Government stimulus spending intended to jumpstart the global economy could eventually pump an extra $200 million — or possibly more — of new revenue into Bruker Corp.’s coffers, company executives predicted Wednesday.
With scores of existing and potential Bruker clients angling for government-sponsored grants and program funds, Bruker CEO Frank Laukien said the company anticipates a sizable increase in future sales, once stimulus recipients start buying new scientific equipment.
“We believe it will be a significant number,” Laukien told analysts on a conference call. But Laukien also cautioned he was not yet prepared to provide a more exact estimate of the likely impact “because it’s still too early to tell what the batting average” may be for clients seeking stimulus funding.
Still, Laukien and other company officials said it’s possible stimulus spending in the United States and other countries could lift Bruker sales by as much as 20 percent over the next several quarters. Based on total company revenues of $252.2 million during the three months ended June 30, a 20-percent boost would mean an additional $200 million annually for 2010 and beyond.
Billerica, Mass.-based Bruker manufactures analytic tools such as X-ray systems, spectrometers and magnetic resonance instruments. Sales to medical schools, universities, government and non-profit entities represented roughly two-thirds of the company’s $975 million in revenues last year, with life science and research systems equipment combining for another 15 percent of overall sales.
Net income for the period was $12.9 million, or 8 cents per share, marking an $8.8 million decline from the $21.7 million in profits posted in the year-ago quarter. Through the first six months of the year, net income was nearly flat, reaching $21.3 million, compared with $20.9 million posted during the June 2008 quarter.
CFO Bill Knight told analysts on the call that while the company obviously hasn’t dodged the effects of the global recession, much of the decline in sales and net income during the recent quarter could be blamed on outsized gains made during the second quarter of 2008.
“We expect the global government stimulus programs to have a positive impact on our high-end life science and research systems business, as well as on our new Bruker Energy & Supercon Technologies division, starting in the second half of 2009, accelerating in 2010, and continuing into 2011,” Knight said.
Laukien said a company analysis of stimulus grant applications indicates that U.S. government spending could lift sales by between 8 percent to 10 percent in future quarters. About half of that increase is expected to come through new research projects by the National Institutes of Health. Stimulus spending in Europe, Japan, China and other countries could contribute up to another 10 percent sales boost, he said.
Bruker is already realizing some gains from stimulus spending, he added, with the BEST division marking the first sale of its new Elexsys E780 spectrometer earlier this month to a solar energy research lab in Berlin, Germany. List price for the device tops $2.2 million.
