Bruker BioSciences (BRKR)

TOP CONTRIBUTORS

Isaac Middendorf

Bruker Bioscience manufactures scientific instruments for companies in life science, pharmaceutical, biotechnology, clinical and molecular diagnostics research, as well as in materials and chemical analysis. It develops products that utilize magnetic resonance technologies, mass spectrometry technologies, gas chromatography technologies, X-ray technologies, spark-optical emission spectroscopy, atomic force microscopy, stylus and optical metrology technology and infrared and Raman molecular spectroscopy technologies. They also manufacture superconducting materials and devices. Bruker Bioscience is a global company, but primarily sells it products in the Americas, Europe, and Asia. Due to the capital intense nature of its products customers may defer spending in tough economic years or to the last part of the year, leading to seasonality and unpredictable revenues.^[1]

Business Growth

For 2010 the company reported revenue of $1,304.9 million, up 17.1% as compared to 2009. This increase was due to revenues attributable to recent acquisitions, increases in sales of its core technologies, particularly in magnetic resonance, X-ray and mass spectrometry, and an increase in demand for its low temperature superconducting wire.^[1]

Trends and Forces

Bruker's revenues can fluctuate according to capital spending patterns of customers

Bruker's customers often stock up on lab consumables and equipment at the end of the year, when funding is abundant (for example, NIH funding is distributed to labs towards the end of the calendar year). They may also defer the purchase of capital intensive equipment in slow years such as the 2008 financial crisis. Bruker's revenues thus fluctuate throughout the year and are strongest in the last quarter of the calendar year. NIH funding is not completely stable, either - economic pressures may result in a stagnation of NIH funding, which has been growing at 2-3% in the past few years, but is not expected to increase in the near future. Bruker's customers from academic and government research labs are directly affected by the limitations of NIH grant funding; a lack of funding results in fewer laboratory product and equipment purchases and adversely affects Bruker's sales revenues.^[1]

Competition

Bruker competes with many companies that have signifcantly more financial, technical, and marketing capabilities. To be successful it must create products that can compete based on technolgy, speed to market, and cost. Some of its toughest competitors include^[1]:

• Agilent Technologies (A)
• Thermo Fisher Scientific (TMO)
• Mettler-Toledo International (MTD)
• Danaher (DHR)

References

1. ↑ ^{1.0 1.1 1.2 1.3} Bruker BioSciences 2011 10k