Bruker Forecasts $12 Million in Foreign Exchange Losses
This loss is largely related to the acquisition of Bruker BioSpin, and thus is unlikely to reoccur. Bruker’s extensive manufacturing and operational presence in Europe makes it more vulnerable to currency changes than some of its competitors. Bruker’s stock fell 23% the day following the announcement as the company’s first-quarter revenue estimate was below analysts’ forecasts.
Billerica, MA 4/21/08—Bruker has announced it will incur approximately $12 million in pretax foreign exchanges losses in the first quarter, which are forecasted to reduce EPS by approximately $0.06 cents after tax. The company attributed the losses to the weakening of the US dollar and an unexpected strengthening of the Swiss Franc in the five weeks between the closing of the acquisition of Bruker BioSpin and the end of the quarter. The losses relate primarily to the revaluation of inter-company receivables, large cash balances in non-CHF currencies held by Swiss BioSpin subsidiaries, and a short-term, inter-company loan from a Swiss to a German Bruker subsidiary that was used in part to finance the acquisition. To address future currency effects, Bruker has hired a treasurer and will institute a program to hedge or settle inter-company balances. The company also plans to reduce nonfunctional currency holdings and accelerate its pay-down of the $183 million CHF- and Euro-denominated portions of its senior credit facility. The company expects first-quarter sales of $235–$240 million.
