Bruker Corporation

Good morning, everyone, and welcome to the Brooker's first quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please see no conference specialists 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 and then one. To withdraw your questions, you may press star and two. Please also note that today's event is being recorded. At this time, I'd like to turn the conference call over to Justin Ward, Senior Director of Investor Relations and Corporate Development. Sir, please go ahead.

Thank you, and good morning. I would like to welcome everyone to Brooker Corporation's first quarter 2022 earnings conference call. My name is Justin Ward, and I am Brooker's 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 CFO. In addition to the earnings release we issued earlier today, during today's conference call, we will be referencing a slide presentation that can be downloaded from the Events and Presentations section of Brooker's Investor Relations website. During today's call, we will 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.bruker.com. Before we begin, I would like to reference Bruker's safe harbor statement, which is shown on slide two of the presentation. During this conference call, we will make forward-looking statements regarding future events and financial and operational performance of the company that involve risks and uncertainties. including those related to geopolitical risks, the COVID-19 pandemic, and supply chain logistics and inflation challenges. 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 for the period ending December 31, 2021, as updated by our other SEC filings which are available on our website and on the SEC's website. Also, please note that the following information is based on current business conditions and to our outlook as of today, May 4th, 2022. We do not intend to update our forward-looking statements based on new information, future events, or for other reasons, except as may be required by law. Prior to the release of our second quarter 2022 financial results, expected in early August 2022. You should not rely on these forward-looking statements as necessarily representing our views or outlook as of any date after today. We will begin today's call with Frank providing an overview of our business progress. Gerald will then cover the financials for the first quarter in more detail and share our updated fiscal year 2022 financial outlook. Now, I'd like to turn the call over to Brooker CEO, Frank Lauksy.

Thanks, Justin. Good morning, everyone, and thank you for joining us on today's first quarter 2022 earnings call. If you go to slide four, you can see that broker's solid 10.5% organic revenue growth in the first quarter and even stronger organic bookings growth represent a good performance in light of challenges with a war in Ukraine and lockdowns in China. As a reminder, we do not have any manufacturing operations in China. Excellent demand for our differentiated high-value scientific instruments and life science solutions resulted in continued strong momentum in organic bookings and revenue growth despite a supply chain and logistics drag. For the first quarter of 2022, our broker scientific instruments or BSI segment bookings were up strongly with all four broker groups with double digits percentage organic bookings growth and our BSI book-to-bill ratio greater than 1.1. Brokers Q122 revenues increased 7.3% year-over-year to $595 million. with a currency headwind of minus 4.2%. On an organic basis, revenues increased 10.5%, which included 9.5% organic growth in BSI and 21% at best net of intercompany eliminations, while growth from acquisitions added about 1%. This implies constant exchange rate growth of 11.5% year-over-year. Our first quarter 22 non-GAAP gross margin increased 140 bps year-over-year to 52.7%, while non-GAAP operating margin was 19.5%, an increase of 110 bps year-over-year. Gross margin expansion was partially offset by planned investments in commercial and R&D capabilities as well as by supply chain logistics and inflation headwinds, which more than offset currency tailwinds. In the first quarter of 2022, Bruker reported gap-diluted EPS of 41 cents compared to 37 cents reported in Q1 of 21. On a non-gap basis, Q1 2022 diluted EPS was 49 cents an increase of 11.4% from $0.44 in the first quarter of 2021. Our trailing 12-month return on invested capital was 27.6%, which puts us among the leaders in our industry. We believe this is the result of our strong broker management process and our focus on disciplined entrepreneurialism and organic growth supplemented by selected bolt-on and technology acquisitions. In summary, the first quarter of 2022 was a quarter with broad-based demand strength across virtually all broker businesses with double-digit organic bookings growth as well as further investments in Project Accelerate 2.0 plus investments in our recent acquisitions in additional proteomics, biopharma, and applied markets capabilities in the first quarter as well as in April. Please turn to slides five and six now where we highlight the first quarter 22 performance of our three scientific instruments groups and of our best segment, all on a constant currency and year-over-year basis. In the first quarter of 22, The BioSpin group revenue was 158 million and grew in the low single digits percentage. BioSpin faced a difficult comparison as they were two gigahertz class NMRs in the first quarter of 21 with none in the first quarter of 22. We continue to expect four gigahertz class NMRs in revenue in 2022 with a 1.2 gigahertz system just accepted in April, so this will be in Q2 revenue. BioSpin saw robust growth in revenues in our preclinical imaging business, and BioSpin achieved double-digit bookings growth. BioSpin innovations of note include our compact single-story Ascend Evil 1.0 gigahertz magnet, to give more structural biology and drug discovery labs access to gigahertz technology. And on the other end of the spectrum, if you like, we also launched and advanced new capabilities on our bench top Fourier 80 FTNMR system to enable broader applications, particularly in pharmaceutical and applied markets analysis. Moving on to CALIT for the first quarter of 22, the CALIT group revenue of 203 million increased in the low double digits percentage with strong growth in microbiology and molecular spectroscopy. Our TIMSTOF platform continues its adoption in 4D proteomics, epiproteomics, and multiomics. And in Q2, we announced key further capability enhancements for the TIMSTOF platform and had excellent year-over-year bookings growth. Microbiology revenue delivered strong growth driven by demand for multi-biotyper systems and consumables. This was coupled with a gradual recovery of our tuberculosis molecular diagnostics product platform. We are excited about the launch of our MitPlex PCR liquid array next generation syndromic panels at the ECMIT 2022 conference in April. with more of these liquid array panels and assays to come. Please turn to slide six now. First quarter 2022 Pruker Nano revenue was $179 million and grew in the high teens percentage. Nano's academic, industrial, and semiconductor metrology markets all remain strong. Revenue for our Nano advanced X-ray and Nano surfaces tools delivered strongly strong growth in the quarter, and Nano's microelectronics and semiconductorology tools performed very well with strong bookings and backlog. Our life science fluorescence microscopy revenue was up sharply on product innovation and strong research demand. We note that our Canopy subsidiary launched the next generation CellScape chips cytometry instrument for high throughput in C2 spatial biology with subcellular resolution and outstanding quantitation with a 10 to the 8 dynamic range. Very unique. Finally, first quarter best revenues grew in the hot 20s percentage net of intercompany eliminations driven by share gains and strong superconductor demand by our MRI OEM customers. Best demand appears very healthy. but we experienced supply chain challenges. Moving to slide seven and eight, we continue to make good progress with our Project Accelerate 2.0 initiatives, which in 2021 represented 54% of total revenues. On slide seven, we highlight our very recent introduction of the compact single-story ultra-high field NMR magnet called the Ascend EVO 1.0 gigahertz. It's really quite a technological marvel that being able to put that into a single story lab will provide many more structural biology and drug discovery researchers access to these enabling functional structural biology capabilities of gigahertz NMR. So this is no longer for national labs only, but really for PI and co-PI grants and as well as for biopharma customers. This is a result of the key hybrid technologies we've developed at 1.2 gigahertz for high temperature superconductors operating in this case at 4.2 Kelvin, which is convenient and also reduces helium consumption by a factor of three. That's very, very significant and very timely. So very exciting new technology. Moving on to slide eight, where we talk about Project Accelerate 2.0, our nanotechnology initiative, and here in particular, semiconductor metrology and microelectronics. I'm certainly not going to go through all the bullets on that slide. I just wanted to remind you this business, including display package data storage and semiconductor metrology, was about 7% of our BSI segment revenues in 2021. And it was up again in up in the high teens year over year in 2021 and up in the low 20s in year over year in Q1 of 2022. So strong growth business tends to have very good margins. And here are two examples. One is for next generation chip manufacturing using X-ray diffraction tools that are quite unique. And on the right, something more on 3D chips that require advanced packaging quality control where we have very unique tools that you probably don't see from us every day, but that are absolutely crucial and enabling for a lot of these new packaging technologies that affect so much of our lives. All right, enough technology after that outlook. In summary, Bruker continues to experience strong demand for our differentiated instruments and solutions across our portfolio. Our project accelerates 2.0 high-growth, high-margin initiatives perform well, and we reiterate our intention to ramp investments for accelerated growth, for example, in proteomics, in spatial biology, in biopharma and applied, as well as in nanotechnology and semiconmetrology. Really firing on many cylinders or all cylinders here. I'm pleased with how well our teams have executed in a challenging supply chain and logistics environment. We benefit from being able to manage a high backlog to navigate that environment very well. And as we move through fiscal year 2022, our high backlog gives us good visibility on growth. So let me now turn the call over to our Chief Financial Officer, Gerald, who will review Brooker's Q1 financial performance and then raise fiscal year 2022 outlook in more detail. Gerald.