-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FYCZdqeJGCRYD31Qabb16HCQnRYcxysoPi3xuEQeYFDFxWoPR3aATlg8NVLbvqm0 fKIwMzQ8la5H5rzbncPThA== 0000313616-97-000037.txt : 19971022 0000313616-97-000037.hdr.sgml : 19971022 ACCESSION NUMBER: 0000313616-97-000037 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970926 FILED AS OF DATE: 19971021 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DANAHER CORP /DE/ CENTRAL INDEX KEY: 0000313616 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 591995548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08089 FILM NUMBER: 97698341 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 September 26, 1997 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 October 20, 1997 was 58,452,152. DANAHER CORPORATION INDEX FORM 10-Q PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Condensed Balance Sheets at September 26, 1997 and December 31, 1996 . . . . . 1 Consolidated Condensed Statements of Earnings for the three months and nine months ended September 26, 1997 and September 27, 1996. . . . . . . . . . . .. . . . 2 Consolidated Condensed Statements of Cash Flow for the nine months ended September 26, 1997 and September 27, 1996 . . . . . 3 Notes to Consolidated Condensed Financial Statements. . . . . . . . . . . . . . . . . 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . 6 Liquidity and Capital Resources. . . . . . . . . . . 6 PART II - OTHER INFORMATION Item 1. Legal Proceedings . . . . . . . . . . . 7 Item 2. Change in Securities. . . . . . . . . . . . 7 Item 3. Defaults Upon Senior Securities . . . . . . 7 Item 4. Submission of matters to a vote of Security Holders. . . . . . . . . . . . . . 7 Item 5. Other Information . . . . . . . .. . . . . . 7 Item 6. Exhibits and Reports on Form 8-K . . . . . . 7 DANAHER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (000's omitted) September 26, December 31, 1997 1996 (NOTE 1) ASSETS Current Assets: Cash and cash equivalents $ 22,764 $ 26,444 Accounts receivable, net 322,066 266,668 Inventories: Finished goods 97,927 88,083 Work in process 50,948 49,681 Raw material and supplies 77,213 66,472 Total inventories 226,088 204,236 Prepaid expenses and other current assets 52,060 49,393 Total current assets 622,978 546,741 Property, plant and equipment, net of accumulated depreciation of $255,905 and $218,830, respectively 331,790 319,606 Other assets 101,810 105,903 Excess of cost over net assets of acquired companies, net 858,233 792,824 Total assets $1,914,811 $1,765,074 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable and current portion of long-term debt $ 19,122 $ 16,757 Accounts payable 130,374 110,194 Accrued expenses 425,523 347,622 Total current liabilities 575,019 474,573 Other liabilities 269,031 270,670 Long-term debt 200,402 219,570 Stockholders' equity: Common stock - $.01 par value 642 642 Additional paid-in capital 335,013 333,587 Retained earnings 613,934 506,773 Cumulative foreign translation adjustment and other (9,789) 8,858 Treasury stock (69,441) (49,599) Total stockholders' equity 870,359 800,261 Total liabilities and stockholders' equity $1,914,811 $1,765,074 See notes to consolidated condensed financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (000's omitted except per share amounts) (unaudited) Quarter Ended Nine Months Ended Sept. 26, Sept. 27, Sept 26, Sept. 27, 1997 1996 1997 1996 Net revenues $516,601 $470,787 $1,485,831 $1,315,241 Operating costs and expenses: Cost of sales 343,467 321,766 1,001,153 903,939 Selling, general and administrative expenses 95,851 83,266 274,383 233,072 Goodwill and other amortization 5,900 5,462 17,513 14,507 Total operating costs and expenses 445,218 410,494 1,293,049 1,151,518 Operating profit 71,383 60,293 192,782 163,723 Interest expense, net 2,891 5,248 9,991 11,212 Earnings from continuing operations before income taxes 68,492 55,045 182,791 152,511 Income taxes 26,711 21,468 71,217 59,481 Earnings from continuing operations $ 41,781 $ 33,577 $ 111,574 $ 93,030 Gain on sale of discontinued operations, net of taxes of $ -0- -- -- -- 79,811 Net Earnings $ 41,781 $ 33,577 $ 111,574 $ 172,841 Per Share: From continuing operations $ .69 $ .56 $ 1.85 $ 1.55 From discontinued operations -- -- -- 1.33 Net earnings $ .69 $ .56 $ 1.85 $ 2.88 Average common stock and equivalent shares outstanding 60,242,750 60,045,807 60,216,738 59,970,139 See notes to consolidated condensed financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (000's omitted) (unaudited) Nine Months Ended Sept. 26, 1997 Sept. 27, 1996 Cash flows from operating activities: Net earnings from operations $ 111,574 $ 93,030 Noncash items, depreciation and amortization 56,769 51,325 Increase in accounts receivable (42,199) (44,174) (Increase) decrease in inventories (441) 9,147 Increase in accounts payable 14,390 11,466 Change in other assets and liabilities 80,338 26,085 Total operating cash flows 220,431 146,879 Cash flows from investing activities: Sale of Fayette Tubular Products -- 155,000 Payments for additions to property, plant and equipment, net (36,994) (38,731) Cash paid for acquisitions (147,238) (235,503) Net cash used in investing activities (184,232) (119,234) Cash flow from financing activities: Acquisition of treasury stock (19,842) (12,110) Proceeds from issuance of common stock 1,426 1,796 Borrowings (repayments) of debt (16,803) 534 Payment of dividends (4,413) (3,772) Net cash provided by (used in) financing activities (39,632) (13,562) Effect of exchange rate changes on cash (247) (82) Net change in cash and cash equivalents (3,680) 14,011 Beginning balance of cash and cash equivalents 26,444 7,938 Ending balance of cash and cash equivalents $ 22,764 $ 21,949 Supplemental disclosures: Cash interest payments $ 9,584 $ 11,659 Cash income tax payments $ 49,441 $ 52,588 See notes to consolidated condensed financial statements. DANAHER CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (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 1996 Annual Report on Form 10-K. In the opinion of the registrant, the accompanying financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of the Company at September 26, 1997 and December 31, 1996, its results of operations for the three months and nine months ended September 26, 1997 and September 27, 1996, and its cash flows for the nine months ended September 26, 1997 and September 27, 1996. NOTE 2. ACQUISITION OF ACME-CLEVELAND CORPORATION The Company obtained control of Acme-Cleveland Corporation (Acme) as of July 2, 1996. Total consideration for Acme was approximately $200 million. The fair value of assets acquired was approximately $240 million and approximately $40 million of liabilities were assumed. The transaction is being accounted for as a purchase. The purchase price allocations have been completed on a preliminary basis, subject to adjustment should new or additional facts about the business become known. The unaudited pro forma information for the period set forth below gives effect to the transaction as if it had occurred at the beginning of each period. The pro forma information is presented for information purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time (unaudited, 000's omitted): Year Ended Nine Months Ended December 31, September 27, 1996 1996 Net Sales $1,885,700 $1,389,063 Net Earnings 129,197 94,268 Earnings per Share $ 2.15 $1.57 NOTE 3. DISCONTINUED OPERATIONS In January, 1996, the Company sold its Fayette Tubular Products subsidiary for $155 million cash. A gain of $79.8 million was recognized in the first quarter of 1996. NOTE 4. NONRECURRING TRANSACTIONS The Company sold its investment in Tylan General Corporation and recognized a gain of approximately $3.5 million before income taxes in the first quarter of 1997. This was offset by a charge to close facilities within the Hengstler subsidiary and relocate work to an existing company facility. NOTE 5. EARNINGS PER SHARE Statement of Financial Accounting Standards Number 128 will change the reporting of earnings per share effective in the fourth quarter of 1997. Basic earnings per share will not include stock options as common stock equivalents and will be higher than previously reported primary earnings per share. Diluted earnings per share will equal previously reported primary earnings per share under the Company's current capital structure. The pro-forma impact on previously reported 1996 and 1997 earnings per share would be as shown below. Year Nine Months 1996 1997 1996 Average shares outstanding (basic 58,623,470 58,804,608 58,510,944 earnings per share) Stock option equivalents 1,331,166 1,412,130 1,459,195 Average shares and equivalents (diluted 59,954,636 60,216,738 59,970,139 earnings per share) Continuing operations- Basic earnings per share $2.18 $1.90 $1.59 Diluted earnings per share $2.13 $1.85 $1.55 (Continued) Quarter 1997 1996 Average shares outstanding (basic 58,639,603 58,616,627 earnings per share) Stock option equivalents 1,603,147 1,429,180 Average shares and equivalents (diluted 60,242,750 60,045,807 earnings per share) Continuing operations- Basic earnings per share $ .71 $.57 Diluted earnings per share $ .69 $.56 NOTE 6. TENDER OFFER FOR EXIDE ELECTRONICS GROUP, INC. On July 10, 1997, the Company proposed to acquire all outstanding shares of Exide Electronics Group, Inc. for approximately $230 million in a merger transaction whereby Exide Electronics Group, Inc. shareholders would receive $20 per share in cash. If the merger is completed, which remains uncertain as of the date of this quarterly report, the Exide Electronics Group, Inc. businesses would be an addition to the Company's Process/ Environmental Controls business segment. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net revenues for the 1997 quarter and nine-month period were 10% and 13% higher compared to the corresponding periods in 1996. Customer demand was higher in all business segments. Acquisitions accounted for approximately 4% and 8% of sales growth in the quarter and the nine-month period. Gross profit margins for the 1997 third quarter and nine- month period, as a percentage of sales, were approximately 33.5% and 32.6%, respectively. For the quarter and nine-month period, gross profit margins are up 1.8 and 1.3 percentage points because the acquired companies provide a higher gross margin and productivity improvements within the existing business units were experienced. Selling, general and administrative expenses for the 1997 third quarter as a percentage of sales were approximately 0.9 percentage points higher than the 1996 level. For the 1997 nine-month period, these costs as a percentage of sales are also higher principally due to the higher overall selling expense structure of the acquired businesses. Interest expense for the 1997 quarter and nine-month period was 45% and 11% less than the 1996 levels due to lower average debt levels, principally due to strong operating cash flows. The effective tax rate is identical for all 1997 and 1996 periods. Liquidity and Capital Resources Total debt increased $3.8 million from the second quarter to $219.5 million. This reflects funds expended for the acquisition of Gems Sensors, offset by strong operating cash flows. The Company anticipates reductions in working capital levels in the fourth quarter. The Company's regular quarterly dividend of $.025 per share was declared for holders of record on September 26, 1997 payable on October 31, 1997. 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, acquisitions, dividends and scheduled debt repayments. PART II ITEM 1. Legal Proceedings None ITEM 2. Change in Securities None ITEM 3. Defaults upon Senior Securities None ITEM 4. Submission of Matters to a Vote of Security Holders None ITEM 5. Other Information None 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: October 21, 1997 By: /s/ Patrick W. Allender Patrick W. Allender Chief Financial Officer Date: October 21, 1997 By: /s/ C. Scott Brannan C. Scott Brannan Controller EX-27 2
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