Joshua Young - VP, IR Frank Laukien - President & CEO Charlie Wagner - EVP & CFO.

Tim Evans - Wells Fargo Securities Steve Willoughby - Cleveland Research Company Brandon Couillard - Jefferies Dan Leonard - Leerink Anne Edelstein - Bank of America Merrill Lynch Chris Lin - Cowen and Company Tycho Peterson - JPMorgan Isaac Ro - Goldman Sachs Dane Leone - BTIG Dan Arias - Citigroup Amanda Murphy - William Blair & Company Jon Groberg - UBS Sung Ji Nam - Cantor Paul Knight - Janney Capital Bryan Brokmeier - Maxim Group Eric Criscuolo - Mizuho.

Welcome to Bruker's First Quarter 2015 Earnings Conference Call. [Operator Instructions]. At this time, I'd like to turn the conference call over to Mr. Joshua Young. Sir, please go ahead..

Thank you very much, Jamie. Good afternoon. I'd like to welcome everyone to Bruker's first quarter 2015 earnings conference call. My name is Joshua Young and I'm the Vice President of Investor Relations for Bruker.

Joining me on today's call are Frank Laukien, our President and CEO; and Charlie Wagner, Bruker's Executive Vice President and Chief Financial Officer. In addition to the earnings release we issued earlier today, we will be referencing a slide presentation as part of today's conference call.

The PDF of this presentation can be downloaded by clicking on earnings release hyperlink on Bruker's Investor Relations website. During today's call we will be highlighting non-GAAP financial information. A reconciliation our GAAP to our non-GAAP financial statements is included in our earnings release and in our webcast presentation.

Before we begin, I'd like to reference Bruker's Safe Harbor statement which I show on slide 2. During the course of this conference call, we will be making forward-looking statements regarding future events or the financial performance of the company that involve risks and uncertainties.

The company's actual results may differ materially from the projections described in such statements. Factors that might cause such differences include but are not limited to those discussed in today's earnings release and in our Form 10-K, as well as other subsequent SEC filings.

Also note that the following information is related to current business conditions and our outlook as of today, May 6, 2015. Consistent with our prior practice, we do not intend to update our projections based on new information, future events or other reasons, prior to the release of our second quarter 2015 financial results in early August.

We will begin today's call with Frank providing a business summary. Charlie will then cover our financials for the first quarter in more detail. Now, I'd like to turn the call over to Bruker's CEO, Frank Laukien..

Thank you, Joshua. Good afternoon and thank you for joining us on the call today. I apologize for my voice, but I have a bit of a spring cold. I'll begin my presentation on slide 4. Bruker delivered solid growth in non-GAAP operating income, non-GAAP EPS and free cash flow, despite lower revenues in the first quarter of 2015.

The lower revenues were largely expected and were the result of significant currency headwinds, our product line divestitures from our CAM division and weaker NMR demand throughout 2014. For the first quarter of 2015, we reported revenues of $354 million which was a decline of $70 million or 16.6% from Q1 of 2014.

Foreign exchange rates reduced our revenue by $47 million or 11% and our CAM divestitures reduced our revenues by $12 million or 2.7% compared to Q1 2014. After adjusting for these items, we reported an organic revenue decline of 3% in Q1 2015, largely due to lower NMR revenue as a result of weaker demand last year.

While NMR revenues were lower in the quarter, new order bookings for NMR in Q1 2015 were healthy, in part because of business that we picked up after Agilent's exit from NMR. Both our NANO and CALID groups performed as expected, delivering low-single digit organic revenue growth year over year during the first quarter of 2015.

From a geographic perspective, revenues in Europe and the Americas remained steady, while we saw weakness in parts of Asia and the IMEA, India, Middle East, Africa regions. I'll speak more about this later in the call. Our non-GAAP EPS faced a headwind of approximately $0.02 compared to Q1 2014 due to changes in foreign exchange rates.

Nonetheless, we reported non-GAAP EPS on $0.14 in Q1 of 2015 which represented 27% year-over-year growth. This increase in our non-GAAP EPS was driven by both the positive effects from our CAM restructuring and many of the operational and commercial initiatives we have put in place over the past couple of years.

I was pleased that many of our divisions posted solid improvement in gross margins during the quarter. This is both the result of a positive mix in our business and the benefits from driving better pricing, procurements, outsourcing and footprint consolidation initiatives.

I am pleased that our restructuring initiatives are starting to have a meaningful effect on our P&L. Please turn to slide 5 and 6 where I will now provide additional details about the performance of our 3 groups and our best segment in Q1 of 2015.

Let me begin with our BioSpin Group which had a difficult first quarter, largely because of weaker NMR demand in 2014, but also because of some delayed revenue in our BioSpin PCI or preclinical imaging division, due to customers not being ready for installation and thus not be able to accept deliveries in Q1 of 2015 yet.

I mentioned earlier that NMR bookings were healthy in Q1. This is a positive sign, but I should remind you that it takes a long time to convert new order bookings into revenue in the NMR business. Therefore, we'd like to observe orders further into 2015 before assessing whether we have turned the quarter in NMR.

At the beginning of 2015, BioSpin put in place new pricing practices which we believe will start to positively benefit BioSpin's gross margin over time, but which potentially may delay some orders in the short-term.

As we previously discussed the BioSpin magnetic resonance spectroscopy or MRS division, is also finalizing its rightsizing and footprint alignment restructuring plans. We've made good progress with this in the first quarter of 2015, at least outside of Germany and France.

In the latter two countries, we expect to complete our negotiations with our respective workers council in the second quarter 2015 and then hope to start implementation in the remainder of 2015.

Once our negotiations are completed, we will be able to share more details with you about the projected costs, the timing and savings associated with the BioSpin rightsizing and factory consolidation program.

We're driving significant innovation in BioSpin and just last week I attended the Experimental NMR Conference or ENC, in California, where we introduced various new NMR and EPR products.

Importantly, we launched our next-generation gigahertz NMR technology for structural biology, membrane proteins and for the study of the functionally important, but difficult to analyze, intrinsically disordered protein or IDPs.

IDPs today are poorly understood, but make up about one-third of the human proteome and are believed to represent over 60% of cancer and neurodegenerative disease associated proteins.

The reaction of our customers was very positive and later in the call I will talk more about this new scientific trend and its implications for molecular and cell biology research by NMR. Next, I will turn to our CALID Group which generated low-single digit organic revenue growth in the quarter and reported a very significant uptick in profitability.

I'm pleased to report that we completed our CAM restructuring program in Q1 of 2015 which was one quarter earlier than predicted. The elimination of a significant amount of CAM operating losses had a positive effect on both the CALID Group on Bruker overall.

Our Daltonics division continue to see strong momentum from our world leading MALDI Biotyper platform. We experienced strong revenue and order growth for the Biotyper in Q1 2015, this time particularly in China. Additionally, we received U.S. FDA approval for our second and expanded claim for the MALDI Biotyper.

We can now identify 210 species or species groups, covering 280 clinically relevant bacteria and yeast species with outstanding performance. This represents more than 98% of the typical bacterial identification work flow of clinical microbiology laboratories.

Additionally, in April at the European Conference of Clinical Microbiology and Infectious Disease or ECCMID, in Copenhagen, we also launched our new CE-marked MALDI Sepsityper solution for rapid microbial identification from positive blood cultures and our new high-speed, high-end optional MALDI Biotypersmart system with higher speed, more uptime and a proprietary essentially lifetime solid-state laser with excellent identification performance.

Finally, our detection division was able to convert some of their previous orders into revenue during Q1 of 2015, as we received long awaited export licenses. This revenue contributed to the positive mix we generated in the quarter.

Another recent highlight was that our detection division achieved ECAC certification for its next-generation bench top explosives trace detection product or ETD product, for passenger screening and cargo applications at European airports.

We subsequently received some significant ETD or explosive trace detection orders, from the German Federal Ministry of the Interior, where we will equip a number of midsized airports and the important Frankfurt Airport which serves approximately 60 million passengers per year.

Please turn to slide 6 and I'll discuss the performance of our Bruker NANO Group and our best segment. The Bruker NANO Group reported low-single digit organic revenue growth in Q1 of 2015 which was primarily driven by a good quarter for our AXS division.

The group also drove higher year-over-year operating profitability in the quarter, as it benefited from its previous restructuring actions as well as new higher-margin products and good expense control. Our AXS division started the year strong and generate solid revenue growth in Q1 of 2015, primarily driven by its academic customer base.

The AXS division has also recently developed new processes to better manage and forecasting and conversion of bookings into revenue and I'm encouraged by the early results from these profit changes.

Despite the strong start to the year in revenues, the AXS division order bookings were not that strong so we'll need to see how the year plays out for AXS. All divisions in the NANO Group continue to be adversely affected by weak demand APAC industrial customers, outside of China.

Many of these markets such as metals, mining and microelectronics, including semi [indiscernible] data storage, have not yet recovered. Our life science products to perform well for the NANO Group. These products include the BioAFM and fluorescence microscopy products and we also saw strength in x-ray crystallography demand in recent quarters.

We continue to drive a high percentage of NANO's business into less cyclical markets such as cell biology and neuroscience. We believe these markets will provide stable growth opportunities to balance some of the more cyclical markets that NANO serves.

Our BEST segment reported a low-single digit organic revenue decline in the first quarter of 2015, due to the fact that big science projects, such as ITER, were completed in 2014. I'm pleased with BEST's improved execution in managing working capital as BEST has made strides in lowering its inventory through better processes.

While BEST's operational performance started off slow in Q1 2015, I expect it to improve its financial performance gradually over the remainder of the year. Moving on to slide 17, I'll share a slide that we first showed you last quarter. Our priorities for 2015 remain unchanged.

From a management standpoint, we continue to make targeted changes to our divisional leadership teams and I expect to be able to announce a new leader for the Bruker BioSpin Group in the next few months.

We're also continuing all other aspects of our transformation from new management processes to system improvements with a strong focus on operational and commercial excellence. We're close to be able to finalize our BioSpin rightsizing and factory consolidation plan.

We have already begun executing some aspects of the plan outside of Germany and France and I expect the negotiations with the workers council in those two countries will conclude in the coming weeks.

We're accelerating our further outsourcing of high-level assemblies and we're already seeing these efforts start to positively affect our inventory and working capital. Finally, we're focused on driving our profitable growth initiatives throughout the Bruker portfolio.

We're excited about the potential of several new products that we recently launched and about others that we have in our pipeline. On slide 8, I show you some recent new flow from our profitable growth initiatives.

We're focusing Bruker on four areas where we believe we can be among the market leaders and where we expect to have defensible, differentiated and high-margin market positions.

Our four strategic focus areas include; one, life science molecular research; two, applied and pharma; three, nano analysis, microscopy and advanced materials research; and four, clinical research, molecular diagnostics and anatomical pathology.

Today, we discussed three examples where important developments have occurred since the beginning of the year.

Our detection division has been a leader in the detection of chemical threats for decades and we made the strategic decision to leverage its technologies and its security and defense market focus into explosives trace detection or ETD, several years ago.

Our detection division has invested significantly in R&D and ETD market development in recent years and we believe that 2015 will be a breakthrough year for us in the ETD market segment.

We have launched our next-generation bench top detector and our handheld RoadRunner product for ETD recently which cover a much broader range of threats with better sensitivity and specificity than previous generation ETD systems which you all have observed at airports for years.

Importantly, we have now achieved accreditation for our bench top ETD system under the new European ECAC requirements for airport ETD, first for passenger screenings and more recently, also for cargo application.

As I mentioned earlier, we're please report some significant early wins at various German airports including ETD systems for the large international Frankfurt airport.

As many European airports intend to upgrade to the latest generation of ETD equipment in order to meet the new ECAC requirements, we believe we're very well positioned for significant ETD business this year and into the future.

Essentially all of this ETD revenue for 2015 is expected in the second half of the year and is included in our 2015 guidance. Over 3 to 5 years, ETD could be $20 million to $30 million per annum new market opportunity for us, including service contracts and offshore market revenue.

Switching gears to NMR, as many of you know high field NMRs play an important role in structural biology in recent years along with protein crystallography. More recently, Cryo-EM and small angle x-ray scattering have also become useful for look at the surfaces or shape envelopes of larger molecular assemblies.

However, progress in biological insights and effective new drugs for many important diseases has lagged versus the initial expectation. It turns out that the reason is in part fundamental.

In recent years, it was discovered that protein dynamics and functional disorder played very significant roles in molecular and cell biology and in disease biology and pathogenesis.

In fact, as I stated earlier, about one-third of human proteins turned out to be so-called intrinsically disordered proteins or IDPs and a very high percentage, apparently greater than 60%, of cancer and neurodegenerative disease associate proteins are IDPs. Comparable percentages apply for cardiovascular disease and diabetes.

Similarly, excited intermediate states of structure proteins appeared to have a major functional role in biology and can for example, lead to misfolding and aggregation of toxic proteins in certain neurodegenerative diseases such as familial ALS.

It turns out that while a number of experimental and computation methods are needed to study the biochemistry and disease biology of IDPs, by far the most important tool will be ultra-high field NMR in the gigahertz technology class. This is due to NMR's unique ability to study protein dynamics, binding interactions and many other functional aspects.

At the most important international NMR conference at ENC, we introduced our next-generation gigahertz NMR technology in late April for studying IDPs and related dynamic multi-confirmation aspects of structure proteins.

While we will have some IDP related revenue in 2015, we mostly expect that the recognition of the high importance of IDPs will lead to a lot of fundraising for gigahertz class NMR technology in the next few years with revenue ramp up expected in 2016 and beyond.

By 2017, we estimate this could be a $60 million to $80 million per year additional revenue opportunity for gigahertz class NMR's.

Let me continue and close with talking about our MALDI Biotyper franchise which has grown into an approximately $90 million per annum systems and aftermarket business of the last 7 years, with continued good growth and above-company average gross margins. We're very pleased to have received our second and expanded U.S.

FDA claim for MBT identification at the end of the first quarter and we're ramping up for penetrating midsized and smaller U.S. hospitals going forward. We're also now seeing good MBP momentum or MALDI Biotyper momentum, in China after receiving Chinese FDA clearance some time ago.

Finally, at the end of April, at the ECCMID 2015 conference in Copenhagen, we introduced our high end MBTsmart system with higher speed and uptime and the unique proprietary smartbeam solid-state laser that essentially is expected to be a lifetime laser for most microbiology customers, something that our customers appreciate very much.

We also launched our CE-marked MALDI Sepsityper solution for rapid microbial identification, except for example, within one hour after a blood culture bottle turns positive.

We expected this to be of significant interest to hospitals, infectious disease physicians and to patients, as faster identification after blood culture will benefit healthcare expenditures, antibiotic stewardship programs and patient outcomes, particularly in sepsis or septic shock patients in the ICU.

With additional regulatory approvals, the ability for rapid Sepsityper ID from blood cultures and eventually also selected high-value IP protected antibiotic resistance tests expected for the MALDI Biotyper platform, we believe that we may be able to double our microbiology business in the next four to five years.

Going forward, each quarter I will provide you greater visibility into product and business innovation at Bruker and into our profitable growth initiatives. I'll close my remarks by stating that Q1 2015 was a reasonable start to the year for Bruker.

While we expect to drive higher organic revenue growth, many of the initiatives we have launched to drive higher operating income and cash flow are having a clear demonstrable effect on our financial performance and provide a good basis for capturing operating leverage in our business with resumed growth.

With that, I will now turn the call over to Charlie..

Thanks, Frank. I'll now provide some additional details on our Q1 2015 financial performance. On slide 10, I show a snapshot of our Q1 2015 non-GAAP results. Total revenues were $354 million, a decrease of 17% from the first quarter of 2014.

Despite this decline in revenues, our non-GAAP operating income grew 12% in Q1 and our non-GAAP operating margin increased 250 basis points to 10.1% from 7.6% in Q1 of 2014. Our non-GAAP earnings per share grew 27% to $0.14 in the quarter, despite facing a foreign exchange year-over-year headwind of approximately $0.02 in Q1 2015.

Earlier Frank mentioned some of the operational drivers which are having a positive impact on our profitability. The CAM divestitures and restructuring added approximately $0.03 to non-GAAP EPS year over year, while an additional $0.02 was driven by profitability improvements across the rest of our businesses.

Our first quarter 2015 free cash flow of $21 million grew $12 million year-over-year. A significant amount of this improvement came from lower working capital which I show at the bottom of the slide 10. Our working capital ratios have improved significantly from $0.43 per dollar of revenue in the first quarter of 2014 to $0.35 in Q1 of 2015.

While changes in foreign exchange rates have driven some of the working capital decrease, a substantial portion of the improvement came from better inventory management processes that we've put in place, as well as benefits from the CAM restructuring and our outsourcing initiatives. On slide 11, I show the revenue bridge for Q1 2015.

After factoring in an 11% currency headwind and a 3% net negative impact from acquisition and divestitures, we reported an organic revenue decline of 3%. The 3% decline includes the triple quad products and GC services revenue that we did not divest as part of the CAM restructuring.

The negative $10.9 million effect from divestitures and acquisitions reflects the reduction in CAM revenue from divested products, slightly offset by revenue added from the Vutara acquisition which we completed late last year.

Finally, nearly 70% of the currency related year-over-year decline in revenues in Q1 2015 was related to the weaker euro versus the U.S. dollar. On slide 12, I show our Q1 2015 non-GAAP operating results in more detail. Our Q1 2015 non-GAAP gross margin of 47.3% increased by over 300 basis points on a year-over-year basis.

Foreign exchange rates decreased our gross profit by $22 million, but FX had a negligible effect on our gross margin percentage in the quarter.

The CAM restructuring drove approximately 80 basis points of the gross margin improvement, while the remaining basis point improvement was the result of better mix and the cumulative impact of operational initiatives we mentioned earlier. Our Q1 2015 operating expenses were down approximately $24 million on a year-over-year basis.

Approximately two-thirds of the decrease was due to changes in currency, with the remaining decline being the results of CAM and strong expense control in the organization. We're off to a good a start to the year in terms of operating margin expansion, as our non-GAAP operating margin grew 250 basis points compared to Q1 2014.

Foreign exchange rates had minimal effect on both operating income and operating margin percentage. Our Q1 2015 non-GAAP tax rate of 27.2% increased 170 basis points year over year, as a result of jurisdictional mix and the effect of valuation allowances in the prior-year first quarter.

Non-GAAP EPS of $0.14 represented a $0.03 improvement from the previous-year first quarter. On slide 13, I show a reconciliation of our GAAP to our non-GAAP financial results for the first quarter. In Q1 2015, we excluded $21 million of operating costs from our non-GAAP results, an increase of $9 million from the previous year.

The increase was related to $10.2 million non-cash settlement charge associated with a Swiss pension plan. On slide 14, I show our cash flow performance for the first quarter of 2015. We recorded free cash flow of $21 million, an increase of $12 million compared to Q1 2014. Q1 marked the seventh straight quarter of positive free cash flow for Bruker.

The primary drivers of this improvement have been lower working capital as a result of better inventory management and lower capital expenditures. This improvement has also come at a time when our cash related restructuring expenses have increased.

Our cash conversion cycle improved by seven days compared to the previous year which is comprised of the following. Our days of inventory outstanding were 233 days, compared 234 in Q1 of 2014. Overall our inventory declined year over year by $147 million or 24% compared to Q1 2014.

Approximately $100 million of the decrease was related to currency, with the rest of the decline associated with CAM and improved inventory management in several businesses. Our day's sales outstanding were 67 days compared to 65 days last year and our days payable totaled 41 days compared to 33 days in the previous year.

Finally, we also took another step forward with our financial systems by going live with additional reporting functionality in Q1. As a result, our businesses are getting a better view of their global results earlier than they had before.

We also rolled out SAP in Thailand and Malaysia and made progress on design and preparation for ERP system merges that are planned to occur in 2016. While we still have a long way to go with improving our systems, we're making steady progress each quarter. Turning to slide 16, I show Bruker's summary outlook for 2015.

While we're changing some of our assumptions behind the guidance, we're keeping our overall outlook unchanged. In 2015, we expect to generate organic revenue growth of approximately 1% and to improve our non-GAAP operating margin by more than 100 basis points compared to 2014.

This is expected to result in our 2015 non-GAAP EPS being approximately flat with 2014. We expect changes in foreign exchange rates to reduce our reported revenue by 10% to 11% for the full year. This is an increase from our previous estimate of 7% to 8%.

We expect that foreign exchange rates will generate a headwind to our non-GAAP EPS of roughly $0.09 which is similar to the estimate we gave last quarter. Our currency assumptions include a yen to U.S. dollar rate of JPY120 and a U.S. dollar to euro rate of $1.07 which were the spot rates at the end of Q1 2015.

Our assumptions for CAM, CapEx and tax rate remain unchanged from the previous quarter. I'll close by stating that Q1 was a reasonable start to the year by Bruker. We're starting to see improved new order bookings trends in our largest business, NMR and we're focusing on actions that will reinvigorate revenue growth over the balance of 2015.

The positive effects from many of the initiatives we've put in place are driving improvements and profitability in our working capital. With that, let me turn the call over to Joshua to start the Q&A session..

Thank you. Jamie, please assemble the Q&A roster..

[Operator Instructions]. Our first question today comes from Tim Evans from Wells Fargo Securities. Please go ahead with your question. .

Charlie, the margin performance is impressive in the quarter, particular given the revenue decline.

Can you give us a sense for what the biggest drivers there were and how sustainable those things are?.

Sure. It was very good performance and what I can tell you is that the performance was good pretty much across the board. We talked about the impact from CAM, that been the single largest item. We did have some positive mix.

We had very strong revenue growth at high margins in our detection business and a couple of larger shipments that had a positive impact.

Even those aside, throughout the Bruker nano portfolio, throughout the CALID portfolio and even in BioSpin, we saw gross margin improvements across the board and believe that much of that is due to the cumulative impact of the initiatives we put in place over the last year and also the absence of one-timers, absence of inventory write-downs in the thing.

Overall, it's a good start to the year. I think we're happy to see some of these results starting to come through the P&L..

Our next question comes from Steve Willoughby from Cleveland Research. Please go ahead with your question..

Two things for you, first, could you just talk about in the first quarter, how it compared to your expectations for the overall business with the organic growth being down 3%? I guess second then, are you still expecting NMR to be flat to down 5% for the full year? Then finally, any thoughts to and I know you don't provide quarterly guidance, any thoughts to organic growth expectations here in the second quarter?.

For BioSpin, obviously from a revenue standpoint, a rough start to year, but on the order side it was pretty healthy and orders were healthy in the fourth quarter. We're clearly counting on some sequential ramp in BioSpin throughout the year.

At this point, we're not guiding to specific rates by business, but we do feel that BioSpin can recover over the course of this year and contribute to the company getting to that 1% organic growth rate that we guided to in total.

The other, CALID and NANO, got off to reasonable starts and so at this point we continue to feel good about the overall organic growth guidance for the full year even though we're behind in Q1..

Okay. Any thoughts as it relates to trends here in the second quarter? With organic growth, do you expect to turn positive in the second quarter? I guess that's what I'm looking for..

As you know, as our custom is to not guide specifically to the quarter and I can tell you that it will depend on how quickly BioSpin starts to ramp. We're counting on them to ramp throughout the year. Whether that ramp will result in a positive growth in Q2, we're not going to comment on that right now..

Our next question comes from Brandon Couillard from Jefferies. Please go ahead with your question..

With respect to the NMR order experience in the period, could you give us a sense of the magnitude, high-single digits, low singles? Is there any ASP benefit in that figure?.

Yes, we did see healthy growth in NMR orders in Q1 year-over-year, also a bit of a weak comparison Q1 of 2014 when orders are on the weaker side. Nevertheless, we were satisfied they came in a little higher than what we had expected.

I don't think we're going to quantify the exact orders or their growth by product line or by quarter, but it was healthy and better than expected in Q1. It is also only the quarter. Not quarter is a trend, but we were pleased..

Frank, could you speak to the current vitality index? In particular which areas are product categories would you say you're most excited about near-term?.

I'm quite excited about what we had introduced so far this year. I'm actually also quite excited about what the NANO Group introduced. They had quite a few introductions in December of last year, in BioAFM and some of their other new nano [indiscernible] and other products.

I think what we did in microbiology so far this year already is very good and compares favorably also competitively I would think. [Indiscernible] is around the corner, so we'll be doing some interesting things in mass spectrometry outside of microbiology. So far we have obviously not spoken about that yet.

We have our press conference [indiscernible] with ASMS [ph] on Monday morning at 9:30 local time and of course we will talk about that in the Q2 earnings call. It's pretty broad-based. In addition to the other topics on exposes straight detection which has been in the making for several years. I think this will be a breakthrough year..

Our next question comes from Dan Leonard from Leerink. Please go ahead with your question..

I have a question on the Biotypersmart.

What sort of impact do you think that has in the market? Does that catalyze a replacement cycle from your legacy Biotyper install base? Do you plan to price it any differently than your legacy Biotyper?.

I think it's too early for a replacement cycle, but we think if perhaps 10% or 20% initially of our customers buy the higher end system, it's priced quite a bit higher. Not everybody will need it, but some labs will like the lifetime laser, the higher uptime.

It has other improvements [indiscernible] system and other features that are quite convenient. It also has a little bit the future built in, beyond identification, if one does a lot of subtyping on some of these selective tests of antibiotic resistance and so on.

Those will need a lot more laser shots than just the basic ID experiments that we're doing today. Some of the higher throughput, higher sample load labs will probably opt for that. We're expecting initially that perhaps between 10% to 25% of our customers may opt for this higher priced, higher end option..

Okay. My follow-up question, Frank, you talked about a few new products on the call and typically do, but I don't recall you in the past being able to quantify the potential market opportunity for new products that you discuss. Is there a change that has enabled you to do so or are you just trying to be more transparent? Walk me through that process..

I think there has been simply some requests from our investors and rather than just talking qualitatively about new opportunities, I think it's a change in our intentions to provide two or three examples of what we're doing and what we have been developing and what we're now bringing to market, especially when something is particularly significant in the quarter.

We intend to do that throughout the year. You'll probably hear different examples. I thought if I just give you qualitative opportunities that wouldn't be very satisfactory, so we've attempted to come up with some reasonable market estimates, over multiple years, but I think you can fill in the ramp. I hope that's useful information..

Our next question comes from Derik DeBruin from Bank of America Merrill Lynch. Please go ahead with your question..

This is Anne Edelstein calling for Derik.

Two questions, the first on gross margins that drove a lot of overall market expansion this quarter, what should we expect in terms of linearity for that gross margin over the rest of the year?.

It's a good question. Keep in mind that gross margins last year were pretty low. Gross margin in 2014 were pretty high. To some extent in Q1 of this year, there is also a little bit of an easier comp.

Q2 is good to be a more difficult comp and so with some of the mix benefits that we had in Q1, I wouldn't necessarily assume that those are going to continue linearly throughout the year. It's fair to say we're counting on much of our operating margin improvement to come from gross margin.

We expect to end of the year with some healthy gross margin improvement..

If I may elaborate for a moment, Anne, we had this 300 bips improvement in Q1 because Q1 of last year was a bit weak on gross margins. Q2 of last year was strong in gross margins because he had that special 21 [indiscernible] magnets that we delivered and accepted in Tallahassee. The gross margin comparison in Q2 will not be as favorable.

We already know that. Again, I think one needs to focus on the year and I think gross margins of course, as Charlie said, will be a useful significant contributor to the greater than 100 bips operating margin improvement that we're expect this year..

The second question on the NMR bookings, can you provide any more specificity about where you're seeing those bookings comments from? Higher end instruments and market-wise, that would be helpful..

Without going into too much detail, highlights were, yes, there were certainly some A to B conversions. Some customers that previously were lined up to buy elsewhere purchased from us in Q1. That wasn't the majority of order growth.

The particular highlight that I would then take was particularly strong orders in the Americas, with a big system, for instance, from Brazil and also very healthy orders, including pharma orders from the United States..

Our next question comes from Doug Schenkel from Cowen and Company. Please go ahead with your question..

This is actually Chris on for Doug today. Thank you for taking my question. I just had a follow-up to the gross margin question. Fairly a very good gross margin quarter as you mentioned 300 bips improvement year-over-year. This is a level we haven't seen in 2012.

FX had a negligible effect on gross margin, so I think it's a bit surprising to us that the euro rate that hit your revenue didn't benefit gross margin, given your manufacturing exposure in euros.

Can provide some color just to help us understand this dynamic as we model out the rest of the year?.

The way currency moves through the P&L is fairly complicated. You're right that we have a large manufacturing and cost of the goods sold chunk denominated in euro and we get some benefit there.

The yen continues to be a story with the second straight year of significant changes in the yen and that's a business where we have a lot of revenues and no costs.

The reason we didn't call out FX as a major driver on the gross margin percentage is because the effect of the euro and the yen essentially wash out and it ends up being not much of a story percentage-wise. You also end up with a few other weaker currencies from Canada to Brazil to India..

Okay. Maybe if I could just follow up on the Japan comment. Japan has been pretty much weak for your peers during this quarter, given the tough year-over-year comp and also the research funding.

Does a lower than expected Japan revenue quarter actually benefit your gross margin?.

I don't know that we can answer quantitatively, but it's probably a small effect, if any..

No, I can say actually. It doesn't benefit gross margin. Maybe versus expectations or something, but it's year-over-year. It hurt us because of the currency fluctuations are so significant still and it's a business that shrank..

Our next question comes from Tycho Peterson from JPMorgan. Please go ahead with your question..

I want to re-ask the question Brandon asked earlier on pricing.

Can you just comment on the effect of pricing increases in your overall strategy now that it's effectively a monopoly?.

We started reducing our discounts last year already and I think that begins to see some effect. We then took a more significant step at the beginning of this year. There's clearly competition out there, one major company in Japan that we compete with that has a low yen tailwind, so to speak. There's a lot of smaller competitors, of course.

Nevertheless, I think pricing discipline and discounting discipline is a key part of our Bruker BioSpin strategy. There are other elements. You're familiar with them. The pricing increase, list price increase, is relatively moderate, but on pricing discipline and discounting discipline, I think is a very important theme.

I think it's being lift throughout the organization. Having said that, that now goes into Q1 and Q2 orders until that turns into revenue. It'll be late in the year or early next year.

We're seeing a little bit of some beginnings of that from last year, probably in our gross margins now, plus of course other internal procurement, logistics and other efforts to reduce our cost..

And then from the new IDP NMR systems, are you positioning this to go more after electron microscopy, x-ray crystallography? I'm just trying to figure out what technologies you're hoping to displace..

It's really a new gig in the way. By the way, I should have mentioned that. On that slide 8, I know this is a new term for many of you. There's really a terrific short video that I highly recommend for any interested investors. The URL for that is on the bottom of the slide 8. I think you'll enjoy watching that for a bit of a background.

We've used it for internal training as well. This doesn't really subtract from anything else necessarily.

We expect any boost for ultra-high field NMR because that's exactly what you need along with computational and some microscopy and then some [indiscernible] as well, but it's really gigahertz class NMR that can provide the most powerful tools for exploring these IDPs.

There's a sudden explosion in conferences that pay attention to them in publications. It's been building up for a few years, but it really is becoming very obvious right now that that's important new scientific trend in proteins.

Could compete for wallet share? Yes, a little bit, but hopefully I think this could actually generate some significant additional funding if things go right. At least that's how it has began to play out in Europe and I would hope that maybe in the U.S. that may happen as well over the next couple of years.

It's really a new piece of science that seems to be also very important for healthcare..

One for Charlie before I hop off, on a lot of the profitability initiatives, I think for BioSpin, you said more of the footprint consolidation may happen in 2016 than this year.

Can you maybe just talk about other things we can track on any of the supply chain initiatives, lean manufacturing, cost reductions that maybe you want to highlight?.

No. I think as we have said all along, we have launched a number of these initiatives across all of the businesses. Particularly with outsourcing, it frequently takes you upwards of a year to start to really gain any P&L benefit.

You might get some balance sheet benefit right way, but it takes a little while as the production transfers over to your partner and you start to reap some cost savings. It takes a little while. BioSpin actually started much of our outsourcing way back in 2013. They are now starting to see some benefit.

Other businesses engaged in them more heavily in 2013, 2014 and now into 2015. I wouldn't call it any one thing. What I would call out is the cumulative effect of persistent effort across a bunch of businesses starting to have an impact here. I think we're gaining momentum in some of the businesses on these programs..

If I could just ask one more, Charlie, are we at the point where you would consider a buyback given the cash position? Or should we just think about bolt-on M&A being the priority still?.

From a capital allocation standpoint, we're interested in augmenting our growth with bolt-on M&A. At this point, that's our only plan..

[Operator Instructions]. Our next question comes from Ross Muken from Evercore ISI. Please go ahead with your question..

This is [indiscernible] on for Ross today.

I just wanted to know looking in the rear view, if you want to call it anything that came through with the restructuring, anything that's finished? Anything we should keep an eye on going ahead?.

Are you referencing the CAM restructuring in particular?.

Yes, but overall in general, your overall initiatives..

I'm not sure I understood the question. What do you mean by looking back or looking in the rear view? I don't understand the question..

Anything that you guys want to call out as a success and then anything that we should keep an eye out going forward?.

I would most obviously call out the CAM restructuring as a success. We finished it a little bit earlier than we had anticipated. It's clearly contributing to gross margins and to OpEx reductions. It's perhaps the most noticeable singular item. In our corporate presentations, we have a slide.

It's on our IR section, where we really outline a number of the outsourcing and restructuring and factory consolidation efforts that have been going on for the last two to three years in just about every single one of our businesses. For the other ones, I guess I would more stress the cumulative effect of that, if that is hopeful..

Our next question comes from Isaac Ro from Goldman Sachs. Please go ahead with your question..

Just another question on pricing, I'm just curious given your comments earlier about when you started or raise price a little bit last year, should we assume that the benefits of those actions might start to play out the back half of this year, in terms of your revenue?.

Yes, the bigger step in pricing or reduced discounts, quite honestly we took early this year, so back half of this year, the earliest, more in Q4 then Q3 and of course going into 2016. It's clearly a second half story..

A follow-up to that question, if we look over a multi-year period, what would you say is a reasonable amount of pricing power you should hope to realize in that business? Is more than one or two percentage points possible?.

It depends on the different areas within NMR and within preclinical MRI. I think in the aggregate more than 1% or 2% is needed for us to sustain the innovation that our customers want us to perform because we're an integral part of that field. That's different from the annual effect that may roll in more slowly and in smaller increments and slices.

Overall, without giving a specific target, I think we're expecting more than 1% or 2% as a cumulative effect, that is for sure..

The next question comes in Dane Leone from BTIG. Please go ahead with your question..

Congrats on what seems to be a pretty good start in terms of EBIT improvement, despite the growth headwinds. Is there a way you could break down for us some of the product mix effects? Specifically I am thinking NMR was down considerably year-on-year.

What would you characterize as the effect of down NMR relative to the other products in the portfolio, in their effect on the gross margin line? As we think NMR might stabilize in the remainder of the year, how would that play into how we should think about the gross margin effect as well?.

BioSpin gross margins are slightly lower than the average of the rest of the portfolio, so that business being a lesser percentage of revenue in the quarter would have a slightly positive effect. I wouldn't call it out as large.

It's important to note though that in BioSpin, even with the down revenue, they were able to improve their gross margins year-over-year as well. It's a business where we're seeing some movement there. Separately, as I called out, we had an uptick in revenue, high margin revenue, in our detection business.

That's a very lumpy business from quarter-to-quarter. It can have minimal revenue in a quarter and it can have meaningful revenue in a quarter, so that was a positive one of this quarter that would have impacted mix positively. Other than that, then it gets down to individual orders again.

Our business is such that we have large orders from time to time that have a higher or lower gross margins and that's just variable from quarter to quarter..

I would ask a similar question regarding the operating cash flow in the quarter which is a substantial improvement.

When we think about the rest of the year, as maybe product mix normalizes with NMR doing a little bit better, do we see an uptick in inventory? How would you tell us that could play out in terms of the OCF generation, some of the improvements we saw in working capital year-on-year?.

I'm feeling pretty good about inventory. We're making, I would say, steady progress almost quarter-after-quarter on that, not giant strides, but steady progress. I see that continuing throughout the year. CapEx was pretty light in the first quarter, if you take a look. That will definitely ramp throughout the year.

We have got some construction projects going on to modernize or expand some facilities, so that's going to be more of a drag as the year goes on, not a huge delta year-over-year. Certainly the slow start on CapEx benefited Q1. It will weight a little bit heavier on subsequent quarters..

Okay. To sum it up, you would say maybe on OCF specifically, not a huge mix effect, but on FCF a ramp on CapEx is expected.

Is that fair?.

Yes. Overall, we're expecting free cash flow for the year to be higher than a last year, even with the higher CapEx number that we're going to carry this year..

Okay.

Lastly for me, in terms of what seems to be an accelerated timeline for the worker negotiations in Germany and France, as those resolve maybe a bit sooner than expected, what would you say is the replacement cycle for personnel that would maybe be needed in other geographies? How are you thinking on those costs being replaced in other areas versus a net reduction in spend?.

There is no replacement. That's really planned here. If these negotiations conclude before the end of Q2, then we believe we can do the implementation in the remainder of the year. I think it's answers it a little differently, but that is how we see it play out. We moved ahead in other geographies in Q1 and we're on track there.

We're actually pleased with the progress in those geographies for legal reasons. We're in a negotiation process. We're hopeful that we can conclude that in Q2 and then implement throughout the remainder of the year..

Our next question cousin Dan Arias from Citigroup. Please go ahead with your question..

Frank and Charlie, if you were to strip out discounting and look at mix within NMR, how much, if at all, have ASPs trended downward over the last couple years, as you just moved into some of the applied markets?.

In the applied markets, if anything, the ASP are better than in the pure research systems. It's the other way around. Applied markets is still relatively small compared to research systems in NMR overall..

My question was just to say, have ASPs for NMR systems, irrespective of what you're doing on the discounting front stayed stable over the last couple of years or has pricing generally come down as some the high-end systems have been placed less frequently and you've place some of the smaller field boxes in the market?.

Let me differentiated a little bit because I think last year in 2014, I think we didn't see further degradation in pricing, if anything. I think we have been able to perhaps improve it a little bit already in 2014.

You may be seeing some of that in gross margin in 2015, whereas in the previous many years certainly from 2010 to 2013, there is a lot of pricing pressure. Also, before [indiscernible], prior to their sale to Agilent was selling or perhaps in selling mode, pricing pressure have been significant. Last year was perhaps the inflection point.

This year, we hope to make more progress, but before that there was a long multi-year period with extensive pricing pressure..

Okay.

Charlie, may sticking with NMRs, as you work through your restructuring plans there, do you have a rough sense at this point for how much of the savings you may keep versus what you may deploy as reinvestment somewhere else?.

We do have a plan, although it's hard to tell how much is going to hit in the year.

An important part of the transformation and what we're doing BioSpin, partly we addressing the cost structure and the manufacturing footprint, but we've also communicated that we're investing in new capabilities, for example, expanding sales and marketing capabilities to go after those applied market opportunities, R&D investments in clinical applications for NMR We're selectively reinvesting.

Although with the slow start to the year, we have taken a little bit of the pay-as-you-go approach. We've pushed out the investments as the revenue has come in a little more slowly. We're not fully there on our ability to implement on the restructuring.

The bottom line is, as a result of the restructuring, there will be a net benefit to the bottom line, but there will be some reinvestment as well. The thing that's hard to call at this point is how much will be in the current year and how much of it will spill over, say, into next year..

Our next question comes from Amanda Murphy from William Blair. Please go ahead with your question..

Just a couple follow-ups on the commentary around the NMR benefit from Agilent, is there any way you could give qualitative commentary? I know it's a bit early here, but what are you seeing? Obviously, you've gotten new instrument sales, but are you seeing any evidence of legacy installed base conversion, people who maybe want better support or service or whatnot going forward? And then secondly, can you quantify or can you put some numbers around what this might look like for you in terms of opportunity near-term and longer-term, maybe not revenue but contextually what that might look like? Thanks..

Yes, Amanda. This is Frank. I don't think we can give you numbers or that type of granularity, but it's clear a lot of the legacy Agilent/[indiscernible] customers, while they can get service today, they can't really get any upgrades, so they are eager to get onto a new platform and raise funding to get into a new platform that has long term support.

For them, the news is still relatively recent. They still, by and large, in fundraising mode.

When we say that we're benefiting from this transition, there's a short-term benefit of people that may have canceled orders or maybe have money ready to spend come last October, November and might have purchased elsewhere or would have liked to have purchased elsewhere. Spending their money with us, that's maybe in Q4 and Q1 of this year.

We're already seeing a little bit of that, even in Q1 as orders, not as revenue yet, of people that say, beyond just having service and maintaining my systems I want to get into a platform that can be upgraded further in the future.

There's some activity in fundraising, budget approvals in big pharma or writing grants or going to foundations or whatever it may be at universities..

Do you by any chance have an updated market share number, just thinking about Agilent, what their market share might be, ex the high field markets?.

In the very high field markets, we're the only ones with a product. In other markets, it can be competitive. There is a competitor that certainly serves the 400 to 800 megahertz in solid state markets. They are viable. They're investing a little bit, so they hope to get some of that Agilent market share as well.

I assume they are gaining in a market share and we're gaining in market share a little bit. I think we're probably both benefiting from Agilent's access to some extent..

I was actually looking for the Agilent, what their market share is, ex high field, just to get an idea of what that opportunity may look like?.

I really can't comment for Agilent. We have some numbers on the back of an envelope, but since I can never quite validate those, I'll defer to my esteemed colleagues at Agilent to give you those numbers..

Our next question comes from Jon Groberg from UBS. Please go ahead with your question..

Congratulations on finally starting to see some of the progress from all of your efforts. I think someone asked this question earlier, Frank or Charlie.

I'm not sure what the answer is, but how did the quarter, relative to your expectations for going into the quarter, how did the quarter shape up in the context of your view for the full year? You didn't change your guidance for the year, so I'm just curious how the quarter was relative to what you had expected going into it?.

I would say what you see is what you get. We were expecting to come out a little bit stronger in revenue and we weren't quite expecting such strong profitability. As we commented, we think we can make up the difference over the course of the year on revenue.

We're not committing to keep this level of profitability throughout the year, but overall, we're still confident that we can get to our full year guidance..

And then just be clear, in terms of the potential reductions in the work forces in Europe, are those contemplated in your existing guidance, that you'll implement those in the second half of the year? Is that in your guidance?.

Yes, we anticipate that's part of our business plan, in terms of the restructuring expenses. As we implement that in the second half of the year, those two countries that really won't have much of a margin impact until 2016.

Some of the other earlier headcount reductions in the BioSpin Group, outside of those two countries where we're able to implement this already in Q1 or in Q2, those will have a benefit already in the second half of this year.

Of course Germany and France are a big piece of that and in the aggregate more than half of it, in terms of headcount reductions. Those two countries are on a slower timeline..

Again just last one, actually I was just in the Frankfurt airport the other day. I won't tell you whose instruments I saw there, but I know you said you thought this could be a $20 million to $30 million per year opportunity in the ETD market.

What are you expecting for this year though? You said you did expect some revenue in the second half of the year..

This year may still start out modest, perhaps [indiscernible] bigger than $5 million or so for Europe. Beyond some of the German orders that we won and we're actually not allowed to get into quantitative details there by our customer. There's a lots of business pending in Europe at European airports, throughout Europe, throughout the European Union.

We also won some other smaller airports elsewhere outside of Germany, but a lot of deals are pending there right now for the remainder of the year. We'll need to see how that works out. [indiscernible] a share of that. By the way, the established vendors, okay, some of them are active again. What you see, it's really a generational changeover.

What you see is probably all 20-year-old stuff or maybe a little bit younger but more or less designed, could detect less threats at different sensitivity and specificity levels. There is a whole new generation, ours and some other new and old competitors, that are coming along with next-generation explosive trace detection equipment.

There will be a substantial change over, like a generational change and we're part of that new wave..

Okay.

Just to be clear, for this year, maybe $5 million or so is a reasonable number? Is that what you said, for this year?.

It depends, that could be. That or a little higher could be the ballpark for this year which wouldn't be a bad start given that we started with zero..

Our next question comes from Sung Ji Nam from Cantor. Please go ahead with your question..

I was wondering if you could talk about maybe overall trends in China this quarter and also Asia in general. I was wondering as far as your outlook is concerned for the year, what's embedded in that 1% organic growth rate? Thank you..

Japan, somewhat weak or flat in the order and revenue. China was weaker in revenue because of last year's order trends, but healthier in orders. The biggest concern is actually other APAC which has a fair amount of semiconductor and data storage in it as well, but also, it has a negative impact on metals or mining. That also plays a role in other APAC.

Moreover, while people are optimistic about India in Q1, we just didn't see it yet. India and IMEA was pretty weak in orders.

Did that help an answer your question?.

Our next question comes from Paul Knight from Janney Capital. Please go ahead with your question..

Charlie, could you talk to the gross margin help from the weaker euro for overall operations?.

Listen, as we pointed out, we have significant manufacturing and supply chain operations throughout Germany, France and Switzerland. The help on the euro is pretty significant. The Swiss franc obviously has moved around quite a bit in the first part of the year, strengthened early, then softened a little bit, but still stronger year-over-year.

That acts as a negative impact. We can isolate the currencies, but when you look at the P&L, you've got a benefit from the euro. You've got a negative from Swiss franc, a negative from the yen and then you've got a whole basket of other currencies that generally are negative because of the strengthening of the dollar.

Most of these are countries we mostly have only sales operations that wash it out. That's why overall you see not much of an impact on a percentage-wise basis on gross margin because you've really got to get in and look at the basket of currencies that have an effect.

Clearly, for our European, our German and French-based manufacturing operations, the weaker euro has been a benefit..

And then on the NMR market, Frank, are you seeing a trend towards smaller NMR units, in terms of field size? Is that good or neutral to the future profitability?.

Yes, Paul, we've definitely seen a trend towards lower field system in the last couple of years. We do however see a likely resurgence, perhaps by next year in ultra-high field NMR, driven by this new IDP trend, where even higher fields and other new technology elements that come along with the gigahertz NMR class.

It's not just the higher field magnet. There is a number of other things that we've detailed in our recent press releases at the Experimental NMR Conference. I won't go into the details of those, but there's a lot more to that next-generation gigahertz technology then just the magnets, although it's an important piece. Those are really needed.

We think it's likely. We're predicting a reversal of the ultra-high field trends which have been down in the last couple of years and may still be weak this year because it takes a while to raise funding.

I think the science trends will strongly favor a resurgence in ultra-high fields and gigahertz NMRs and hopefully they'll be funding for that in 2016 and 2017 and beyond. There has been a decline in ultra-high field demand in the last couple of years..

Our next question comes from Bryan Brokmeier from Maxim Group. Please go ahead with your question..

Frank, you had a pretty large presence at AACR a weeks ago, with a number of imaging platforms for preclinical, transitional and clinical markets.

Can you talk a little bit about how some of those instruments are performing, particularly on the micro-CT and some of the other instruments that have significant opportunities in the oncology market?.

Yes. We didn't launch anything new, but we showed our existing product line at AACR. There's an important conference coming up, the same week as [ASMS. There's International Society of Magnetic Resonance meeting in Toronto, same first week of June.

You'll hear some product news from us there and also later on in the year, I think, in September in Hawaii of all places, at the molecular imaging meeting. I think I've got to give, without too much granularity, PCI demand has been healthy last year.

PCI is our preclinical imaging division that includes preclinical MRI, PET spect, optical, also micro-CT that you asked about specifically. We think those markets have reasonable growth and certainly we, within those markets, are doing quite well with our multi-modality strategy and then connecting those. We expect that to continue this year.

There were healthy orders last year and we're predicting healthy order trends also for the full year. Any given quarter there can be fluctuations, but for the full year we're expecting these trends to be continuing to be strong. Last year, we even had double-digit growth there.

This year, I'm not committing to double-digit order growth, but we're expecting healthy markets there overall, across all PCI product lines. Part of that is driven by cancer. Of course, they are many other diseases or fundamental biology research that drives the demand..

Our next question comes from Eric Criscuolo from Mizuho. Please go ahead with your question..

I'm just filling in for Peter Lawson tonight.

I guess with all the restructuring and operational and financial system improvements that you've done so far and looking at your end goals for those programs, where would you say that you're in that whole process?.

From a financial consolidation reporting system, we're 90% done. We're just turning on some additional functionality. I think importantly though we have room for process improvements still.

Now that we have the tool in place and we're getting some benefit out of it, we'll be looking at our accounting operations and our process overall to improve it and shorten it. There's plenty of work left there. On the ERP side, I'd say much earlier innings.

As we've commented, we've rolled out SAP in half a dozen countries in Asia over the last year which is a great step forward for those locations.

Overall, we still have a variety of flavors of SAP running inside the company and they're not necessarily as connected as they should be, so we're working on a design that's going to allow us to integrate some of those SAP implementations.

We intend to complete the design and some of testing of this year which would enable us to merge the systems next year. Then once merged, it allows us to really start to drive process improvement at a lower level. We still have a pretty long way to go, though I'm very happy with what we've accomplished over the last 18 months or so..

Let me add to that that we've made pretty good progress on the CRM, on the commercial excellence site. We've made good progress there for the major countries, the major product lines.

There's more work to be done there as well, but I think the big steps have been taken on the CRM side as well as and that's already making our commercial teams more effective..

With that, ladies and gentlemen, we've reached the end of the allotted time for today's question-and-answer session. I'd like to turn the conference call back over to Mr. Young for any closing remarks..

I would like to thank everyone for joining us these evening. If you're interested in meeting with Bruker management, we'll be presenting at the Bank of America Merrill Lynch, UBS, Jefferies, William Blair and Goldman Sachs conferences during the second quarter.

For those of you who plan on attending the ASMS conference in New Orleans, Bruker will hold its press conference from 9:30 to 10:30 Central time on Monday, June 1. If you'd like to attend, please contact me. Thank you for your attention and have a nice evening..

Ladies and gentlemen, that does conclude today's conference call. We do thank you for attending. You may now disconnect your telephone lines..