-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, gHkltqrSVKUjHuvWqN9gDRYhga3ZvahBZTHn9cZmtRaWhiHS2TWk1ztaimeClBq5 uerBmVviYXvC0V4wu2MDoA== 0000313616-94-000013.txt : 19940722 0000313616-94-000013.hdr.sgml : 19940722 ACCESSION NUMBER: 0000313616-94-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940701 FILED AS OF DATE: 19940721 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DANAHER CORP /DE/ CENTRAL INDEX KEY: 0000313616 STANDARD INDUSTRIAL CLASSIFICATION: 3585 IRS NUMBER: 591995548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08089 FILM NUMBER: 94539433 BUSINESS ADDRESS: STREET 1: 1250 24TH ST NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 BUSINESS PHONE: 2028280850 MAIL ADDRESS: STREET 1: 1250 24TH STREET NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 FORMER COMPANY: FORMER CONFORMED NAME: DMG INC DATE OF NAME CHANGE: 19850221 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE [ X ] SECURITIES AND EXCHANGE ACT OF 1934 For the Quarter ended July 1, 1994 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-8089 DANAHER CORPORATION (Exact name of registrant as specified in its charter) Delaware 59-1995548 (State of incorporation) (I.R.S. Employer Identification number) 1250 24th Street, N.W., Suite 800 Washington, D.C. 20037 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 202-828-0850 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares of common stock outstanding at July 20, 1994 was 28,562,941. DANAHER CORPORATION INDEX FORM 10-Q PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Condensed Balance Sheets at July 1, 1994 and December 31, 1993 3 Consolidated Condensed Statements of Earnings for the three months and six months ended July 1, 1994 and July 2, 1993 4 Consolidated Condensed Statements of Cash Flow for the six months ended July 1, 1994 and July 2, 1993 5 Notes to Consolidated Condensed Financial Statements 6 Item 2. Managements's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 DANAHER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (000's omitted) July 1, December 31, 1994 1993 (unaudited) ASSETS Current Assets: Cash and cash equivalents $16,917 $ 6,767 Accounts receivable, net 161,991 135,445 Inventories: Finished goods 83,125 59,916 Work in process 21,906 19,900 Raw material and supplies 29,489 27,753 Total inventories 134,520 107,569 Prepaid expenses and other current assets 29,791 27,982 Total current assets 343,219 277,763 Property, plant and equipment, net of depreciation of $139,137 and $122,634 respectively 243,092 235,666 Other assets 20,859 21,477 Excess of cost over net assets of acquired companies, net 337,661 337,566 Total assets $944,831 $872,472 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 335 $ 2,235 Accounts payable 87,376 72,445 Accrued expenses 183,084 160,685 Total current liabilities 270,795 235,365 Other liabilities 140,946 142,091 Long-term debt 131,350 131,350 Stockholders' equity: Common stock - $.01 par value 310 309 Additional paid-in capital 283,933 279,532 Retained earnings 155,178 123,095 Cumulative foreign translation adjustment (192) (1,781) Treasury Stock (37,489) (37,489) Total stockholders' equity 401,740 363,666 Total liabilities and Stockholders' equity $944,831 $872,472 See notes to consolidated condensed financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (000's omitted except per share amounts) (unaudited) Quarter Ended Six Months Ended July 1, July 2, July 1, July 2, 1994 1993 1994 1993 Net revenues $318,082 $258,902 $607,235 $507,286 Operating costs and expenses: Cost of sales 230,465 190,107 443,919 374,592 Selling, general and administrative expenses 50,164 41,534 96,386 83,181 Goodwill and other amort- ization 2,421 2,358 4,842 4,701 Total operating costs and expenses 283,050 233,999 545,147 462,474 Operating profit 35,032 24,903 62,088 44,812 Interest expense, net 2,378 2,841 4,810 5,362 Earnings before income taxes and cumulative effect of accounting change 32,654 22,062 57,278 39,450 Income taxes 13,388 9,267 23,484 16,570 Earnings before cumulative effect of accounting change $ 19,266 $12,795 $ 33,794 $ 22,880 Cumulative effect of accounting change (net of tax benefit of $20,000) - - - (36,000) Net earnings $ 19,266 $12,795 $ 33,794 $(13,120) Per share: Before accounting change $ .66 $ .44 $ 1.16 $ .79 Accounting change - - - (1.25) Net earnings $ .66 $ .44 $ 1.16 $ (.46) Average common stock and common equivalent shares outstanding 29,132,571 28,793,831 29,101,888 28,793,535 See note to consolidated financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (000's omitted) (unaudited) Six Months Ended July 1, July 2, 1994 1993 Cash flows from operating activities: Earnings before cumulative effect of accounting change $ 33,794 $ 22,880 Noncash items, depreciation and amortization 20,852 21,985 Increase in accounts receivable (24,009) (9,769) Increase in inventories (24,315) (13,533) Increase in accounts payable 13,001 5,589 Change in other assets and liabilities 18,808 10,946 Total operating cash flows 38,131 38,098 Cash flows from investing activities: Payments for additions to property, plant, and equipment, net (20,616) (20,423) Cash paid for acquisitions (4,580) (33,000) Net cash used in investing activities (25,196) (53,423) Cash flows from financing activities: Proceeds from issuance of common stock 582 733 Borrowings (repayments) of debt (1,900) (1,975) Payment of dividends (1,708) (851) Proceeds from notes payable - 30,000 Debt issuance expenditures - (160) Net cash provided by (used in) financing activities (3,026) 27,747 Effect of exchange rate changes on cash 241 1,242 Net change in cash and marketable securities 10,150 13,664 Beginning balance of cash and marketable securities 6,767 1,691 Ending balance of cash and marketable securities $ 16,917 $ 15,355 Supplemental disclosures: Cash interest payments $ 4,725 $ 4,540 Cash income tax payments $ 21,532 $ 17,976 See notes to consolidated condensed financial statements. DANAHER CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS JULY 1, 1994 (unaudited) NOTE 1. GENERAL The consolidated condensed financial statements included herein have been prepared by Danaher Corporation (the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The condensed financial statements included herein should be read in conjunction with the financial statements and the notes thereto included in the Company's 1993 Annual Report on Form 10-K. In the opinion of the registrant, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company at July 1, 1994 and December 31, 1993, its results of operations for the three months and six months ended July 1, 1994 and July 2, 1993, and its cash flows for the six months ended July 1, 1994 and July 2, 1993. NOTE 2. CHANGES IN ACCOUNTING PRINCIPLES As of January 1, 1993, the Company changed its method of accounting for post retirement benefits from recognizing expense as claims are paid to the accrual method specified by SFAS No. 106. The Company elected to recognize this liability immediately and its adoption is not expected to significantly impact the Company's ongoing results of operations. The Company also adopted the liability method of accounting for income taxes specified by SFAS No. 109. Its adoption had no impact on the results of operations and resulted in certain reclassification to the Company's balance sheet. NOTE 3. NONRECURRING TRANSACTIONS Pursuant to a definitive agreement to acquire Mark Controls Corporation, the Company received a $2 million fee plus reimbursement of its costs and expenses when Mark Controls was acquired by another entity at a higher price. The $2 million fee was recognized as revenue in the second quarter. This was offset by a charge to close a manufacturing plant in North Chicago, Illinois and relocate work performed there to an existing Company facility. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales for the 1994 quarter were 22.9% higher than the 1993 quarter. Net sales for the six-month period were 19.7% higher than the corresponding period in 1993. This is principally due to higher customer demand in all segments, with acquisition activity accounting for approximately 6% of sales growth in each period. Gross profit margin in 1994, as a percentage of sales, was approximately 27.5% for the quarter and 26.9% for the six-month period, an increase of 3.4% and 2.7%, respectively, from 1993 levels. The gross margin increase was attributable to productivity improvements combined with increased fixed cost leverage on a higher sales base. Selling, general and administrative expenses for the 1994 quarter and six-month period increased in total dollars principally due to the higher volume levels. Selling general and administrative expenses as a percentage of sales was 15.8% for the 1994 quarter and 15.9% for the 1994 six month period. This represents a decrease of 1.2% and 3.0%, respectively, from prior periods. This reflects the benefit of restructuring and other cost reduction actions taken in earlier periods, and the fixed nature of certain costs. Interest expense for the quarter and six-month period was 16.3% and 10.3% lower than the 1993 levels, due to lower average debt levels. The effective tax rate for both the second quarter and six-month periods is lower in 1994 than in 1993. This reflects principally the lesser impact of nondeductible goodwill amortization given higher pretax earnings. The Company adopted new accounting principles in January, 1993. See Note 2 for a discussion for their initial and ongoing impact. Liquidity and Capital Resources Since December 31, 1993, the Company has experienced increases in accounts receivable, inventory and accounts payable. This is due to the lower activity levels experienced in the last weeks of 1993 caused by the holiday season. Total debt decreased to $131,685 at July 1, 1994, primarily as a result of the strong operating performance. A regular quarterly dividend of $.03 per share was declared, payable on July 29, 1994 to holders of record on June 24, 1994. The Company's cash provided from operations, as well as credit facilities available, should provide sufficient available funds to meet anticipated working capital requirements, capital expenditures, dividends and scheduled debt repayments. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: None. (b) Reports on Form 8-K: None. 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. DANAHER CORPORATION: Date: July 21, 1994 By: /s/ Patrick W. Allender Patrick W. Allender Chief Financial Officer Date: July 21, 1994 By: /s/ C. Scott Brannan C. Scott Brannan Controller -----END PRIVACY-ENHANCED MESSAGE-----