Bruker Corporation

Good day, everyone, and welcome to the Brewker second quarter 2021 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please say no to a conference specialist by pressing the star key followed by zero. After today's presentation, it will be an opportunity to ask questions. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Miroslava Minkova, Senior Director of Investor Relations and Corporate Development. Ma'am, please go ahead.

Thank you, Jamie. Good afternoon. I would like to welcome everyone to Bruker's second quarter 2021 earnings conference call. My name is Miroslava Minkova, Senior Director of Investor Relations and Corporate Development at Bruker Corporation. 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 the Brokers 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 are 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, the spread of the Delta variant, 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, August 2, 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 third quarter 2021 financial results expected in early November 2021. 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 summary.

gerald will then cover the financials for the second quarter in more detail now i would like to turn the call over to brooker ceo frank laukin thank you miroslava and good afternoon everyone thank you for joining us on today's earnings call broker again demonstrated excellent progress in the second quarter following our strong start in the first quarter of 2021 During the second quarter, brokers' revenues, margins, and earnings grew significantly year over year, with robust demand for our high-performance scientific instruments, life science, and diagnostic solutions amidst a solid end-market recovery. Our teams executed well across our core business and Project Accelerate, And Bruker is now very well positioned for excellent progress in 2021. Our second quarter 2021 revenues grew 34.4% to approximately $571 million. On an organic basis, brokers' revenues increased 27.2% year-over-year, which includes 27.8% organic growth in the broker scientific instruments groups and 21.8% organic growth at best. RQ221 non-GAAP gross margins expanded 490 basis points year-over-year to 50%. while our non-GAAP operating margin reached 17.3% up from 11.5% in the second quarter of 2020, which was negatively impacted by the pandemic. In the second quarter of 21, Brewker reported GAAP diluted earnings per share, or EPS, of $0.38 on a non-GAAP basis, Second quarter 2021 diluted EPS were $0.44 compared to $0.21 in the second quarter of 2020. Gerald will cover the drivers for margins and EPS later on the call. But in summary, the strong revenue and volume growth in the quarter drove substantial year-over-year growth and operating margin expansion, despite our increased R&D and marketing and sales investments in Project Accelerate 2.0. On slide five, we show Bruker's performance for the first half of 2021. Our revenues increased by $277 million year-over-year or by 32.6% to $1.126 billion. On an organic basis, revenues grew 25.5% year-over-year, again comprised of 26.7% organic growth in scientific instruments and a 14.3% organic increase at best net of intercompany eliminations. First half 2021 order bookings for brokers three scientific instruments groups grew more than 20% year-over-year organically, and our BSI book-to-bill ratio for the first half of the year remained above 1.0. during the first half of the year many of our businesses saw revenue and bookings growth even beyond what the pandemic recovery would imply as we experienced strong demand across our core academic and industrial businesses as well as in our project accelerate high growth markets geographically our first half 2021 order bookings were particularly strong in north america china and other Asia Pacific markets outside of Japan. Our first half 2021 non-GAAP growth and operating margin and GAAP and non-GAAP EPS performance are all summarized on slide five. All stepped up significantly year over year as our business recovered and actually accelerated in the first half of 2021. Please turn to slide six and seven now, where I provide highlights on the first half 2021 performance of our three scientific instruments groups and of our best segment, all on a constant currency and year-over-year basis. For the first half of 2021, the BioSpin group revenue grew approximately 20% to $307.9 million, reflecting a recovery in customer demand and installation activities compared to the first half of 2020. BioSpin systems revenue was up strongly year over year, including revenue recognition on two gigahertz class NMR systems in the first quarter of 2021. As expected, there were no gigahertz-class systems in revenue in the second quarter of 2021. In mid-June, the U.S. National Science Foundation announced a $40 million award to establish a network of advanced NMR, or NAN, among three U.S. academic institutions. University of Connecticut School of Medicine, the University of Georgia Complex Carbohydrate Research Center, and the University of Wisconsin Madison's National Magnetic Resonance Facility. We are pleased to announce that as a result of this grant, a new recent order for a 1.1 gigahertz NMR system has been received from the University of Wisconsin in Madison. BioSpin's aftermarket and software revenues also grew strongly, grew year over year. In the first half of 2021, our Kallit group revenues increased more than 30% to $385.7 million, with continued strong growth in our mass spectrometry and microbiology businesses, and a rebound in our FTIR, NeuroInferRed, and Raman molecular spectroscopy product lines. We continue to see very robust demand and revenue growth for our TIMSTOF unbiased 4D proteomics platform, while revenue for other life science mass spec products also grew year over year. Microbiology and molecular diagnostics revenue grew year over year, driven by healthy demand for our multi-biotyper instruments and consumables. coupled with a partial recovery of Bruker Heinz tuberculosis diagnostic products. During the second quarter, our revenue from SARS-CoV-2, or COVID PCR testing, was approximately $6 million. So first half 2021 revenues of our infrared, near-infrared Raman molecular spectroscopy products were sharply higher year over year with solid execution, new product adoption, and a strong global industrial applied and academic market rebound. Please turn to slide 7 now. First half 2021 broker Nano revenues grew in the high 20% to $329.7 million. Nano's industrial and academic business had a solid rebound, with industrial even outperforming our recovery expectations. Revenues for advanced X-ray, nanosurfaces, and nanoanalysis tools all grew substantially year over year. Nano's microelectronics and Semicon metrology tools continue to perform strongly with ongoing healthy demand. Finally, fluorescence microscopy revenue was up strongly year-over-year on strengthened academic demands. First half 2021 nano revenue also included a contribution from our September 2020 Canopy Biosciences acquisition with Canopy single-cell targeted proteomics tools and services. Moving on to our best segment, best revenue in the first half of 2021 grew in the mid-teens percentage, net of intercompany eliminations driven by contributions from big science projects. Best revenue from superconductors for healthcare and MRI was still below the prior year period. However, we see strengthened MRI demand for superconductors in the second half of 2021. Moving to slide eight, we continue to make very good progress with our Project Accelerate initiatives and investments. At our recent Virtual Investor Day in mid-June, we shared our strategies and goals for our potential breakout opportunities in unbiased 40 proteomics and in spatial biology and single-cell omics. as well as in our rapidly growing microbiology and molecular diagnostics business. In early June, we introduced two new TIMSTOF platform systems, the TIMSTOF Pro2 and the TIMSTOF SCP for single cell proteomics. We anticipate these instruments will further drive our growth in the fast growing and exciting proteomics market. Today, however, for a change, I would like to highlight additional important Timstof Pro2 applications in the areas of 4D four-dimensional metabolomics and 4D lipidomics research. As you will see on slide 8, we had some important new workflows and products and libraries that we launched in the second half of June after our investor day, and there was a press release on that. Very importantly, we have a new ultra-high sensitivity source for high flow rates, the VIP-AZ source that you see here on the Timstoff Pro, which generally gives us about an order of magnitude sensitivity gain and further improves or enables new applications in small molecule metabolomics and lipidomics research. We were delighted with our collaboration with Scripps on the Methin-4D Large 4D metabolomics library now with CCS or collision cross-section data at scale with more than 10,000 reference small molecule data entries in this library, all now including this very new important parameter that we can measure at scale, the CCS or collision cross-section. Because our collision cross-sections on the TIMSTOP platform are so accurately measured, they can also be precisely And we have new CCS predict software developed together with partners that use artificial intelligence and deep learning to make collision cross-sections from predictions available for even more small molecule workflows, including those in exposomics and in drug metabolites. And finally, in metabolomics, we really have outstanding tools developed organically at Brooker, our Metaboscape and TASC 2022 software tools, and they are used in a variety of applications, for instance, for the reduction of false positive identifications in 4D lipidomics, which is a very, very important aspect of how to do lipidomics. So great new developments, not only in proteomics, but also in 40 metabolomics and lipidomics. So finally, let me wrap things up here. On slide 9, at our investor day, we also noted our continued investments in operational excellence, including investments in environmental sustainability. Here we just briefly highlight the progress of our BioSpin group in reducing its carbon dioxide emissions, energy, and liquid helium consumption. For its major new facilities or renovated, expanded facilities in Germany and Switzerland, Bruker Biospin has invested in solar energy and photovoltaic and other energy-efficient systems. Biosmin's new campus in Germany has been built to the latest standard with substantially reduced carbon dioxide emissions. For its operations in Germany and Switzerland, we anticipate significant reductions, and they're summarized here, and much reduced CO2 emissions and lower overall energy consumptions. We are also at BioSpin and at VEST investing significantly in helium reliquification capacity in various locations. I won't go into the details and numbers here, but if you look at this slide in some detail, if you are interested, these are sizable investments, and they make a major difference towards environmental sustainability, something we expect of ourselves and something also our customers expect of Brooker. So, in summary, and to wrap things up, during the second quarter and first half of 2021, Bruker has delivered strongly improved performance with significant year-over-year revenue growth, margin expansion, and EPS growth. Our core businesses have rebounded strongly, and our higher growth project accelerate areas continue to deliver. We're making further investments in our Project Accelerate 2.0 and Operational Excellence initiatives, including stepped-up investments in the second half of 2021. With that, Bruker is well on track for excellent financial and strategic progress in 2021, and we are raising our fiscal year 2021 outlook for revenue growth, non-GAAP operating margin expansion, and non-GAAP EPS growth. further, as Gerald will explain, and as you can see in our press release. Now, with that, let me turn the call over to our CFO, Gerald Herman, who will review our financial performance and outlook in more detail. Gerald.