-----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, B5jRIGHNfncUWBnrVNCcJ78p0o5BGYbfTPVxouePB5KcbsyJ1U+wIiCbvPR0PdbS 7Hjgc5oUEU+/440B0g7Lbg== 0000313616-99-000005.txt : 19990723 0000313616-99-000005.hdr.sgml : 19990723 ACCESSION NUMBER: 0000313616-99-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990702 FILED AS OF DATE: 19990722 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: 99668275 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 FORM 10Q 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 2, 1999 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 22, 1999 was 142,172,024. DANAHER CORPORATION INDEX FORM 10-Q PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Condensed Balance Sheets at July 2, 1999 and December 31, 1998 3 Consolidated Condensed Statements of Earnings for the three months and six months ended July 2, 1999 and June 26, 1998 4 Consolidated Condensed Statements of Cash Flow for the six months ended July 2, 1999 and June 26, 1998 5 Notes to Consolidated Condensed Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II - OTHER INFORMATION Item 6. (a) Exhibits: 8-9 (b) Reports on Form 8-K: None DANAHER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (000's omitted) July 2, December 31, 1999 1998 (unaudited) (Note 1) ASSETS Current Assets: Cash and cash equivalents $ 128,008 $ 41,923 Accounts receivable, net 433,698 467,108 Inventories: Finished goods 130,455 122,141 Work in process 73,022 74,385 Raw material and supplies 126,355 126,960 Total inventories 329,832 323,486 Prepaid expenses and other current assets 58,470 54,387 Total current assets 950,008 886,904 Property, plant and equipment, net of accumulated depreciation of $466,993 and $441,593, respectively 460,214 471,025 Other assets 95,491 96,213 Excess of cost over net assets of acquired companies, net 1,246,479 1,284,573 Total assets $2,752,192 $2,738,715 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable and current portion of long-term debt $ 58,534 $ 59,639 Accounts payable 179,908 158,596 Accrued expenses 459,751 470,470 Total current liabilities 698,193 688,705 Other liabilities 263,450 285,261 Long-term debt 341,282 412,918 Stockholders' equity: Common stock-$.01 par value 1,471 1,467 Additional paid-in capital 386,161 374,412 Retained earnings 1,092,759 978,655 Accumulated other comprehensive income (31,124) (2,703) Total stockholders' equity 1,449,267 1,351,831 Total liabilities and stockholders' equity $2,752,192 $2,738,715 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 2, June 26, July 2, June 26, 1999 1998 1999 1998 Net revenues $741,778 $736,428 $1,496,368 $1,382,668 Operating costs and expenses: Cost of sales 459,039 462,983 938,480 881,077 Selling, general and administrative expenses 165,716 173,471 335,757 321,204 Goodwill and other amortization 8,885 8,100 18,053 14,499 Total operating costs and expenses 633,640 644,554 1,292,290 1,216,780 Operating profit 108,138 91,874 204,078 165,888 Interest expense, net 5,696 6,983 11,947 10,180 Earnings before income taxes 102,442 84,891 192,131 155,708 Income taxes 39,440 32,683 73,970 59,297 Net Earnings $ 63,002 $ 52,208 $ 118,161 $ 96,411 Basic earnings per share $ .46 $ .39 $ .87 $ .72 Average shares outstanding 135,894 134,142 135,766 134,087 Diluted earnings per share $ .45 $ .38 $ .84 $ .70 Average common stock and equivalent shares outstanding 140,413 138,551 140,151 138,399 See notes to consolidated condensed financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (000's omitted) (unaudited) Six Months Ended July 2, June 26, 1999 1998 Cash flows from operating activities: Net earnings from operations $ 118,161 $ 96,411 Noncash items, depreciation and amortization 61,739 50,683 Decrease in accounts receivable 27,717 22,603 Increase in inventories (9,026) (29,164) Increase in accounts payable 22,719 8,032 Change in other assets and liabilities (34,365) 41,535 Total operating cash flows 186,945 190,100 Cash flows from investing activities: Payments for additions to property, plant, and equipment, net (35,146) (39,039) Cash paid for acquisitions -- (375,441) Net cash provided by (used in) investing activities (35,146) (414,480) Cash flows from financing activities: Proceeds from issuance of common stock 11,753 3,766 Borrowing (repayments) of debt (72,741) 233,404 Payment of dividends (4,057) (6,131) Net cash used in financing activities (65,045) 231,039 Effect of exchange rate changes on cash (669) (896) Net change in cash and cash equivalents 86,085 5,763 Beginning balance of cash and cash equivalents 41,923 70,821 Ending balance of cash and cash equivalents $ 128,008 $ 76,584 Supplemental disclosures: Cash interest payments $ 11,952 $ 9,849 Cash income tax payments $ 67,285 $ 37,003 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 1998 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 2, 1999 and December 31, 1998, its results of operations for the three months and six months ended July 2, 1999 and June 26, 1998, and its cash flows for the six months ended July 2, 1999 and June 26, 1998. Total comprehensive income was as follows: 1999 1998 (millions) Quarter $53.7 $54.3 Six Months $89.7 $94.5 Total comprehensive income for all periods represents net income and the change in cumulative foreign translation adjustment. NOTE 2. SEGMENT INFORMATION Segment information is presented consistently with the basis described in the 1998 Annual Report. There has been no material change in total assets or liabilities by segment. Segment results for 1999 are shown below: Sales-Quarter Sales-Six Months 1999 1998 1999 1998 Process/Environmental Controls $410,590 $422,603 $843,334 $769,133 Tool and Components 331,188 313,825 653,034 613,535 $741,778 $736,428 $1,496,368 $1,382,668 Op Profit-Quarter Op Profit-Six Months 1999 1998 1999 1998 Process/Environmental Controls $64,534 $59,902 $129,284 $108,152 Tool and Components 48,045 36,566 83,335 66,057 Other (4,441) (4,594) (8,541) (8,321) $108,138 $91,874 $204,078 $165,888 NOTE 3. MERGER WITH HACH COMPANY On July 14, 1999, the Company announced completion of the Hach merger whereby the Company issued .2987 shares of common stock in exchange for each outstanding share of Hach Company. The transaction will be a tax-free reorganization and will be accounted for as a pooling-of-interests. Accordingly, future financial statements will be restated to reflect the combined companies. Sales reported will increase $137.0 million in 1998 and $127.1 million in 1997. Reported net income will increase $9.2 million in 1998 and $12.0 million in 1997. 1998 reported diluted earnings per share will increase approximately $.01 and 1997 reported diluted earnings per share will increase approximately $.03. Results for interim periods have not yet been determined on a combined company basis. Hach is engaged in the manufacture and marketing of instruments and kits to analyze the chemical and other properties of water and aqueous solutions. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales for the 1999 quarter were 1% higher than the 1998 quarter. Net sales for the six-month period were 8% higher than the corresponding period in 1998. This is principally due to continued increases in shipment volume in all segments and the effect of acquisitions, with comparable companies accounting for approximately 2% of sales growth in the six-month period. Acquisitions, net of divested businesses, did not have a significant effect on sales growth for the quarter. Gross profit margin in 1999, as a percentage of sales, was approximately 38.1% for the quarter and 37.3% for the six-month period, an increase of 1.0 percentage points from 1998 levels. The gross margin increase was attributable to both the effect of cost reduction efforts and productivity improvements within the existing business units. Selling, general and administrative expenses for the 1999 quarter decreased in total dollars reflecting cost reduction efforts. Selling, general and administrative expenses as a percentage of sales was 22.3% for the 1999 quarter and 22.4% for the six month period, respectively. This represents a decrease of 1.3 and 0.8 percentage points, respectively, from prior periods. This reflects principally cost reduction efforts across both business segments. Interest expense for the quarter was 18.4% lower due to strong cash flow experienced in 1999 and 1998. For the six-month period, interest expense was 17.4% higher, due to higher average debt levels, reflecting the funding of acquisitions at the end of the 1998 first quarter. The effective tax rate is consistent for the second quarter. The six-month period is .4 percent points higher in 1999 than 1998, mainly due to adjustments to the tax rate made by Fluke in the 1998 first quarter, which represented the fiscal year-end for Fluke. Liquidity and Capital Resources Since December 31, 1998, the Company has experienced increases in inventory and accounts payable. This is due to the lower activity levels experienced in the last weeks of 1998 caused by the holiday season. Total debt decreased to $399.8 million at July 2, 1999, primarily as a result of strong operating cash flow. A regular quarterly dividend of $.015 per share was declared, payable on July 30, 1999 to holders of record on June 25, 1999. 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 - OTHER INFORMATION 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 22, 1999 By: /s/ Patrick W. Allender Patrick W. Allender Chief Financial Officer Date: July 22, 1999 By: /s/ C. Scott Brannan C. Scott Brannan Controller EX-27 2
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