The good news for Bruker BioScience Corp. is that it plans to aggressively invest in R&D efforts and expand into new markets. The bad news is that the company must cut jobs, freeze salaries and cut back on discretionary spending to do it.
“We were not satisfied with our operating margin trends in 2008,” CEO Frank Laukien said in a March 3 conference call with investors. “Our focus in 2009 is on cost-cutting and gross margin improvement, but we also intend to take advantage of new opportunities in the current market using our industry-leading products to continue to gain market share.”
Laukien said the cost-cutting began in the third quarter of 2008, but did not specify how many workers were laid off, according to the transcript posted on the Seeking Alpha website.
Bruker employed about 2,200 employees worldwide, with about 420 working in the U.S, according to its 2007 annual report.
The Billerica-based company, which makes a wide array of scientific instruments, reported $315 million in fourth-quarter sales for the three-months ended Dec. 31, 2008, compared with $344 million during the same period in 2007.
Analysts had predicted sales in the $311 million range. The 8 percent sales dip, combined with acquisition costs and unfavorable foreign currency exchange rates, delivered a hit to the company’s bottom line — Bruker books about 50 percent of its revenues from foreign markets.
The firm reported net income of $26 million for the 2008 fourth quarter, compared to $40 million for the same period during the prior year.
But sales rose for the full year, reaching $1.1 billion in compared to just over $1 billion during 2007. The uptick wasn’t reflected in the bottom line, however; annual net income came in just above $40 million, compared to $98 million during 2007.
Bruker’s cash burn rate was significantly higher than in 2007, with the company dropping some coin on the expansion of two manufacturing locations in France and Germany and paying off significant amounts of debt.
The company repaid roughly $187 million of the debt incurred to finance its February 2008 Bruker BioSpin Group acquisition. As of Dec. 31, 2008, Bruker had cash and cash equivalents of $167.7 million, compared to $344 million from the same period during the prior year.