Bruker Corporation

Hey, and welcome to the Berger Corporation first quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question from the queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Miroslava Minkova, Senior Director of Investor Relations and Corporate Development. Please go ahead.

Thank you, Sarah. Good morning, everyone. I would like to welcome everyone to Brooker's first quarter 2021 earnings conference call. My name is Miroslava Minkova, Senior Director of Investor Relations and Corporate Development. Joining me on today's call are Frank Laukeen, our President and CEO, and Gerald Herman, our Executive Vice President and Chief Financial Officer. In addition to the earnings release we issued earlier today, during today's conference call we'll be referencing a slide presentation. The PDF of this presentation can be downloaded from the latest results section on Booker's Investor Relations website. During today's call, we'll be highlighting non-GAAP financial information. Reconciliations of our non-GAAP to GAAP financial measures are included in our earnings release, and they're posted on our website at ir.broecker.com. Before we begin, I would like to reference Broecker's safe harbor statement, which we show on slide two. During the course of this conference call, we'll make forward-looking statements regarding future events and the financial and operational performance of the company that involve risks and uncertainties, including those related to the ongoing COVID-19 pandemic as well as ongoing worldwide semiconductor chip and other supply shortages. The company's actual results may differ materially from such statements. Factors that might cause such differences include, but are not limited to, those discussed in today's earnings release and in our Form 10-K, as updated by our other SEC filings, which are available on our website and on the SEC's website. Also, note that the following information is related to current business conditions and to our outlook as of today, May 5th, 2021. We do not intend to update our forward-looking statements based on new information, future events, or for other reasons prior to the release of our second quarter 2021 financial results expected in early August 2021. except for any forward-looking statements regarding medium-term outlook that we may share at our upcoming Investor Day in June. Therefore, you should not rely on these forward-looking statements as representing our views or outlook as of any date subsequent to today. We'll begin today's call with Frank providing a business summary. Gerald will then cover the financials for the first quarter in more detail. Now, I'd like to turn the call over to Brooker CEO Frank Laukeen.

Thank you, Miroslava. Good morning, everyone, and thank you for joining us on today's call. Rooker had an excellent first quarter with a strong start to 2021. We saw a significant recovery in many of our businesses previously impacted by the pandemic. Our project accelerate initiatives continue to deliver strong growth and value. and our financial performance stepped up accordingly, reflecting strength and competitive business and end market dynamics. We also continue to make progress in the expansion of Project Accelerate, which we now call Project Accelerate 2.0. So Q1, first quarter 2021 revenues grew 30.8% to approximately $555 million. Foreign currency translation was a tailwind of 6.2%, while acquisitions added 0.8% to revenue growth in the quarter. On an organic basis, brokers' revenues increased 23.8% year-over-year from a pandemic-impacted Q1 2020 when our revenues were down approximately 8% organically. The reported and organic revenue increases in Q1 of 2022 reflected strong demand for our high-performance life science tools, scientific instruments, and diagnostic solutions, with continued uptake of our project accelerate growth initiatives and a strong recovery in end markets globally. Our first quarter 21 non-GAAP gross margins stepped up 460 bps year-over-year, while our non-GAAP operating margin reached 18.4% from 7.6% in the first quarter of 2020. The improvements reflect our revenue and volume increase, positive operating leverage, and higher project accelerate revenue in the mix. In the first quarter of 2021, Broecker reported GAAP diluted earnings per share of 37 cents. On a non-GAAP basis, first quarter 21 diluted EPS were 44 cents, more than tripling compared to 14 cents in the first quarter of 2020. First quarter 2021 order bookings for Broecker's scientific instruments groups grew mid-teens organically year over year. This reflected continued strong order growth for our innovative proteomics and biopharma solutions and a strong recovery in our academic, applied, and industrial research businesses. Demand for microelectronics and semiconductor metrology systems also remained robust. During the first quarter, we made further progress in three areas of significant long-term growth potential, unbiased proteomics, spatial and single-cell biology, and microbiology and molecular diagnostics. At the U.S. UPO Conference in March, researchers presented exciting new results in deep, unbiased plasma 4D proteomics using our unique TIMSTOP passive solutions. We believe that plasma proteomics is the next frontier for proteomics researchers, particularly for liquid biopsy multi-omics biomarker development using cancer proteogenomics methods. In late February of 2021, a seminal publication by the groups of professors Matthias Munn and Fabian Zeiss, published in Nature Communications, described collision cross-sections, or CCS, on the TIMSTOF platform as an essential intrinsic property of peptide ions. The Mann and Zeiss publication suggested that accurate large-scale Collision cross-section values, which are unique to TIMSTOF, can increase confidence in peptide and protein group identification. In spatial and single-cell biology, in March, we announced the formation of Acuity Spatial Genomics, a new company that is with a majority investment by Bruker. Acuity Spatial Genomics has core IP with an exclusive license to certain innovations made at Harvard University in Professor Ting Wu's lab. I will discuss Acuity Spatial Genomics in more detail later on the call. Finally, in our microbiology and diagnostics business, we began the U.S. rollout of the FDA-cleared MBT-septotyper IVD kit for the rapid identification of bacteria and fungi directly from positive blood cultures. We are very pleased with how our Project Accelerate 2.0 initiatives are unfolding. We will do a deeper dive into these areas at a planned Virtual Investor Day on June 17th. Last, but by no means least, we continue to drive operational excellence and productivity programs. These should support further operational gains and reinvestment in our business in 2021 and beyond. With that, please do turn to slides five and six now, where I provide further highlights on the first quarter 21 performance of our three scientific instruments groups and of our best segments, all on a constant currency and year-over-year basis. First quarter 2021, BioSpin group revenue grew in the mid-20s percentage to $159.4 million, as customer demand and instrument deliveries improved. BioSpin system revenue was up strongly and included customer acceptance of a 1.2 gigahertz system and of a 1.0 gigahertz system, both in Europe. During the quarter, in addition to strengthening academic markets, demand for BioSpin's industrial and applied solutions began to recover as well. BioSpin's aftermarket and software revenues also grew. First quarter 2021 CALID group revenues increased in the high 20s percentage to $192.4 million. The growth at CALID reflected strong demand for life science mass spectrometry and for FT-IR, Near-IR, Raman molecular spectroscopy products. During the quarter, we continued to see robust order and revenue growth, for our TIMSTOF unbiased 4D proteomics platform, while demand for other mass spec products also improved. Microbiology and molecular diagnostics revenue was higher on contributions from SARS-CoV-2 diagnostic products. During the first quarter of 2021, revenue from COVID testing was approximately 7 million. Virtually all incremental growth year over year but down sequentially from the fourth quarter of 2020. Revenues for our molecular spectroscopy products were sharply higher year over year amid excellent new product ramp and strengthened industrial, applied, and academic markets. Please turn to slide six now. Bruker Nano revenues increased in the mid-20s percentage to $154.4 million. In the quarter, Nano saw a rebound in its industrial research product lines and a recovering academic business. Demand for Nano's microelectronics and semiconductor metrology products remained strong. First quarter 2021, Nano revenue also included a modest contribution from our September 2020 Canopy Biosciences single-cell targeted proteomics acquisition. In the first quarter of 2021, nanos advanced x-ray and nanosurface revenues grew strongly year over year, and nanoanalysis revenues stabilized. First quarter 2021, microelectronics and semiconductor metrology revenue grew significantly compared to first quarter 2020 on healthy demand. And finally, nanos fluorescence microscopy revenue was slightly higher year over year, but with very good order growth. Moving on to best, best revenue in the first quarter of 2021 grew in the mid-single digits, net of intercompany eliminations on contributions from best big science projects. During the first quarter, underlying demand for best superconductor products for healthcare and MRI began to recover after a slowdown in 2020, primarily attributed to the pandemic last year. Moving to slide seven, I would like to share some highlights on the recent U.S. and America's rollout of an enhanced 4E80 benchtop FT-NMR with applications in applied, industrial, pharmaceutical, and academic teaching markets. The benchtop 4E80 is a next-generation, higher-performance system featuring a permanent magnet so therefore no need for cryogen refills. The system is routinely equipped for gradient spectroscopy and has industry-leading automation options. We believe this system is poised to democratize NMR through a broad range of labs and applications, as it does not have the cost, space, or cryogen requirements of high-field superconducting NMR systems. Turning to slide 8, in March 2021, Acuity Spatial Genomics was formed with a majority investment by Bruker. ACQUITY aims to open a new frontier in spatial 3D genomics and multiomics analysis for basic research and discovery. ACQUITY leverages innovations developed in the lab of Professor Ting Wu, which is a professor of genetics at Harvard Medical School, and specifically the oligophysique methods and technology, which makes it possible to see the three-dimensional genome in situ, and at single-cell and subcellular resolutions. Capabilities enabled by ACQUITY include, for example, a deeper understanding of the three-dimensional chromatin structure and insights into transcription regulatory programs that drive cell type, cell state, pathogenesis, and function. Such fundamental cell biology discoveries could help address problems in complex questions in oncology, neuroscience, and cell development. Acuity is an important addition to our emerging spatial and single-cell biology portfolio. We look forward to sharing more information on this area at our upcoming Investor Day. So let me conclude by reiterating that our first quarter 2021 got us off to a strong start. We saw a recovery in most of our core businesses, and our high-growth Project Accelerate initiatives continued to deliver. As discussed on our February call, we are planning further investments this year to support the growth of our business and Project Accelerate 2.0, including in R&D and CapEx. At the same time, we also continue to drive our operational excellence programs, which are already partially reflected in the strong recovery of our core businesses. We are raising our fiscal year 2021 outlook for revenue growth, non-GAAP operating margin expansion, and non-GAAP EPS, as you can see from our press release. I'm confident that Bruker is emerging from the pandemic in a very strong position, and I look forward to further updating you on our many exciting opportunities at our Virtual Investor Day in June. Let me now turn the call over to our CFO, Gerald Herman, who will review our first quarter 2021 financial performance and guidance in detail. Gerald.