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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(MARK ONE)
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/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
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/ / TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER ___________________
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BRUKER DALTONICS INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 04-3110160
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
15 FORTUNE DRIVE, BILLERICA, MA 01821
(Address of principal executive (zip code)
offices)
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(978) 663-3660
(Registrant's telephone number, including area code)
------------------------
Check whether the registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days. Yes /X/ No / /
As of October 31, 2000 there were 54,700,000 shares of the Registrant's common
stock outstanding.
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PAGE NUMBER
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PART I FINANCIAL INFORMATION
ITEM 1: Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets as of September 30,
2000 and December 31, 1999................................ 3
Consolidated Condensed Statements of Operations for the
three months and nine months ended September 30, 2000 and
September 30, 1999........................................ 4
Consolidated Condensed Statements of Cash Flows for the nine
months ended September 30, 2000 and September 30, 1999.... 5
Notes to Consolidated Condensed Financial Statements........ 6
ITEM 2: Management's Discussion and Analysis of Financial Condition 10
and Results of Operations.................................
ITEM 3: Quantitative and Qualitative Disclosures of Market Risk..... 12
PART II OTHER INFORMATION
ITEM 1: Legal Proceedings........................................... 13
ITEM 2: Changes in Securities and use of proceeds................... 13
ITEM 3: Defaults Upon Senior Securities............................. 13
ITEM 4: Submission of Matters to a Vote of Security Shareholders.... 13
ITEM 5: Other Information........................................... 13
ITEM 6: Exhibits and Reports on Form 8-K............................ 13
SIGNATURES.................................................. 14
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2
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PART I FINANCIAL INFORMATION
BRUKER DALTONICS INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
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<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)
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ASSETS
Current assets:
Cash and cash equivalents................................. $104,464 $ 2,443
Accounts receivable, net.................................. 6,924 12,204
Due from affiliated companies............................. 4,592 --
Inventories............................................... 31,351 25,442
Other assets.............................................. 3,482 1,431
-------- -------
Total current assets........................................ 150,813 41,520
Property, plant and equipment, net.......................... 21,434 25,351
Intangible and other assets................................. 711 438
-------- -------
TOTAL ASSETS................................................ $172,958 $67,309
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings................................ $ -- $ 2,496
Accounts payable and accrued expenses..................... 9,007 12,208
Due to affiliated companies............................... 3,267 1,496
Other liabilities......................................... 17,966 13,240
-------- -------
Total current liabilities................................... 30,240 29,440
Long-term debt.............................................. 11,237 12,844
Other long term liabilities................................. 11,949 14,967
Common stock, $0.01 par value, authorized 100,000,000
shares, issued and outstanding 54,700,000 in 2000 and
45,500,000 in 1999........................................ 547 455
Other stockholders' equity.................................. 118,985 9,603
-------- -------
Total stockholders' equity.................................. 119,532 10,058
-------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................. $172,958 $67,309
======== =======
</TABLE>
See accompanying notes.
3
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BRUKER DALTONICS INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
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THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -------------------
2000 1999 2000 1999
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Product revenues........................................ $22,169 $17,243 $53,273 $42,184
Other revenues.......................................... 521 764 1,539 3,408
------- ------- ------- -------
Net revenues............................................ 22,690 18,007 54,812 45,592
COSTS AND OPERATING EXPENSES:
Cost of product revenue............................... 11,524 8,800 25,854 21,835
Sales and marketing................................... 3,321 3,122 9,060 7,888
General and administrative............................ 1,333 757 3,569 2,529
Research and development.............................. 5,935 4,264 14,551 11,372
Patent litigation costs............................... -- -- 303 538
------- ------- ------- -------
Total costs and operating expenses...................... 22,113 16,943 53,337 44,162
------- ------- ------- -------
Operating income from continuing operations............. 577 1,064 1,475 1,430
Other income (expenses), net............................ 613 (225) 289 (525)
------- ------- ------- -------
Income from continuing operations before provision for
income taxes.......................................... 1,190 839 1,764 905
Provision for income taxes.............................. 609 445 928 480
------- ------- ------- -------
Income from continuing operations....................... 581 394 836 425
Income from discontinued operations, net of income
taxes................................................. 52 75 184 266
------- ------- ------- -------
NET INCOME.............................................. $ 633 $ 469 $ 1,020 $ 691
======= ======= ======= =======
NET INCOME PER SHARE--BASIC AND DILUTED INCOME FROM
CONTINUING OPERATIONS................................. $ 0.01 $ 0.01 $ 0.02 $ 0.01
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME
TAXES................................................. 0.00 0.00 0.00 0.01
------- ------- ------- -------
NET INCOME.............................................. $ 0.01 $ 0.01 $ 0.02 $ 0.02
</TABLE>
See accompanying notes.
4
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BRUKER DALTONICS INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
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NINE MONTHS ENDED
SEPTEMBER 30,
-------------------
2000 1999
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Net cash provided by continuing operations.................. $ 160 $ 4,669
Net cash provided by discontinued operations................ 69 466
-------- -------
Net cash provided by operating activities................... 229 5,135
INVESTING ACTIVITIES
Purchases of property and equipment......................... (1,995) (2,400)
Acquisition of business, net of cash acquired............... (85) --
-------- -------
Net cash used in investing activities....................... (2,080) (2,400)
FINANCING ACTIVITIES
Proceeds from issuance of common stock...................... 109,702 --
Proceeds from short-term borrowings......................... 4,464 2,102
Payments on short-term borrowings........................... (6,851) --
Payments to affiliated companies, net....................... (3,265) (4,767)
-------- -------
Net cash provided by (used in) financing activities......... 104,050 (2,665)
Effect of exchange rate changes............................. (178) (20)
-------- -------
NET CHANGE IN CASH AND CASH EQUIVALENTS..................... 102,021 50
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............ 2,443 1,135
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $104,464 $ 1,185
======== =======
</TABLE>
SEE ACCOMPANYING NOTES.
5
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BRUKER DALTONICS INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
Bruker Daltonics Inc. and its wholly-owned subsidiaries (the "Company")
design, manufacture and market proprietary life science systems based on its
mass spectrometry core technology platforms. The Company also sells a broad
range of field analytical systems for substance detection and pathogen
identification. The Company maintains major technical centers in Europe, North
America and Japan. Bruker Daltonics allocates substantial capital and resources
to research and development and is party to various collaborations and strategic
alliances. The Company's diverse customer base includes pharmaceutical companies
and biotechnology companies, academic institutions and government agencies.
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation. The consolidated condensed
financial statements as of September 30, 2000 and for the three and nine months
ended September 30, 1999 and 2000 have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information and with Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and nine months ended September 30,
2000 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2000.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's registration statement on Form S-1
for the year ended December 31, 1999.
2. INVENTORIES
The components of inventories were as follows:
(in thousands)
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SEPTEMBER 30, DECEMBER 31,
2000 1999
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(UNAUDITED)
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Raw materials....................................... $ 8,600 $ 5,850
Work-in-process..................................... 11,722 10,776
Finished goods...................................... 11,029 8,816
------- -------
$31,351 $25,442
======= =======
</TABLE>
6
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BRUKER DALTONICS INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
3. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net earnings by the
weighted-average number of common shares outstanding during the period. The
diluted earnings per share computation includes the effect of shares which would
be issuable upon the exercise of outstanding stock options, reduced by the
number of shares which are assumed to be purchased by the Company from the
resulting proceeds at the average market price during the period.
The following table sets forth the computation of basic and diluted average
shares outstanding for the periods indicated.
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THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -------------------
2000 1999 2000 1999
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Average shares outstanding--basic........................... 51,261 45,500 47,434 45,500
Net effect of dilutive stock options--based on treasury
stock method.............................................. 628 -- 628 --
------ ------ ------ ------
Average shares outstanding--diluted......................... 51,889 45,500 48,062 45,500
</TABLE>
4. COMPREHENSIVE INCOME (LOSS)
Total comprehensive income (loss) was $(277) and $(492) for the three and
nine months ended September 30, 2000 and $793 and $(125) for the three and nine
months ended September 30, 1999.
5. STOCK SPLIT
On February 14, 2000, the Board of Directors of Bruker Daltonics Inc.
authorized a seven-for-one stock split in the form of a stock dividend.
Shareholders of record received six additional shares of common stock for every
share they owned. All common shares and per share data in the accompanying
financial statements have been restated to reflect the stock split.
6. STOCK OPTIONS
In February 2000, the Board of Directors adopted and the Stockholders
approved the 2000 Stock Option Plan ("the Plan"). The Plan provides for the
issuance of up to 2,188,000 shares of Common Stock in connection with stock
options or other awards under the Plan. The Plan allows a committee of the Board
of Directors (the "Committee") to grant incentive stock options, non-qualified
stock options, stock appreciation rights and stock awards (including the use of
restricted stock and phantom shares). The Committee has the authority to
determine which employees will receive the rewards, the amount of the awards,
and other terms and conditions of the award. In February 2000, the Committee
granted stock options for 783,135 shares of common stock, which vest over
three-to-five year periods.
7. DISCONTINUED OPERATIONS
In 1999, the Company decided to discontinue its Fourier Transform-Infrared
(FT-IR) business. The FT-IR business unit sells and services FT-IR instruments
to a variety of markets outside the Company's core technology platform of mass
spectrometry. The Company completed the sale of its FT-IR business to Bruker
Optik GmbH, an affiliated entity, in the first half of 2000 for a price which
approximates the net book value of the assets and liabilities of the business.
7
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BRUKER DALTONICS INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
8. CONTINGENCIES
The Company's wholly-owned subsidiary, Bruker Daltonik GmbH, has a $5.1
million and $5.8 million accrued liability at September 30, 2000 and December
31, 1999, respectively, related to certain patent infringement litigation filed
by a competitor. In 1997, the competitor initiated an action in the United
States District Court of Massachusetts alleging patent infringement against the
Company and Hewlett-Packard. The competitor also filed a request for an
investigation of its patent infringement claims with the United States
International Trade Commission (ITC) and has filed suit against the Company in
Germany. In 1998, the ITC found in favor of the Company and in 1999 the Court of
Appeals for the Federal Circuit confirmed, in part, the ITC decision in favor of
the Company. The competitor has filed patent infringement suits related to the
same patents litigated in front of the ITC in Massachusetts Federal Court,
against which the Company has filed summary judgment motions of non-infringement
and non-validity, respectively. In 1999, the Company filed an antitrust suit
against the competitor in Massachusetts Federal Court. The Company believes that
it has meritorious defenses to the competitor's claims and intends to vigorously
defend itself. Related litigation against the same competitor is presently
pending in various courts in Germany. The Company is presently not permitted to
sell ion traps in Germany, but has appealed this decision, and also has
challenged the validity of the competitor's patents involved in the German
patent court in Munich. Decisions on the above matters are expected in 2001.
Based on a review of the current facts and circumstances, management of the
Company and its subsidiary believe that the amount of the accrued liability is a
reasonable estimate of the exposure to loss associated with these matters,
representing, principally, anticipated legal fees. While acknowledging the
uncertainties of litigation, the Company believes that these matters will be
resolved without a material effect on the Company's financial position or
results of operations. However, an unfavorable outcome of these matters could
result in a material adverse impact on the Company's financial statements,
although an estimate of such impact cannot be made.
Other lawsuits, claims and proceedings of a nature considered normal to its
businesses may be pending from time to time against the Company and its
subsidiary. The Company believes the outcome of these proceedings, if any, will
not have a material impact on the Company's financial position or results of
operations.
9. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS"). SFAS No. 133 establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments, embedded in other contracts, and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. In July 1999, the FASB issued Statement of Financial Accounting
Standards No. 137 Accounting for Derivative Instruments and Hedging Activities-
Deferral of the Effective Date of FASB Statement No. 133 ("SFAS 137"). SFAS 137
deferred the effective date of SFAS 133 until the first fiscal year beginning
after June 15, 2000. We will adopt the standard during January 2001. Management
believes that SFAS 133 will not have a material effect on the financial position
or results of operation of the Company.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements," or
SAB 101, which provides guidance on the
8
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BRUKER DALTONICS INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
9. RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
recognition, presentation, and disclosure of revenue in financial statements
filed with the SEC. SAB 101 outlines the basic criteria that must be met to
recognize revenue and provides guidance for disclosures related to revenue
recognition policies. The Company's revenue recognition policy is in compliance
with the provisions of SAB 101.
10. SUBSEQUENT EVENTS
On September 12, 2000 the Company entered into a strategic alliance
agreement with Geneva Proteomics, Inc. ("GeneProt"). Under the agreement,
GeneProt will purchase 51 mass spectrometry systems, as well as consumables and
support. The Company will also make a strategic equity investment, in both cash
and stock, in GeneProt, and both companies will collaborate and share
technologies for industrial-scale proteomics. The Company, as part of the equity
investment, will invest $7 million in cash and $3 million in the Company's own
stock. The consummation of this equity transaction is expected to occur during
the fourth quarter 2000.
9
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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
PRODUCT REVENUE. Total product revenue for the three months ended September
30, 2000 increased $5 million, or 28.6%, to $22.2 million compared to $17.2
million in 1999. Life science systems revenue and substance detection systems
revenue as a percentage of product revenue was 65% and 20%, respectively, in
2000 as compared to 55% and 45%, respectively, in 1999. The increase in product
revenue in 2000 was fueled by a continuing strong demand for our life science
products in various product lines by new and existing customers.
Product revenue for the nine months ended September 30, 2000 increased $11.1
million, or 26%, to $53.3 million compared to $42.2 million in 1999. Life
science product revenue and substance detection product revenue as a percentage
of product revenue was 62% and 28%, respectively, in 2000 as compared to 49% and
51%, respectively, in 1999.
OTHER REVENUE. Other revenue for the three months ended September 30, 2000
decreased $243,000, or 32%, to $521,000 compared to $764,000 in 1999. This
decrease was due to the completion of certain projects for early-stage research
and development which were funded by grants from the German government and the
Advanced Technology Program of the National Institute of Standards and
Technologies in the United States. While we historically have obtained
significant funding under grant awards for early-stage research and development
activity, we anticipate this funding will be significantly reduced in the
future, since these grants are typically provided to small or private companies
with limited access to capital.
Other revenue for the nine months ended September 30, 2000 decreased $1.9
million, or 54.9%, to $1.5 million in 2000 compared to $3.4 million in 1999.
COST OF PRODUCT REVENUE. Cost of product revenue for the three months ended
September 30, 2000 increased $2.7 million, or 31%, to $11.5 million compared to
$8.8 million in 1999. The cost of product revenue as a percentage of product
revenue was 52% in 2000 as compared to 51% in 1999. The increase for the quarter
relates to an increase in sales to our strategic alliance partners, which tend
to have lower gross margins. Certain initial set-up production charges in our
Switzerland facility and the related expansion of our production personnel in
our German facilities also contributed to this increase.
Cost of product revenue for the nine months ended September 30, 2000
increased $4 million, or 18.4%, to $25.9 million compared to $21.8 million in
1999. The cost of product revenue as a percentage of product revenue was 48.5%
in 2000 as compared to 51.8% in 1999. This decrease is due to a combination of
stronger revenues from new life science products which have a lower cost of
product revenue, increased efficiencies in the manufacturing operations
throughout the year and lower material costs driven by an increase in volume
discounts.
SALES AND MARKETING. Sales and marketing expenses for the three months
ended September 30, 2000 increased $200,000, or 6.4%, to $3.3 million compared
to $3.1 million in 1999. Sales and marketing expenses as a percentage of net
revenues were 14.6% in 2000 and 17.3% in 1999.
Sales and marketing expenses for the nine months ended September 30, 2000
increased $1.2 million, or 15%, to $9.1 million compared to $7.9 million in
1999. The dollar increase was due to higher sales commissions earned by our
direct sales force as a result of an increase in the number of units sold and
the addition of a few distribution subsidiaries not in operation during the nine
months ended September 30, 1999. Sales and marketing expenses as a percentage of
net revenues were 16.5% in 2000 and 17.3% in 1999.
10
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GENERAL AND ADMINISTRATIVE. General and administrative expenses for the
three months ended September 30, 2000 increased $575,000, or 76%, to
$1.3 million compared to $757,000 in 1999. As a percentage of net revenues,
general and administrative expenses increased to 5.9% in 2000 as compared to
4.2% in 1999, as a result of approximately a $237,000 non-cash charge to
compensation expense related to our stock option grants as well as various other
charges related to being a public company.
General and administrative expenses for the nine months ended September 30,
2000 increased $1.1 million, or 41%, to $3.6 million compared to $2.5 million in
1999. As a percentage of net revenues, general and administrative expenses
increased to 6.4% in 2000 and 5.5% in 1999. The increase relates to various
charges incurred as a result of becoming a public company.
RESEARCH AND DEVELOPMENT. Research and development expenses for the three
months ended September 30, 2000 increased $1.6 million, or 39.2%, to $5.9
million in 2000 compared to $4.3 million in 1999. As a percentage of net
revenues, research and development expenses increased to 26.2% in 2000 compared
to 23.7% in 1999. The dollar increase in 2000 was due to increased staffing and
the related personnel costs and late stage testing costs incurred for our new
products scheduled for introduction in early 2001. In addition, a few new major
development projects have been started for newer products and applications,
primarily in proteomics and SNP genotyping.
Research and development expenses for the nine months ended September 30,
2000 increased $3.2 million, or 28%, to $14.6 million compared to $11.4 million
in 1999. As a percentage of net revenues, research and development expenses
increased from 24.9% in 1999 to 26.5% in 2000.
OTHER INCOME (EXPENSES), NET. Other income, net for the three months ended
September 30, 2000 was $613,000, compared to an other expense, net of $(225,000)
in 1999. The difference relates to the additional funding raised in our equity
offering during the third quarter of 2000 and the payoff of our outstanding
short-term lines of credit both in the United States and Germany.
Other income, net for the nine months ended September 30, 2000 was $289,000
as compared to an other expense, net of $(525,000) in 1999.
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES. Income from
discontinued operations net of income taxes for the three months ended
September 30, 2000 decreased $23,000, or 31%, to $52,000 compared to $75,000 in
1999. Income from discontinued operations is related to the disposal of our
infrared sales group in March 2000.
Income from discontinued operations net of income taxes for the nine months
ended September 30, 2000 decreased $82,000, or 31.1%, to $184,000 compared to
$266,000 in 1999.
LIQUIDITY AND CAPITAL RESOURCES
Presently, we anticipate that our existing capital resources and the
proceeds from our equity offering will meet our operating and investing needs
through the end of 2001. Historically, we have financed our growth through a
combination of cash provided from operations, debt financing and issuance of
common stock. During 2000, net cash provided by operating activities was
$229,000, primarily as a result of net income for the period and the interest
income generated from the increase in cash and cash equivalents from our equity
offering in the third quarter.
We used $2 million of cash during the first nine months of 2000 for capital
expenditures. Such capital expenditures were made to improve productivity and
expand manufacturing capacity. We expect to continue to make capital investments
focused on enhancing the efficiency of our operations and supporting our growth.
11
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Other current assets increased at September 30, 2000 as compared to December
31, 1999. The increase in other current assets was principally due to an
increase in prepaid expenses, a VAT receivable in Germany and the timing of
other receivables.
In August 1999, we entered into a revolving line of credit with Citizens
Bank in the United States in the amount of $2.5 million. As of September 30,
2000 there were no amounts outstanding. This line, which is secured by portions
of our inventory, receivables and equipment in the United States, was used to
support working capital and expires July 31, 2001. We also maintained revolving
lines of credit of approximately $6.2 million with German banks. As of September
30, 2000 there were no amounts outstanding. Our German lines of credit are
unsecured.
No material capital expenditure commitments were outstanding as of September
30, 2000.
Our future capital uses and requirements depend on numerous factors,
including our success in selling our existing products, our progress in research
and development, our ability to introduce and sell new products, our sales and
marketing expenses, our need to expand production capacity, costs associated
with possible acquisitions, expenses associated with unforeseen litigation,
regulatory changes, and competition and technological developments in the
market.
FORWARD LOOKING INFORMATION
The matters discussed in this report contain forward-looking statements that
involve risks and uncertainties. The Company's actual results could differ
materially from those discussed herein. Such statements are made pursuant to the
safe harbor provisions of the "Private Securities Litigation Reform Act of
1995." The preceding discussion of the financial condition and results of
operations of the Company should be read in conjunction with the interim
condensed consolidated financial statements and the notes thereto included in
Part I, Item I of this Quarterly Report on Form 10-Q and the consolidated
financial statements and notes thereto contained in the Company's Prospectus
dated August 3, 2000.
IMPACT OF FOREIGN CURRENCIES
We sell our products in many countries and a substantial portion of our
sales and a portion of our costs and expenses are denominated in foreign
currencies, especially in Euro. Historically, our realized foreign exchange
gains and losses have not been material. Accordingly, we have not hedged our
foreign currency position in the past. However, as we expand our sales
internationally, we plan to evaluate our currency risks and we may enter into
foreign exchange contracts from time to time to mitigate foreign currency
exposure.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
The information called for by this item is provided under the captions
"Liquidity and Capital Resources" and "Impact of Foreign Currencies" under
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations.
12
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PART II OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
Information with respect to this item is incorporated by reference to the
Note 8 of the Notes to Consolidated Condensed Financial Statements under Item I
of Part I of this Report on Form 10-Q, which Note begins on page 8 hereto.
ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS
On August 3, 2000, a registration statement on Form S-1 (No. 333-34820) was
declared effective by the Securities and Exchange Commission, pursuant to which
9,200,000 shares of our common stock were offered and sold by us at a price of
$13 per share, generating gross offering proceeds of approximately $119.6
million. The managing underwriters were UBS Warburg LLC, CIBC World Markets and
Thomas Weisel Partners LLC. In connection with the offering, we incurred $8.4
million in underwriting discounts and commissions, and approximately
$1.5 million in other related expenses. The net proceeds from the offering,
after deducting the foregoing expenses, were approximately $110 million. We have
used a portion of the net proceeds of the offering to fund our continuing
research and development activities and for working capital and other general
corporate purposes. Additionally, we have used approximately $7 million of the
net proceeds to pay off a portion our outstanding bank debt.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY SHAREHOLDERS
None.
ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27.1 Financial Data Schedule
(c) Current Reports on Form 8-K.
We did not file any reports on Form 8-K during the quarter ended
September 30, 2000.
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C> <C>
BRUKER DALTONICS INC.
By:
-----------------------------------------
Frank H. Laukien, Ph.D.
PRESIDENT, CHAIRMAN, CHIEF EXECUTIVE
OFFICER, AND DIRECTOR (PRINCIPAL EXECUTIVE
Date: November , 2000 OFFICER)
By:
-----------------------------------------
John J. Hulburt, CPA
CORPORATE CONTROLLER AND TREASURER
(PRINCIPAL FINANCIAL AND ACCOUNTING
Date: November , 2000 OFFICER)
</TABLE>
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