What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2021-03-01 compared with 2020-03-27 · 278 added, 274 removed, 216 unchanged (72% of the section changed)

3 unchanged sentences

In addition to those risk factors discussed elsewhere in this report, we identify the following risk factors, which could affect our actual results and cause actual results to differ materially from those in the forward-looking statements.

Our financial condition and results of operations for fiscal 2020 will be adversely affected by the recent novel coronavirus disease- 2019, or COVID-19, outbreak.

Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those described in Item 1A “Risk Factors.” These risks include, but are not limited to, the following:

● Our financial condition and results of operations for fiscal 2021 will be adversely affected by the ongoing COVID-19 pandemic;

● Unfavorable economic or political conditions in the countries in which we operate may have an adverse impact on our business results or financial condition;

● We derive a significant portion of our revenue from international sales and are subject to the operational risks of doing business in foreign countries;

● If our products fail to achieve and sustain sufficient market acceptance across their broad intended range of applications, we will not generate expected revenue;

● Our products compete in markets that are subject to rapid technological change, and one or more of the technologies underlying our products could be made obsolete by new technology;

● If investment in life and material science research spending declines, our ability to generate revenue may suffer;

● Any reduction in the capital resources or government funding of our customers could reduce our sales and impede our ability to generate revenue;

● Disruptions at any of our manufacturing facilities could adversely affect our business;

● In addition to the risks applicable to our life science and materials analysis products, our CBRNE detection products are subject to a number of additional risks, including lengthy product development and contract negotiation periods and certain risks inherent in long-term government contracts;

● Our debt may adversely affect our cash flow and may restrict our investment opportunities or limit our activities;

● If we lose our strategic partners, our marketing and sales efforts could be impaired;

● We face risks related to sales through distributors and other third parties that we do not control, which could harm our business;

● Our operations are dependent upon a limited number of suppliers and contract manufacturers;

● Supply shortages and increasing prices of raw materials could adversely affect the gross profit of the Bruker BioSpin Group and the BEST Segment;

● If we are unable to effectively protect our intellectual property, third parties may use our technology, which would impair our ability to compete in our markets;

● We may be involved in lawsuits to protect or enforce our patents that are brought by us which could be expensive and time consuming and, if determined adversely, could adversely affect our patent position;

● Our manufacture and sale of products could lead to product liability claims for which we could have substantial liability;

● Responding to claims relating to improper handling, storage or disposal of hazardous chemicals and radioactive and biological materials which we use could be time consuming and costly;

● We operate as an entrepreneurial, decentralized company, which presents both benefits and certain risks.

In particular, significant growth in a decentralized operating model may put strain on certain business group resources and our corporate functions, which could materially and adversely affect our business, financial condition and results of operations.

Risks Related to Our Business and Industry

Our financial condition and results of operations for fiscal 2021 may continue to be adversely affected by the ongoing novel coronavirus disease- 2019, or COVID-19, pandemic.

In December 2019, a novel strain of coronavirus, now referred to as COVID-19, surfaced in Wuhan, China.

The virus continues to spread globally, has been declared a pandemic by the World Health Organization and has spread to over 100 countries, including the United States.

The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

In March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization.

The virus has spread globally.

The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in disruptions to the global economy, as well as businesses and capital markets around the world.

Impacts to our business include temporary closures of many of our government and university customers and our suppliers, disruptions or restrictions on our employees’ and customers’ ability to travel, and delays in product installations or shipments to and from affected countries.

In an effort to halt the outbreak of COVID-19, a number of countries, including the United States, have placed significant restrictions on travel and many businesses have announced extended closures.

For example, a number of states, including California, Massachusetts and New Jersey where we have significant operations, have issued shelter in place or stay-at-home orders which required our employees in that area to work from home and avoid unnecessary travel.

In addition, a number of our production facilities have either temporarily closed, plan to temporarily close or are operating on a reduced capacity.

Most commercial activity in sales and marketing, and customer demonstrations and applications training, are either being conducted remotely or postponed.

Customer purchasing departments are operating at reduced capacity, and many customers could delay or cut capital expenditures and operating budgets.

These travel restrictions, business closures and operating reductions at Bruker, our customers, our distributors, and or our suppliers will adversely impact our operations locally and worldwide, including our ability to manufacture, sell or distribute our products, as well as cause temporary closures of our foreign distributors, or the facilities of suppliers or customers.

This disruption of our employees, distributors, suppliers or customers will impact our global sales and operating results.

We are continuing to monitor and assess the effects of the COVID-19 pandemic on our commercial operations, including any potential impact on our revenue in 2020.

However, we cannot at this time accurately predict what effects these conditions will ultimately have on our operations due to uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of the travel restrictions and business closures imposed by the governments of impacted countries.

In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that

could adversely affect the economies and financial markets of many countries, resulting in an economic downturn or a global recession that could affect demand for our products and likely impact our operating results.

In an effort to halt the outbreak of COVID-19, a number of countries, including the United States, have implemented and continue to implement significant restrictions on travel, shelter in place or stay at home orders, business closures and occupancy limitations.

Certain jurisdictions, including many within the United States, have also begun implementing policies with the goal of re-opening these markets only to return to restrictions in the face of increases in new COVID-19 cases or new strains of the virus.

For example, a number of states, including California, Massachusetts and New Jersey where we have significant operations, issued shelter in place or stay-at-home orders during the first half of 2020.

Although these states have begun implementing phased re-opening policies, many of our employees in these areas continue to work remotely and any re-openings may be delayed or pulled back if the virus continues to spread or if cases increase as a result of children returning to school.

We have experienced decreased work efficiency and productivity as a result of the increased number of our employees working from home.

In addition, with this remote working model where employees are increasingly accessing our systems through VPN or remote internet connections, we may be subject to increased security risks, including the risks of cyberattacks or data breaches.

Additionally, if any of our key leaders contract the virus and are unable to perform their duties for a period of time as the result of illness, our business, results of operations or financial condition could be adversely affected.

In addition, in 2020, a number of our production facilities had to either temporarily close or operate on a reduced capacity.

Most commercial activities in sales and marketing, and customer demonstrations and

applications training, are either being conducted remotely or postponed.

Customer purchasing departments are operating at reduced capacity, and many customers have delayed or cut capital expenditures and operating budgets.

Even where customers have re-opened their sites, they may not be operating at pre-pandemic productivity levels in an effort to accommodate safety protocols.

Any resurgence of the virus or the emergence of new strains of the virus may require us and our customers to close or partially close operations once again.

These travel restrictions, business closures and operating reductions at Bruker, our customers, our distributors, and/or our suppliers have adversely impacted and will likely continue to adversely impact our operations worldwide, including our ability to manufacture, sell or distribute our products, as well as cause temporary closures of our foreign distributors, or the facilities of suppliers or customers.

These disruptions of our employees, distributors, suppliers or customers have impacted and will likely continue to impact our global sales and operating results.

During 2020, our revenue declined 4.1% compared to 2019, primarily due to COVID-19 related disruptions.

We continue to monitor and assess the effects of the COVID-19 pandemic on our commercial operations, including its continued impact on our revenue and operations in 2021 and beyond.

However, we cannot at this time accurately predict what effects these conditions will ultimately have on our operations due to continued uncertainties relating to the length or the severity of the disease, the duration of the outbreak, and the length or severity of the travel restrictions, business closures, and other safety and precautionary measures imposed by the governments of impacted countries or the effectiveness of any COVID-19 vaccines.

Unfavorable economic or political conditions in the countries in which we operate may have an adverse impact on our business results or financial condition.

2 unchanged sentences

Our revenue from U.S.

operations represented approximately 26% of total consolidated revenue for both fiscal 2019 and 2018.

operations represented approximately 23% and 26% of total consolidated revenue for fiscal 2020 and 2019, respectively.

Our revenue from operations in Europe represented approximately 38% and 35% of total consolidated revenue for the fiscal years 2020 and 2019, respectively.

Our revenue from operations in the Asia Pacific region represented approximately 32% and 31% of total consolidated revenue in each of the corresponding periods.

Economic factors that could adversely influence demand for our products include uncertainty about global economic conditions leading to reduced levels of investment, changes in government spending levels and/or priorities, the size and availability of government budgets, customers’ and suppliers’ access to credit and other macroeconomic factors affecting government, academic or industrial spending behavior.

Economic factors that could adversely influence demand for our products include continued uncertainty about global economic conditions, including as a result of the pandemic, leading to ongoing reductions in investment, changes in government spending levels and/or priorities, the size and availability of government budgets, customers’ and suppliers’ access to credit and other macroeconomic factors affecting government, academic or industrial spending behavior.

Slower economic growth or a deterioration in economic conditions could result in a decrease in government funding for scientific research, a delay in orders from current or potential customers or a reduction in purchases of our products.

3 unchanged sentences

Our revenue from non-U.S.

operations represented approximately 74% of our total consolidated revenue for both fiscal 2019 and 2018.

Our international operations are, and will continue to be, subject to a variety of risks associated with conducting business internationally, many of which are beyond our control.

operations represented approximately 77% and 74% of our total consolidated revenue for fiscal 2020 and 2019, respectively.

Our international operations are, and will continue to be, subject to a variety of risks associated with conducting business internationally, many of which are beyond

These risks, which may adversely affect our ability to achieve and maintain profitability and our ability to sell our products internationally, include:

3 unchanged sentences

● the imposition of government controls;

● political and economic instability, including the impact of the COVID-19 coronavirus, the possibility of an economic recession in certain key markets such as Germany, international hostilities, acts of terrorism and governmental restrictions, inflation, trade relationships and military and political alliances;

● political and economic instability, including the impact of COVID-19, the possibility of an economic recession in certain key markets such as Germany, international hostilities, acts of terrorism and governmental restrictions, inflation, trade relationships and military and political alliances;

● costs and risks of deploying systems in foreign countries;

8 unchanged sentences

In addition, China has imposed tariffs on a wide range of American products in retaliation for these new American tariffs.

There is a concern that the imposition of additional tariffs by the United States, could result in the adoption of additional tariffs by China and other countries as well.

As a result, there is a concern that the imposition of additional tariffs by the United States, could result in the adoption of additional tariffs by China and other countries as well.

Any resulting trade war could negatively impact the global market for scientific instruments and could have a significant adverse effect on our business.

1 unchanged sentence

Conversely, China imposing tariffs on items that we export to China, could adversely impact our customers’ ability to purchase our products and our competitive position in China or increase our costs, which could have a material adverse effect on our business and results of operations.

We must also comply with the European Union General Data Protection Regulation (GDPR) which was effective as of May 2018.

We must also comply with the European Union General Data Protection Regulation (GDPR) and other similar regulations in other countries.

The goal of the regulation is to increase individual rights and protections for personal data located in or originating from the European Union.

1 unchanged sentence

There are significant fines associated with non-compliance.

In 2020, the Court of Justice of the European Union invalidated the EU-US Privacy Shield Framework, removed a key mechanism for transfers of personal data from the European Union to the United States and altered the international data transfer under GDPR.

The decision has caused uncertainty for multinational companies about how they can properly transfer personal data from the EU to the US and the cost and effort to comply with such decision could cause disruption of data transfers and have a material adverse effect on our business.

While the impact of these factors is difficult to predict, any one or more of these factors could adversely affect our operations in the future.

A prolonged downturn in global economic conditions may materially adversely affect our business.

Our business and results of operations are affected by international, national and regional economic conditions.

Financial markets in the United States, Europe and Asia have been experiencing extreme disruption in recent months, including, among other things, extreme volatility in security prices.

We are unable to predict the likely duration and severity of the current disruptions in financial markets and adverse economic conditions throughout the world.

These economic developments affect businesses such as ours and those of our customers in a number of ways that could result in unfavorable consequences to us.

Current economic conditions or a deepening economic downturn in the United States and elsewhere, or reductions in the level of government funding for scientific research, may cause our current or potential customers to delay or reduce purchases which could, in turn, result in reductions in sales of our products, materially and adversely affecting our results of operations and cash flows.

Volatility and disruption of global financial markets could limit our customers’ ability to obtain adequate financing to maintain operations and proceed with planned or new capital spending initiatives, leading to a reduction in sales volume that could materially and adversely affect our results of operations and cash flow.

In addition, a decline in our customers’ ability to pay as a result of the economic downturn may lead to increased difficulties in the collection of our accounts receivable, higher levels of reserves for doubtful accounts and write-offs of accounts receivable, and higher operating costs as a percentage of revenues.

We have identified material weaknesses in our internal control over financial reporting which could, if not remediated, result in material misstatements in our consolidated financial statements.

We previously had identified material weaknesses in our internal control over financial reporting, which has now been remediated.

Any failure to maintain effective internal control over financial reporting could result in material misstatements in our financial statements and cause investors to lose confidence in our reported financial information, which in turn could cause the trading price of our securities to decline.

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act.

As disclosed in this Annual Report on Form 10-K for the year ended December 31, 2019, management identified material weaknesses in our internal control over financial reporting.

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, management identified material weaknesses in our internal control over financial reporting as of the end of the end of that fiscal year.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We did not design and maintain an effective control environment commensurate with our financial reporting requirements.

Specifically, we lacked a sufficient complement of personnel in our corporate tax department and a U.S.

subsidiary with an appropriate level of tax and accounting knowledge, training and experience to appropriately analyze, record and disclose tax and accounting matters timely and accurately.

This material weakness contributed to the following additional material weaknesses:

● We did not maintain effective internal controls with respect to accounting for income taxes.

Specifically, our controls over income taxes did not operate effectively as designed.

This control deficiency resulted in immaterial misstatements to the income tax provision, income taxes payable, and uncertain tax position reserves accounts in our consolidated financial statements for the year ended December 31, 2019.

● We did not maintain effective internal controls with respect to accounting for revenue transactions at a U.S.

Specifically, our controls over revenue recognition at a U.S.

subsidiary did not operate effectively as designed.

This control deficiency resulted in immaterial errors to revenue, accounts receivable and deferred revenue accounts in our consolidated financial statements for the year ended December 31, 2019.

These errors did not, individually or in the aggregate, result in a material misstatement of our consolidated financial statements and disclosures as of and for the year ended December 31, 2019.

However, these control deficiencies could result in a misstatement of the interim or annual financial statements that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected.

Accordingly, our management determined that these control deficiencies constitute material weaknesses.

If not remediated, these material weaknesses could result in material misstatements in our consolidated financial statements.

Effective internal controls are necessary for us to provide reliable and accurate financial statements and to effectively prevent fraud.

We devote significant resources and time to comply with the internal control over financial reporting requirements of the Sarbanes Oxley Act of 2002 and continue to enhance our controls.

In the year ended December 31, 2020, we remediated the previously disclosed material weakness in our internal controls over the accounting for income taxes and revenue recognition.

However, we cannot be certain that we will be able to prevent future significant deficiencies or material weaknesses.

Inadequate internal controls could cause investors to lose confidence in our reported financial information, which could have a negative effect on investor confidence in our financial statements, the trading price of our stock and our access to capital.

We may lose money when we exchange foreign currency received from international sales into U.S.

17 unchanged sentences

Moreover, as exchange rates vary, revenue and other operating results may differ materially from our expectations.

The effects of changes in currency exchange rates decreased our 2019 revenue by approximately $50.3 million, or 2.7%, and increased our 2018 revenue by approximately $25.5 million, or 1.4%.

The effects of changes in currency exchange rates increased our 2020 revenue by approximately $29.4 million, or 1.4%, decreased our 2019 revenue by approximately $50.3 million, or 2.7%, and increased our 2018 revenue by approximately $25.5 million, or 1.4%.

Adjustments resulting from financial statement translations are included as a separate component of shareholders’ equity.

In the years ended December

31, 2019 and 2018, we recorded net losses from currency translation adjustments of $20.0 million and $25.5 million, respectively.

In the years ended December 31, 2020 and 2019, we recorded net gains from currency translation adjustments of $22.0 million and net losses of $20.0 million, respectively.

Additionally, to the extent monetary assets and liabilities, including cash and debt, are held in a different currency than the reporting subsidiary’s functional currency, fluctuations in currency exchange rates may have a significant impact on our reported financial results, and may lead to increased earnings volatility.

We may record significant gains or losses related to both the translation of assets and liabilities held by our subsidiaries into local currencies and the remeasurement of inter-company receivables and loan balances.

If we are not able to successfully integrate the businesses we acquire through mergers, acquisitions or strategic alliances, we may not be able to realize all of the cost savings and other benefits that we expect to result from the transactions and our financial results may be different than expected.

Our strategy includes expanding our technology base and product offerings through selected mergers, acquisitions and strategic alliances.

For example, from January 1, 2017 to December 31, 2019, we have acquired 21 businesses to expand our technologies and product offerings.

Successful integration of the businesses we acquire involves a number of risks, including, among others, risks related to:

● coordinating or consolidating geographically separate organizations and integrating personnel with different business backgrounds and corporate cultures;

● integrating previously autonomous departments in sales and marketing, distribution, accounting and administrative functions;

● integrating financial information and management systems;

● the pace of our acquisition activity and the related diversion of already limited resources and management time;

● disruption of our ongoing business;

● potential impairment of relationships with customers as a result of changes in management or otherwise arising out of such transactions;

● retention of key employees of the acquired businesses within the first one to two years after the acquisition, including the risk that they may compete with us subsequently.

We may have difficulty developing, manufacturing and marketing the products of a newly acquired company or business in a way that enhances the performance of our combined businesses or product lines.

As a result, we may not realize the value from expected synergies.

Acquisitions have resulted, and may in the future result, in unexpected significant costs and expenses, including disputes over contingent consideration and complicated accounting for complex transaction structures.

In the future, we may be required to record charges to earnings during the period if we determine there is an impairment of goodwill or intangible assets, up to the full amount of the value of the assets.

We generally assume the liabilities of businesses we acquire, which could include liability for an acquired business’ violation of law that occurred before we acquired it.

In addition, we have historically acquired smaller, privately held companies that may not have strong cultures of legal compliance or the robust financial controls of a larger, publicly traded company, and if we fail to implement adequate training, controls, and monitoring of the acquired companies, we could also be liable for post-acquisition legal violations.

It may be difficult for us to implement our strategies for improving margins, profitability and cash flow.

We are pursuing a number of strategies to improve our financial performance, including implementing various productivity improvement initiatives in an effort to streamline our operations.

These initiatives include

the outsourcing of manufacturing activities;

consolidating, transferring or ceasing operations at certain facilities;

applying lean manufacturing and six sigma concepts to our operations;

implementing ERP and other information technology systems;

and applying a shared service approach to various functions.

We may not be able to successfully implement these strategies, and these efforts may not result in the expected improvement in our margins, profitability or cash flow.

Anticipated benefits to our operating and financial performance might be reduced or delayed as a result of difficulties in implementing these initiatives, which may include complications in the transfer of assets and production knowledge, loss of key employees and/or customers, the disruption of ongoing business and possible inconsistencies in standards, controls and procedures.

Implementation costs also might exceed our expectations and further cost reduction measures might become necessary, resulting in additional future charges.

Our ability to successfully implement these strategies and achieve our objectives will also depend on our ability to identify, attract and retain management and other personnel with the skills and experience needed to effectively manage the process and drive our operating performance improvement during and after implementation of our improvement initiatives.

These improvement strategies may also have unintended consequences, such as attrition beyond our intended reduction in workforce, reduced employee morale and loss of customer relationships.

We also may undertake additional restructuring activities in the future.

Because of these and other factors, we cannot predict whether we will realize the purpose and anticipated benefits of our restructuring and related measures, and if we do not, our business and results of operations may be adversely affected.

Goodwill, intangible assets and other long-lived assets are subject to impairment which could negatively impact our operating results.

4 unchanged sentences

Our ability to realize the value of these assets will depend on the future cash flows of the reporting unit in addition to how well we integrate the businesses we acquire.

We have recorded impairment losses of $1.7 million, $0.6 million, and $1.1 million for the years ended December 31, 2019, 2018 and 2017, respectively.

We did not record any impairment losses for the year ended December 31, 2020.

We have recorded impairment losses of $1.7 million and $0.6 million for the years ended December 31, 2019 and 2018, respectively.

If our products fail to achieve and sustain sufficient market acceptance across their broad intended range of applications, we will not generate expected revenue.

6 unchanged sentences

Limited funding available for capital acquisitions by our customers, as well as our customers’ own internal purchasing approval policies, could hinder market acceptance of our products.

Our intended customers may be reluctant to make the substantial capital investment generally needed to acquire our products or to incur the training and other costs involved with

replacing their existing systems with our products.

Our intended customers may be reluctant to make the substantial capital investment generally needed to acquire our products or to incur the training and other costs involved with replacing their existing systems with our products.

We also may not be able to convince our intended customers that our systems are an attractive and cost-effective alternative to other technologies and systems for the acquisition, analysis and management of molecular, cellular and microscopic information.

2 unchanged sentences

The market for discovery and analysis tools is characterized by rapid technological change and frequent new product introductions.

Rapidly changing technology could make some or our entire product lines obsolete unless we are able to continually improve our existing products and develop new products.

Because substantially all of our products are based on our technology platforms, including magnetic resonance technology, mass spectrometry technology, X-ray technology, atomic force microscopy technology, fluorescence microscopy technology, stylus and optical metrology technology and infrared technology, we are particularly vulnerable to any technological advances that would make these techniques obsolete as the basis for analytical systems in any of our markets.

Rapidly changing technology could make some or all of our product lines obsolete unless we are able to continually improve our existing products and develop new products.

of our markets.

To meet the evolving needs of our customers, we must rapidly and continually enhance our current and planned products and services and develop and introduce new products and services.

2 unchanged sentences

If we fail to develop and introduce products in a timely manner in response to changing technology, market demands or the requirements of our customers, our product sales may decline, and we could experience significant losses.

Our business could be harmed if our collaborations fail to advance our product development.

Demand for our products will depend, in part, upon the extent to which our collaborations with pharmaceutical, biotechnology and proteomics companies are successful in developing, or helping us to develop, new products and new applications for our existing products.

In addition, we collaborate with academic institutions and government research laboratories on product development.

We have limited or no control over the resources that any collaborator may devote to our products.

Any of our present or future collaborators may not perform their obligations as expected.

If we fail to enter into or maintain appropriate collaboration agreements, or if any of these events occur, we may not be able to develop some of our new products, which could materially impede our ability to generate revenue or profits.

We face substantial competition.

8 unchanged sentences

Our ability to compete successfully will depend, in part, on our ability to develop proprietary products that reach the market in a timely manner and are technologically superior to, less expensive than, or more cost-effective than, other currently marketed products.

If we lose our strategic partners, our marketing and sales efforts could be impaired.

A substantial portion of our sales of selected products consists of sales to third parties who incorporate our products into their systems.

These third parties are responsible for the marketing and sales of their systems.

We have little or no control over their marketing and sales activities or how they use their resources.

Our present or future strategic partners may or may not purchase sufficient quantities of products from us or perform appropriate marketing and sales activities.

In addition, if we are unable to maintain our relationships with strategic partners, our businesses may suffer.

Failures by our present or future strategic partners, or our inability to maintain existing or enter into new arrangements with strategic partners for product distribution, could materially impede the growth of our businesses and our ability to generate sufficient revenue and profits.

We face risks related to sales through distributors and other third parties that we do not control, which could harm our business.

We sell some products through third party agents, including distributors and value-added resellers.

This exposes us to various risks, including competitive pressure, concentration of sales volumes, credit risks, and compliance risks.

We may rely on one or a few key distributors for a product or market, and the loss of these distributors could reduce our revenue and net earnings.

Distributors may also face financial difficulties, including bankruptcy, which could harm our collection of accounts receivables.

Risks related to our use of distributors may reduce sales, increase expenses, and weaken our competitive position.

Moreover, violations of the FCPA or similar anti-bribery laws by distributors or other third party agents could materially and adversely impact our business, reputation and results of operations.

Dependence on contract manufacturing may adversely affect our ability to bring products to market and damage our reputation.

As part of our efforts to streamline our operations and reduce our operating costs, we outsource aspects of our manufacturing processes and continue to evaluate additional outsourcing.

If our contract manufacturers fail to perform their obligations in a timely manner or at satisfactory quality levels, our ability to bring products to market and our reputation could suffer.

For example, during a market upturn, our contract manufacturers may be unable to meet our demand requirements, which may preclude us from fulfilling our customers’ orders on a timely basis.

The ability of these manufacturers to perform is largely outside our control.

Additionally, changing or replacing our contract manufacturers could cause disruptions or delays.

Problems with outsourced manufacturing could result in lower revenues and unexecuted efficiencies, and adversely affect our financial condition and results of operations.

If investment in life and material science research spending declines, our ability to generate revenue may suffer.

19 unchanged sentences

If disputes with these employees arise, or if our workers engage in a strike or other work stoppage or interruption, we could experience a significant disruption of, or inefficiencies in, our operations or incur higher labor costs, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Our operations are dependent upon a limited number of suppliers and contract manufacturers.

We currently purchase components used in our products from a limited number of outside suppliers.

Our reliance on a limited number of suppliers could result in time delays associated with redesigning a product due to an inability to obtain an adequate supply of required components and reduced control over pricing, quality and timely delivery.

Any of these factors could adversely affect our revenues and profitability.

In particular, our X-ray microanalysis business, which manufactures and sells accessories for electron microscopes, is partially dependent on cooperation from larger manufacturers of electron microscopes.

Additionally, our elemental analysis business purchases certain optical detectors from a single supplier, PerkinElmer, Inc., the sole supplier of these detector components.

Bruker CALID purchases detectors and power supplies from sole or limited source suppliers and its focal plane array detectors from a single supplier, Lockheed Martin Corporation.

Similarly, Bruker BioSpin obtains various components from sole or limited source suppliers and BEST obtains various raw materials and uses key production equipment from sole or limited source suppliers or contract manufacturers.

There are limited, if any, available alternatives to these suppliers.

The existence of shortages of these components or the failure of delivery with regard to these components could have a material adverse effect upon our revenues and margins.

In addition, price increases from these suppliers or contract manufacturers could have a material adverse effect upon our gross margins.

Because of the scarcity of some components, we may be unable to obtain an adequate supply of components, or we may be required to pay higher prices or to purchase components of lesser quality.

Any delay or interruption in the supply of these or other components could impair our ability to manufacture and deliver our products, harm our reputation and cause a reduction in our revenues.

In addition, any increase in the cost of the components that we use in our products could make our products less competitive and decrease our gross profits.

We may not be able to obtain sufficient quantities of required components on the same or substantially the same terms.

Additionally, consolidation among our suppliers could result in other sole source suppliers for us in the future.

Other events that could affect our ability to source materials, manufacture or distribute our products include fire,

natural disaster or extreme weather or a pandemic and the impact of those events on our and our suppliers’ and contract manufacturers’ operations.

Supply shortages and increasing prices of raw materials could adversely affect the gross profit of the Bruker BioSpin Group and the BEST Segment.

The last few years have seen periodic supply shortages and sharp increases in the prices for various raw materials, in part due to high demand from developing countries.

Bruker BioSpin and BEST rely on some of these materials for the production of their products.

In particular, for its superconducting magnet production, both for the horizontal and vertical magnet series, Bruker BioSpin relies on the availability of copper, steel and the metallic raw materials for traditional low-temperature superconducting wires.

Similarly, BEST relies on the availability of niobium titanium for its production of low-temperature superconducting materials and devices.

Higher prices for these commodities will increase the production cost of superconducting wires and superconducting magnets and may adversely affect gross profits.

The prices of copper and certain other raw materials used for superconductors have increased significantly over the last decade.

Since copper is a main constituent of low temperature superconductors, this may affect the price of superconducting wire.

This type of increase would have an immediate effect on the production costs of superconducting magnets and may negatively affect the profit margins for those products.

In addition, an increase in raw material cost affects the production cost of the superconducting wire produced by BEST and of superconducting wire used by Bruker BioSpin.

Bruker BioSpin and its customers also rely on liquid helium to operate superconducting magnets.

Helium is controlled by the Federal Helium Reserve and is subject to price changes.

Shortages of liquid helium associated with federal price controls or depleted natural reserves could have an adverse impact on producing and operating BioSpin’s superconducting magnets and may also drive increases in helium pricing and negatively impact the profit margins of those products.

Our manufacture and sale of products could lead to product liability claims for which we could have substantial liability.

The manufacture and sale of our products expose us to product liability claims if any of our products cause injury or are found otherwise unsuitable during manufacturing, marketing, sale or customer use.

In particular, if one of our CBRNE detection products malfunctions, this could lead to civilian or military casualties in a time of unrest, exposing us to increased potential for high-profile liability.

If our CBRNE detection products malfunction by generating a false-positive to a potential threat, we could be exposed to liabilities associated with actions taken that otherwise would not have been required.

Additionally, the nuclear magnetic resonance, research magnetic resonance imaging, Fourier transform mass spectrometry and certain electron paramagnetic resonance magnets of Bruker BioSpin utilize high magnet fields and cryogenics to operate at approximately 4 Kelvin, the temperature of liquid helium.

There is an inherent risk of potential product liability due to the existence of these high magnetic fields, associated stray fields outside the magnet, and the handling of the cryogens associated with superconducting magnets.

In addition, our MALDI Biotyper product has an IVD-CE mark and U.S.

FDA approval and is used for the identification of microorganisms.

Misidentification or a false-negative of certain viruses, bacteria, yeasts or fungi could lead to inappropriate treatment for patients and could expose us to product liability claims.

A successful product liability claim brought against us in excess of, or outside the coverage of, our insurance coverage could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to maintain product liability insurance on acceptable terms, if at all, and insurance may not provide adequate coverage against potential liabilities.

Responding to claims relating to improper handling, storage or disposal of hazardous chemicals and radioactive and biological materials which we use could be time consuming and costly.

We use controlled hazardous and radioactive materials in our business and generate wastes that are regulated as hazardous wastes under U.S.

federal, and Massachusetts, California, New Jersey, Washington and Wisconsin state, environmental and atomic energy regulatory laws and under equivalent provisions of law in those and other jurisdictions in which our research and manufacturing facilities are located.

Our use of these substances and materials is subject to stringent, and periodically changing, regulation that can impose costly compliance obligations on us and have the potential to adversely affect our manufacturing activities.

The risk of accidental contamination or injury from these materials cannot be completely eliminated.

If an accident with these substances occurs, we could be held liable for any damages that result, in addition to incurring clean-up costs and liabilities, which can be substantial.

Additionally, an accident could damage our research and manufacturing facilities resulting in delays and increased costs.

We are subject to environmental laws and regulations, which may impose significant compliance or other costs on us.

Our manufacturing, product development and research and development operations and processes involve the controlled use of certain hazardous materials.

In addition, we own and/or lease a number of facilities, some of which have been in operation for many decades, where we or others may have used substances or generated and disposed of wastes which are considered hazardous or may be considered hazardous in the future.

We also have acquired various companies which historically may have used certain hazardous materials and which may have owned and/or leased facilities at which hazardous materials have been used.

For all of these reasons, we are subject to federal, state, foreign, and local laws and regulations governing the use, manufacture, storage, transportation, handling, treatment, remediation, and disposal of hazardous materials and certain waste products.

We have potential liability under these laws and regulations with respect to the remediation of past contamination in certain of the facilities we now own or lease.

Additionally, in the future our facilities and the disposal sites owned by others to which we send or sent waste, may be identified as contaminated and require remediation.

Accordingly, we may become subject to additional compliance costs or environmental liabilities which may be significant and could materially harm our results of operations or financial condition.

In addition to the risks applicable to our life science and materials analysis products, our CBRNE detection products are subject to a number of additional risks, including lengthy product development and contract negotiation periods and certain risks inherent in long-term government contracts.

10 unchanged sentences

The resulting uncertainty may have an adverse impact on our stock price.

We are subject to existing and potential additional regulation and government inquiry, which can impose burdens on our operations and narrow the markets for our products.

We are subject, both directly and indirectly, to the adverse impact of existing and potential future government regulation of our operations and markets.

For example, the exportation of our products is subject to U.S.

export control, sanctions, customs, import and anti-boycott laws and regulations, including, as applicable, the International Traffic in Arms Regulations, the Export Administration Regulations and the sanctions laws, regulations and executive orders administered and enforced by the U.S.

Department of the Treasury’s Office of Foreign Assets Control, and other laws and regulations adopted by the governments or agencies of other countries relating to the same subject matter as the U.S.

laws and regulations described above.

The failure to satisfy export control criteria or obtain necessary clearances could delay or prevent shipment of products, which could adversely affect our revenues and profitability.

Failure by us, our employees or others working on our behalf to comply with these laws and regulations could result in administrative, civil or criminal liabilities, including suspension, debarment from bidding for or performing government contracts, suspension of our export privileges, which could have a material adverse effect on us.

We frequently team with international subcontractors and suppliers who are also exposed to similar risks.

In some cases, compliance with the laws and regulations of one country could violate the laws and regulations of another country.

Violations of these laws and regulations could materially adversely affect our brand, international growth efforts and business.

In addition, as a result of our international operations, we are subject to compliance with various laws and regulations, including the FCPA and local anti-bribery laws in the jurisdictions in which we do business, which generally prohibit companies and their intermediaries or agents from engaging in bribery or making improper payments to foreign officials or their agents.

The FCPA also requires proper record keeping and characterization of such payments in our reports filed with the SEC.

Despite maintaining policies and procedures that require our employees to comply with these laws and our standards of ethical conduct, we cannot ensure that these policies and procedures will always protect us from intentional, reckless or negligent acts committed by our employees or third party agents.

Moreover, the life sciences industry, which is the market for our principal products, has historically been heavily regulated.

Given the evolving nature of this industry, legislative bodies or regulatory authorities may adopt additional regulation that adversely affects our market opportunities.

Our business is also directly affected by a wide variety of government regulations applicable to business enterprises generally and to companies operating in the life sciences industry in particular.

Our clinical products are subject to regulation by the FDA.

These regulations govern a wide variety of product related activities, from quality management, design and development to labeling, manufacturing, promotion, sales and distribution.

If we or any of our suppliers or distributors fail to comply with FDA and other applicable regulatory requirements, or are perceived to potentially have failed to comply, we may face, among other things, warning letters;

adverse publicity affecting both us and our customers;

investigations or notices of non-compliance, fines, injunctions, and civil penalties;

import or export restrictions;

partial suspensions or total shutdown of production facilities or the imposition of operating restrictions;

increased difficulty in obtaining required FDA clearances or approvals or foreign equivalents;

seizures or recalls of our products or those of our customers;

or the inability to sell such products.

Any such FDA actions could disrupt our business and operations, lead to significant remedial costs and have a material adverse impact on our financial position and results of operations.

There are similar foreign regulations.

For instance, the coming into force of the European Union Directive in May 2022 by the IVD Regulation (EU) 2017/746 imposes a stricter regime on manufacturers of IVDs and our products currently approved under the Directive must be recertified under the Regulation by May 2024.

We have been, are, and expect to be in the future, subject to inquiries from the government agencies that enforce these regulations, including the U.S.

Department of State, the U.S.

Department of Commerce, the U.S.

FDA, the U.S.

Internal Revenue Service, the U.S.

Department of Homeland Security, the U.S.

Department of Justice, the Securities and Exchange Commission, the Federal Trade Commission, the U.S.

Customs and Border

Protection and the U.S.

Department of Defense, among others, as well as from state or foreign governments and their departments and agencies.

As a result, from time to time, the attention of our management and other resources may be diverted to attend to these inquiries.

In addition, failure to comply with these regulations or obtain or maintain necessary permits and licenses could result in a variety of fines or other censures or an interruption in our business operations which may have a negative impact on our ability to generate revenues and could adversely affect our financial condition and results of operations.

Our success depends on our ability to operate without infringing or misappropriating the proprietary rights of others.

Our commercial success depends on avoiding the infringement of other parties’ patents and proprietary rights as well as avoiding the breach of any licenses relating to our technologies and products.

Given that there may be patents of which we are unaware, particularly in the United States where patent applications are confidential, avoidance of patent infringement may be difficult.

Various third parties hold patents which may relate to our technology, and we may be found in the future to infringe these or other patents or proprietary rights of third parties, either with products we are currently marketing or developing or with new products which we may develop in the future.

If a third party holding rights under a patent successfully asserts an infringement claim with respect to any of our current or future products, we may be prevented from manufacturing or marketing our infringing product in the country or countries covered by the patent we infringe, unless we can obtain a license from the patent holder.

We may not be able to obtain a license on commercially reasonable terms, if at all, especially if the patent holder is a competitor.

In addition, even if we can obtain the license, it may be non-exclusive, which will permit others to practice the same technology licensed to us.

We also may be required to pay substantial damages to the patent holder in the event of infringement.

Under some circumstances in the United States these damages could include damages equal to triple the actual damages the patent holder incurs.

If we have supplied infringing products to third parties for marketing by them or licensed third parties to manufacture, use or market infringing products, we may be obligated to indemnify these third parties for any damages they may be required to pay to the patent holder and for any losses the third parties may sustain themselves as the result of lost sales or license payments they are required to make to the patent holder.

Any successful infringement action brought against us may also adversely affect marketing of the infringing product in other markets not covered by the infringement action, as well as our marketing of other products based on similar technology.

Furthermore, we will suffer adverse consequences from a successful infringement action against us even if the action is subsequently reversed on appeal, nullified through another action or resolved by settlement with the patent holder.

The damages or other remedies awarded, if any, may be significant.

As a result, any successful infringement action against us may harm our business.

If we are unable to effectively protect our intellectual property, third parties may use our technology, which would impair our ability to compete in our markets.

Our continued success will depend in significant part on our ability to obtain and maintain meaningful patent protection for our products throughout the world.

We rely on patents to protect a significant part of our intellectual property and to enhance our competitive position.

However, our presently pending or future patent applications may not issue as patents, and any patent previously issued to us may be challenged, invalidated, held unenforceable or circumvented.

Furthermore, the claims in patents which have been issued, or which may be issued to us in the future, may not be sufficiently broad to prevent third parties from producing competing products similar to our products.

In addition, the laws of various foreign countries in which we compete may not protect our intellectual property to the same extent as do the laws of the United States.

Failure to obtain adequate patent protection for our proprietary technology could materially impair our ability to be commercially competitive.

In addition to patent protection, we also rely on the protection of trade secrets, know-how and confidential and proprietary information.

To maintain the confidentiality of trade secrets and proprietary information, we generally seek to enter into confidentiality agreements with our employees, consultants and strategic partners upon the commencement of a relationship with us.

However, we may not obtain these agreements in all

circumstances.

In the event of unauthorized use or disclosure of this information, these agreements, even if obtained, may not provide meaningful protection for our trade secrets or other confidential information.

In addition, adequate remedies may not exist in the event of unauthorized use or disclosure of this information.

The loss or exposure of our trade secrets and other proprietary information would impair our competitive advantages and could have a material adverse effect on our operating results, financial condition and future growth prospects.

Furthermore, others may have, or may in the future independently develop, substantially similar or superior know-how and technology.

We may be involved in lawsuits to protect or enforce our patents that are brought by us which could be expensive and time consuming and, if determined adversely, could adversely affect our patent position.

In order to protect or enforce our patent rights, we may initiate patent litigation against third parties, and we may be similarly sued by others.

We may also become subject to interference proceedings conducted in the patent and trademark offices of various countries to determine the priority of inventions.

The defense and prosecution, if necessary, of intellectual property suits, interference proceedings and related legal and administrative proceedings is costly and diverts our technical and management personnel from their normal responsibilities.

We may not prevail in any of these suits.

An adverse determination of any litigation or defense proceedings could put our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

In addition, during the course of this kind of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments in the litigation.

If securities analysts or investors perceive these results to be negative, it could have a substantial negative effect on the trading price of our common stock.

On September 25, 2019, in a complaint filed in the Düsseldorf, Germany, District Court, Carl Zeiss Microscopy GmbH, a subsidiary of Carl Zeiss AG (Zeiss), sued Luxendo GmbH (Luxendo), a subsidiary of Bruker Corporation, for infringement of a recently registered German utility model patent licensed to Zeiss pertaining to one specific Luxendo product category.

We intend to vigorously defend against this claim.

On September 23, 2019, in a complaint filed in the Düsseldorf, Germany, District Court, Micromass UK Limited, a subsidiary of Waters Corporation, sued Bruker Corporation, as well as its affiliate, Bruker Daltonik GmbH, for infringement of a European patent pertaining to our timsTOF product line.

On March 6, 2020, Bruker was notified that Micromass has expanded its complaint in Düsseldorf and now asserts another recently granted European patent in Germany.

We intend to vigorously defend against these claims.

We rely on information technology to support our operations and reporting environments.

3 unchanged sentences

Our ability to conduct business could be materially and adversely affected if these systems or resources are compromised, damaged or fail.

This could be a result of a cyber-incident, social engineering scam, hacking, natural disaster, hardware or software corruption, failure or error, telecommunications system failure, service provider error or failure, intentional or unintentional personnel actions or other disruption.

This could be a result of a cyber-incident, social engineering scam, hacking, phishing attempts, malware, natural disaster, hardware or software corruption, failure or error, telecommunications system failure, service provider error or failure, intentional or unintentional personnel actions or other disruption.

In the ordinary course of business, we collect and store sensitive data, including intellectual property, other proprietary information and personally identifiable information.

Despite our security measures, our information technology and infrastructure may be vulnerable to cyber-attacks by hackers or breached due to employee error, malfeasance, or other disruptions.

If this data is compromised, destroyed or inappropriately disclosed, it could

have a material adverse effect, including damage to our reputation, loss of customers, significant expenses to address and resolve the issues, fines or litigation or other proceedings by affected individuals, business partners or regulatory authorities.

If this data is compromised, destroyed or inappropriately disclosed, it could have a material adverse effect, including damage to our reputation, loss of customers, significant expenses to address and resolve the issues, fines or litigation or other proceedings by affected individuals, business partners or regulatory authorities.

Our debt may adversely affect our cash flow and may restrict our investment opportunities or limit our activities.

14 unchanged sentences

Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit London Interbank Offered Rate, or LIBOR, rates after 2021.

As a result, LIBOR may be discontinued by 2021.

As a result, LIBOR may be discontinued in 2021.

While there is no consensus on what rate or rates may become accepted alternatives to LIBOR, the Alternative Reference Rates Committee, a steering committee comprised of U.S.

6 unchanged sentences

Changes in our effective income tax rate could adversely affect our results of operations.

We are subject to income taxes in both the United States and various foreign jurisdictions and our domestic and international tax liabilities are largely dependent upon the distribution of income among these different

jurisdictions.

Various factors may have favorable or unfavorable effects on our effective income tax rate.

2 unchanged sentences

A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate could result in a higher tax rate on our earnings, which could result in a significant negative impact on our earnings and cash flow from operations.

In addition to the passage of the Tax Cuts and Jobs Act in the United States, there are currently multiple initiatives for comprehensive tax reform underway in other key jurisdictions where we have operations.

We continue to assess the impact of the U.S.

Tax Cuts and Jobs Act as well as various international tax reform proposals and modifications to existing tax treaties in all jurisdictions where we have operations that could result in a material impact on our income taxes.

In addition to the passage of the Tax Cuts and Jobs Act in 2017 in the United States, there are currently multiple initiatives for comprehensive tax reform underway in other key jurisdictions where we have operations.

We assess the impact of various international tax reform proposals and modifications to existing tax treaties in all jurisdictions where we have operations that could result in a material impact on our income taxes.

We cannot predict whether any other specific legislation will be enacted or the terms of any such legislation.

20 unchanged sentences

● costs related to acquisitions of technology or businesses;

● the effectiveness of transactions entered into to hedge the risks associated with foreign currency and interest rate fluctuations.

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:

14 unchanged sentences

The ownership of our shares is highly concentrated, which could cause or exacerbate volatility in our share price as well as have significant influence over us.

As of March 20, 2020, Laukien family members, including our Chairman, President and Chief Executive Officer Frank Laukien and his brother, Joerg Laukien, owned, in the aggregate, approximately 33% of our outstanding common stock.

As of February 18, 2021, Laukien family members, including our Chairman, President and Chief Executive Officer Frank Laukien and his brother, Joerg Laukien, owned, in the aggregate, approximately 31% of our outstanding common stock.

We may also repurchase shares in the future, which could further increase the concentration of our share ownership.

3 unchanged sentences

This could have the effect of delaying or preventing a change in control of our company and will make some transactions difficult to accomplish without the support of these stockholders.

Other companies may have difficulty acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate charter and bylaws, as well as Delaware law.

Provisions in our certificate of incorporation, as amended, and our bylaws, as well as Delaware law could make it more difficult for other companies to acquire us, even if doing so would benefit our stockholders.

Our certificate of incorporation, as amended, and bylaws contain the following provisions, among others, which may inhibit an acquisition of our company by a third party:

● a staggered Board of Directors, where stockholders elect only a minority of the board each year;

● advance notification procedures for matters to be brought before stockholder meetings;

● a limitation on who may call stockholder meetings;

● the ability of our Board of Directors to issue up to 5,000,000 shares of preferred stock without a stockholder vote.

The loss of key personnel or an inability to attract and retain additional personnel could affect our ability to successfully grow our business.

We are highly dependent upon the continued service and performance of our CEO and other members of senior management and key technical, scientific and production personnel, any of whom may cease their employment with us at any time with minimal advance notice.

We are highly dependent upon the continued service and performance of our CEO and other members of senior management and key finance, technical, scientific and production personnel, any of whom may cease their employment with us at any time with minimal advance notice.

Because the expertise of these individuals is highly specific and takes years to develop, we face intense competition for these individuals from many other companies.

5 unchanged sentences

In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.

Risks Related to Our Dependence on Third Parties