourcing and other restructuring initiatives, $3.0 million of costs associated with our global IT transformation activities, $2.4 million related to professional fees and $0.3 million related to long-lived asset impairments.

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.

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.

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.

The increase in operating income was due to higher gross profit resulting from favorable mix, volume leverage, price realization and net favorable impact of foreign exchange rate movements offset by planned sales and marketing investments, supply chain and logistics challenges and inflationary margin challenges in 2022, as compared to 2021, and investments in research and development capabilities.

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.

The modest decline in interest and other income (expense), net in the year ended December 31, 2022, as compared to the same period in 2021 was primarily due to lower foreign currency exchange losses driven by the strengthening of the U.S.

Dollars against other currencies as well as fair value gains from strategic investments.

Income Tax Provision

The effective tax rates for years ended 2022 and 2021 were 28.1% and 28.7%, 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.

The decrease in our effective tax rate for the year ended December 31, 2022, compared to 2021, was primarily due to the impact of tax planning initiatives partially offset by the resolution of tax controversies.

Equity in Income of Unconsolidated Investees, net of tax

Equity in income of unconsolidated investees, net of tax represents the Company's proportionate share of the earnings or losses as reported by equity-method investees.

Net Income Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests

The net income attributable to noncontrolling interests represented the minority shareholders’

proportionate share of the net income recorded by our majority-owned subsidiaries.

Net Income Attributable to Bruker Corporation

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The following table presents revenue, change in revenue, and revenue growth by reportable segment for the years ended December 31, 2022 and 2021 (dollars in millions):

Dollar Change

BSI Life Science

Eliminations (a)

Represents product and service revenue between reportable segments.

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

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.

(a) Represents product and service revenue between reportable segments.

The increase in revenue for the BSI BioSpin segment was due to strong growth in its service and support revenues, as well as strong growth in pre-clinical imaging and notable contribution from our biopharma process analytical technology, offset by unfavorable currency impact.

BSI CALID segment revenue increased with continued growth in the life science mass spectrometry business and notable strength in proteomics applications and the timsTOF portfolio offset by unfavorable currency impact.

The increase in revenue for the BSI Nano Segment was driven by strong demand in industrial markets and semiconductor customers.

The increase in revenue for the BEST Segment resulted from strong superconductor demand by our magnetic resonance imaging original equipment manufacturer customers.

Operating Income

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Percentage of

BSI Life Science

Corporate, eliminations and other (a)

Total operating income

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.

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

The operating margin increases in the BSI BioSpin, BSI CALID and BSI Nano Segments was primarily due to higher gross margin resulting from differentiated products and operating leverage, partially offset by costs of commercial investments.

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.

We anticipate that our existing cash 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.

Historically, we have financed our growth and liquidity needs through cash flow generation from operations and a combination of debt financing and the issuance 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, 2022 and 2021 totaled $645.5 million and $1,168.2 million, respectively, of which $593.8 million and $646.9 million, respectively, related to cash, cash equivalents and short-term investments is held outside of the United States in our foreign subsidiaries, most significantly in the Netherlands, Switzerland, China and Japan.

The following table presents our cash flows from operating activities, investing activities and financing activities for the periods presented (in millions):

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Net cash used in investing activities

Net cash provided by (used in) financing activities

Effect of exchange rates on cash and cash equivalents and restricted cash

Total increase in cash and cash equivalents and restricted cash

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.

Net cash (used in) provided by financing activities

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

Net change in cash, cash equivalents and restricted cash

Cash provided by operating activities during the year ended December 31, 2022 resulted from consolidated net income adjusted for non-cash items of $418.5 million, partially offset by a change in operating assets and liabilities, net of acquisitions and divestitures of $144.1 million.

The decrease was primarily due to inventory build to stock up and handle the supply chain challenges, timing of tax payments partially offset by customer advances received during the period related to new orders and deferral of revenue due to supply chain challenges.

During the year ended December 31, 2021, net cash provided by operating activities 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.

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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.

Cash used in investing activities during the year ended December 31, 2022 resulted primarily from the acquisitions of $182.3 million, purchases of property, plant and equipment of $129.2 million, and strategic investments of $60.2 million, partially offset by maturity of short-term investments of $100.0 million and $13.9 million of net proceeds from sales of property, plant and equipment.

Cash used in investing activities during the year ended December 31, 2021 was 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.

We currently expect capital expenditures in 2023 to be approximately $130.0 million.

Net cash used in financing activities during the year ended December 31, 2022 was primarily attributable to cash payments made for shares of common stock under our repurchase program of $263.1 million, repayment of our 2012 Note Purchase Agreement of $105.0 million and $29.8 million for the payment of dividends.

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

at prices, and at such times as management deems appropriate, subject to market conditions, legal requirements and other considerations.

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, 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.

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.

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 4,215,094 shares at an aggregate cost of $264.7 million during the year ended December 31, 2022.

We purchased a total of 1,537,217 shares at an aggregate cost of $118.9 million during the year ended December 31, 2021.

As of February 22, 2023, $94.4 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.

At December 31, 2022 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.

We continue to be indefinitely reinvested in the amount of $851 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.

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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

Dollar notes under the 2019 Term Loan

EUR notes (in U.S.

Dollars) under the 2021 Note Purchase Agreement

CHF notes (in U.S.

Dollars) under the 2021 Note Purchase Agreement

CHF notes (in U.S.

Dollars) under the 2019 Note Purchase Agreement

Dollar notes under the 2019 Term Loan Agreement

Dollar notes under the 2012 Note Purchase Agreement

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Finance lease obligations

Current portion of long-term debt

Current portion of long-term debt and finance lease obligations

Total long-term debt, less current portion

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Annual maturities of notes and loans outstanding are as follows (in millions):

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.

As of December 31, 2022, 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, 2022 (dollars in millions):

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Revenue recognition

We recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers

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

1) identifying a contract with the customer;

2) identifying the performance obligations in the contract;

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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.

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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.

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.

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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.

Transfer of control generally occurs upon shipment, or for certain systems, based upon customer acceptance for a system once 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.

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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

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.

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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.

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.

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.

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All inventories are stated at the lower of cost and net realizable value.

Cost is determined principally by the first-in,

method for a majority of subsidiaries and by average-cost for certain other subsidiaries.

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.

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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

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.

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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.

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.

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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

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.

Estimating the fair value of the reporting units requires significant judgment by management.

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.

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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

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity