-----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, SW2r8ZTum6RDVbVdDLUeHanLFPc/TOsclaInGfB8kaCesKxPDSe1IS6L8RX2G8EV VWlHTFIeyr8G19ngrjEC7A== 0000313616-95-000014.txt : 19950721 0000313616-95-000014.hdr.sgml : 19950721 ACCESSION NUMBER: 0000313616-95-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950720 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DANAHER CORP /DE/ CENTRAL INDEX KEY: 0000313616 STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [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: 95554935 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 June 30, 1995 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 19, 1995 was 58,476,408. DANAHER CORPORATION INDEX FORM 10-Q PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Condensed Balance Sheets at June 30, 1995 and December 31, 1994 3 Consolidated Condensed Statements of Earnings for the three months and six months ended June 30, 1995 and July 1, 1994 4 Consolidated Condensed Statements of Cash Flow for the six months ended June 30, 1995 and July 1, 1994 5 Notes to Consolidated Condensed Financial Statements 6 Item 2. Managements's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II - OTHER INFORMATION Item 5. Letter to Joslyn Corporation 8 & 9 Item 6. (a) Exhibits: 9 (27) Financial Data Schedules (b) Reports on Form 8-K: None DANAHER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (000's omitted) June 30, December 31, 1995 1994 (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 20,574 $ 1,978 Accounts receivable, net 231,543 193,364 Inventories: Finished goods 94,445 71,293 Work in process 37,976 33,668 Raw material and supplies 46,265 37,429 Total inventories 178,686 142,390 Prepaid expenses and other current assets 46,322 50,955 Total current assets 477,125 388,687 Property, plant and equipment, net of depreciation of $170,249 and $148,596 respectively 278,859 273,076 Other assets 30,991 30,523 Excess of cost over net assets of acquired companies, net 434,319 442,655 Total assets $ 1,221,294 $1,134,941 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable and current portion of long-term debt $ 87,914 $ 68,771 Accounts payable 104,650 94,609 Accrued expenses 240,607 232,855 Total current liabilities 433,171 396,235 Other liabilities 142,891 146,091 Long-term debt 116,547 116,515 Stockholders' equity: Common stock - $.01 par value 634 632 Additional paid-in capital 314,564 311,648 Retained earnings 247,453 200,719 Cumulative foreign translation adjustment 3,523 590 Treasury Stock (37,489) (37,489) Total stockholders' equity 528,685 476,100 Total liabilities and stockholders' equity $1,221,294 $1,134,941 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 June 30, July 1, June 30, July 1, 1995 1994 1995 1994 Net revenues $ 391,492 $ 318,082 $ 767,996 $ 607,235 Operating costs and expenses: Cost of sales 277,862 230,465 552,137 443,919 Selling, general and administrative expenses 61,611 50,164 120,907 96,386 Goodwill and other amortization 3,410 2,421 6,841 4,842 Total operating costs and expenses 342,883 283,050 679,885 545,147 Operating profit 48,609 35,032 88,111 62,088 Interest expense, net 3,242 2,378 6,416 4,810 Earnings before income taxes 45,367 32,654 81,695 57,278 Income taxes 18,147 13,388 32,627 23,484 Net earnings 27,220 $ 19,266 $ 49,068 $ 33,794 Earnings per share $ .45 $ .33 $ .82 $ .58 Average common stock and common equivalent shares outstanding 59,854,847 58,265,142 59,813,194 58,203,776 See notes to consolidated condensed financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (000's omitted) (unaudited) Six Months Ended June 30, July 1, 1995 1994 Cash flows from operating activities: Net earnings $ 49,068 $ 33,794 Noncash items, depreciation and amortization 33,989 20,852 Increase in accounts receivable (37,629) (24,009) Increase in inventories (35,411) (24,315) Increase in accounts payable 9,601 13,001 Change in other assets and liabilities 8,717 18,808 Total operating cash flows 28,335 38,131 Cash flows from investing activities: Payments for additions to property, plant, and equipment, net (30,086) (20,616) Cash paid for acquisitions - (4,580) Net cash used in investing activities (30,086) (25,196) Cash flows from financing activities: Proceeds from issuance of common stock 2,918 582 Borrowings (repayments) of debt 19,175 (1,900) Payment of dividends (2,334) (1,708) Net cash provided by (used in) financing activities 19,759 (3,026) Effect of exchange rate changes on cash 588 241 Net change in cash and cash equivalents 18,596 10,150 Beginning balance of cash and cash equivalents 1,978 6,767 Ending balance of cash and cash equivalents $ 20,574 $ 16,917 Supplemental disclosures: Cash interest payments $ 6,235 $ 4,725 Cash income tax payments $ 38,120 $ 21,532 See notes to consolidated condensed financial statements. DANAHER CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS June 30, 1995 (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 1994 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 June 30, 1995 and December 31, 1994, its results of operations for the three months and six months ended June 30, 1995 and July 1, 1994, and its cash flows for the six months ended June 30, 1995 and July 1, 1994. NOTE 2. NONRECURRING TRANSACTIONS IN 1994 In the second quarter of 1994, 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 of 1994. 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. NOTE 3. SUBSEQUENT EVENT On July 7, 1995, the Company made an offer to acquire Joslyn Corporation for approximately $229 million in cash in a negotiated merger transaction. Included in Item 5, is the text of a letter to Joslyn Corporation containing this offer. The outcome of this transaction remains uncertain as of this date. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales for the 1995 quarter were 23.1% higher than the 1994 quarter. Net sales for the six-month period were 26.5% higher than the corresponding period in 1994. This is principally due to continued increases in market share in all segments, with acquisition activity accounting for approximately 16% of sales growth in each period. Gross profit margin in 1995, as a percentage of sales, was approximately 29.0% for the quarter and 28.1% for the six-month period, an increase of 1.5% and 1.2%, respectively, from 1994 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 1995 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 15.7% for the 1995 quarter and six month period. This represents a decrease of 0.1% and 0.2%, 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 36.4% and 33.4% higher than the 1994 levels, due to higher average debt levels, principally due to acquisitions made in 1994. The effective tax rate for both the second quarter and six-month periods is lower in 1995 than in 1994. This reflects principally the lesser impact of nondeductible goodwill amortization given higher pretax earnings. Liquidity and Capital Resources Since December 31, 1994, 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 1994 caused by the holiday season. Total debt increased to $204.5 million at June 30, 1995, primarily as a result of the increase in working capital discussed above, offset somewhat by the strong operating performance. A regular quarterly dividend of $.02 per share was declared, payable on July 28, 1995 to holders of record on June 30, 1995. The Company's cash provided from operations, as well as credit facilities available (including $200 million of available funds under the Company's revolving credit facility), should provide sufficient available funds to meet anticipated working capital requirements, capital expenditures, acquisitions, dividends and scheduled debt repayments. PART II - OTHER INFORMATION ITEM 5. LETTER TO JOSLYN CORPORATION July 7, 1995 Mr. William E. Bendix Chairman of the Board Joslyn Corporation 30 South Wacker Drive Chicago, IL 60606 Dear Bill: As you know, Danaher Corporation has been an investor in Joslyn Corporation for over a year. We have been impressed with Joslyn's business, which complements businesses we are engaged in. When we spoke initially on June 30, 1995 and most recently on July 6 and 7, 1995, I told you that Danaher's management was reviewing what the alternatives might be with respect to our investment in Joslyn, and might consider discussing with Danaher's Board of Directors whether to explore a business combination with Joslyn. Danaher's management and Board of Directors has now decided to propose a business combination, and we hereby propose a combination of our companies' businesses in a transaction in which your stockholders would receive cash for each share of their common stock. Based on our review of publicly available information about Joslyn, we propose a price of $32 per share. We think the offer is the appropriate price based on publicly available information, but we would like to conduct a brief, highly focused due diligence investigation in order to explore whether a higher price could be justified. We believe that the transaction we are proposing represents a very attractive opportunity for your stockholders. The price we are offering represents a significant premium over today's closing market price of the Company's common stock -- a price that, in our view, already reflects the fact that Danaher is a substantial owner of Joslyn's shares. Our offer is not subject to financing, but is subject to the taking of all necessary actions to eliminate the applicability of, or to satisfy, any anti-takeover or other defensive provisions contained in the applicable corporate statutes or in the Company's charter, by-laws and rights agreement. Mr. William E. Bendix July 7, 1995 Page 2 We are convinced that the combination of our companies will be of great benefit to Joslyn and its stockholders. We also believe that Joslyn's employees, customers and suppliers will benefit from the joining of the complementary strengths of our two companies. Our financial strength and the complementary nature of the businesses of our two companies enables us to move forward quickly to negotiate and to close an agreement. We are prepared to enter into immediate discussions with you and your directors, management and advisors to answer any questions you may have about our offer. We hope that you and your fellow directors will view this offer as we do -- an excellent opportunity for the stockholders of the Company to realize full value for their shares to an extent that is not available to them in the marketplace. We trust that Joslyn's Board of Directors will give our offer prompt and serious consideration and will not take any actions that would adversely affect your stockholders' ability to receive the benefits of our proposed transaction. Our sincere desire is to work together with you to reach agreement on a negotiated transaction which can be presented to your stockholders as the joint effort of the directors and managements of both companies. As you can appreciate, it is important that we hear from you as promptly as practicable with respect to our offer. We look forward to hearing from you and to working together on this transaction. Sincerely, George M. Sherman ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: (27) Financial Data Schedules (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 20, 1995 By: /s/ Patrick W. Allender Patrick W. Allender Chief Financial Officer Date: July 20, 1995 By: /s/ C. Scott Brannan C. Scott Brannan Controller EX-27 2
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