-----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, VUqLg3qo8MUKc7/wubX3Qdbqe+s1WysSyyeHTvVOhovj4a6upQPMCFHDa8s0XJ8x P2VRWZg19UTyrqThJk0xCg== 0000313616-99-000007.txt : 19991022 0000313616-99-000007.hdr.sgml : 19991022 ACCESSION NUMBER: 0000313616-99-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991001 FILED AS OF DATE: 19991021 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: 99731419 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 October 1, 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 October 21, 1999 was 142,346,187. DANAHER CORPORATION INDEX FORM 10-Q PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Condensed Balance Sheets at October 1, 1999 and December 31, 1998 3 Consolidated Condensed Statements of Earnings for the three months and nine months ended October 1, 1999 and September 25, 1998 4 Consolidated Condensed Statements of Cash Flow for the nine months ended October 1, 1999 and September 25, 1998 5 Notes to Consolidated Condensed Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 PART II - OTHER INFORMATION Item 6. (a) Exhibits: 9 (b) Reports on Form 8-K: None DANAHER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (000's omitted) (Unaudited) October 1, December 31, 1999 1998 (Notes 1 and 3) ASSETS Current Assets: Cash and cash equivalents $ 280,138 $ 47,798 Accounts receivable, net 514,522 485,543 Inventories: Finished goods 146,769 130,463 Work in process 73,739 75,768 Raw material and supplies 128,941 131,250 Total inventories 349,449 337,481 Prepaid expenses and other current assets 64,442 60,874 Total current assets 1,208,551 931,696 Property, plant and equipment, net of accumulated depreciation of $543,143 and $493,332, respectively 508,732 510,198 Other assets 76,908 99,402 Excess of cost over net assets of acquired companies, net 1,286,533 1,299,563 Total assets $3,080,724 $2,840,859 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable and current portion of long-term debt $ 74,847 $ 59,721 Accounts payable 195,179 161,782 Accrued expenses 531,959 479,743 Total current liabilities 801,985 701,246 Other liabilities 289,405 294,907 Long-term debt 341,494 443,918 Stockholders' equity: Common stock-$.01 par value 1,542 1,536 Additional paid-in capital 417,510 332,054 Retained earnings 1,249,119 1,069,571 Accumulated other comprehensive income (20,331) (2,373) Total stockholders' equity 1,647,840 1,400,788 Total liabilities and stockholders' equity $3,080,724 $2,840,859 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 October 1, September 25, October 1, September 25, 1999 1998 1999 1998 Net sales $781,867 $758,253 $2,349,044 $2,211,462 Operating costs and expenses: Cost of sales 470,799 457,646 1,440,562 1,373,544 Selling, general and administrative expenses 182,515 189,332 545,280 538,275 Goodwill and other amortization 9,337 7,786 27,448 21,978 Total operating costs and expenses 662,651 654,764 2,013,290 1,933,797 Operating profit 119,216 103,489 335,754 277,665 Other (Note 3) 11,778 40,796 11,778 40,796 Interest expense, net 2,720 7,804 15,233 18,613 Earnings before income taxes 104,718 54,889 308,743 218,256 Income taxes 42,872 23,879 121,422 86,960 Net Earnings $ 61,846 $ 31,010 $ 187,321 $ 131,296 Basic earnings per share $ .43 $ .22 $1.32 $ .94 Average shares outstanding 142,494 140,482 141,457 139,561 Diluted earnings per share $ .42 $ .21 $1.28 $ .91 Average common stock and equivalent shares outstanding 146,785 144,488 145,852 143,789 See notes to consolidated condensed financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (000's omitted) (unaudited) Nine Months Ended October 1, September 25, 1999 1998 Cash flows from operating activities: Net earnings from operations $ 187,321 $ 131,296 Noncash items, depreciation and amortization 96,460 84,069 Change in accounts receivable (16,481) 10,345 Change in inventories (12,872) (26,614) Change in accounts payable 27,713 1,234 Change in other assets and liabilities 83,361 58,149 Total operating cash flows 365,502 258,479 Cash flows from investing activities: Payments for additions to property, plant, and equipment, net (61,508) (76,681) Cash paid for acquisitions (60,380) (524,345) Net cash used in investing activities (121,888) (601,026) Cash flows from financing activities: Proceeds from sale of treasury stock 69,845 -- Proceeds from issuance of common stock 15,617 24,956 Borrowing (repayments) of debt (88,144) 291,239 Payment of dividends (7,773) (9,761) Net cash provided by (used in) financing activities (10,455) 306,434 Effect of exchange rate changes on cash (819) 808 Net change in cash and cash equivalents 232,340 (35,305) Beginning balance of cash and cash equivalents 47,798 80,578 Ending balance of cash and cash equivalents $ 280,138 $ 45,273 Supplemental disclosures: Cash interest payments $ 9,635 $ 18,733 Cash income tax payments $ 82,210 $ 85,978 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 October 1, 1999 and December 31, 1998, its results of operations for the three months and nine months ended October 1, 1999 and September 25, 1998, and its cash flows for the nine months ended October 1, 1999 and September 25, 1998. Total comprehensive income was as follows: 1999 1998 (millions) Quarter $73.4 $29.9 Nine Months $169.4 $136.1 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 the quarter and nine months ended October 1, 1999 and September 25, 1998 are shown below: Net Sales Quarter Nine Months 1999 1998 1999 1998 Process/Environmental Controls $455,057 $440,378 $1,369,200 $1,280,052 Tool and Components 326,810 317,875 979,844 931,410 $781,867 $758,253 $2,349,044 $2,211,462 Operating Profit Quarter Nine Months 1999 1998 1999 1998 Process/Environmental Controls $73,936 $61,921 $215,680 $178,361 Tool and Components 48,981 44,983 132,316 111,040 Other (3,701) (3,415) (12,242) (11,736) $119,216 $103,489 $335,754 $277,665 NOTE 3. MERGERS On July 14, 1999, the Company acquired Hach Company. The Company issued .2987 shares of common stock in exchange for each outstanding share of Hach Company. The transaction was a tax-free reorganization and was accounted for as a pooling-of- interests. Accordingly, the financial statements presented have been restated to reflect the combined companies. Sales reported have increased $111.1 million for the nine months ended October 1, 1999 and $104.0 million for the nine months ended September 25, 1998. Hach is engaged in the manufacture and marketing of instruments and kits to analyze the chemical and other properties of water and aqueous solutions. Third quarter 1999 results include a one-time charge of $11.8 million ($9.8 million after-tax or $0.07 per diluted share) to reflect the costs of the transaction and the elimination of redundant activities and operations. After consideration of the one-time charge above, net income increased $2.0 million for the nine months ended October 1, 1999 and $6.4 million for the nine months ended September 25, 1998 due to the Hach acquisition. On July 9, 1998, the Company acquired Fluke Corporation in a transaction accounted for as a pooling-of-interests. Third quarter 1998 results include a one-time charge of $40.8 million ($28.6 million after-tax or $0.20 per diluted share) to reflect the costs of the transaction and its integration into the Company. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales for the 1999 quarter were 3.1% higher than the 1998 quarter. Net sales for the nine-month period were 6.2% higher than the corresponding period in 1998. This is principally due to continued increases in shipment volume in both segments and the effect of acquisitions, with comparable companies accounting for approximately 2% of sales growth in the nine-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 39.8% for the quarter and 38.7% for the nine-month period, an increase of 0.8 percentage points from the 1998 nine-month period and 0.1 percentage points from the 1998 third quarter. The year to date 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 23.3% for the 1999 quarter and 23.2% for the nine month period. This represents a decrease of 1.7 and 1.1 percentage points from the 1998 quarter and year to date periods, respectively. The decreases are driven by cost reduction efforts across both business segments. Interest expense for the quarter was 65.2% lower due to strong cash flow experienced in 1999 and 1998. For the nine-month period, interest expense was 18.2% lower, due to lower average debt levels resulting from strong operating cash flow. The effective tax rate decreased 2.6 percentage points for the third quarter and 0.5 percentage points for the nine- month period from 1998 respective periods, mainly due to a higher level of non-deductible merger costs in 1998. Liquidity and Capital Resources Since December 31, 1998, the Company has experienced increases in inventory and accounts payable. This is due to seasonally lower levels experienced at the end of 1998 caused by the holiday season. Total debt decreased by $87.3 million and cash increased by $232.3 million from year end primarily as a result of strong operating cash flow. The Company's cash equivalents as of October 1, 1999 are invested in highly liquid investment grade debt instruments with a maturity of ninety days or less. A regular quarterly dividend of $.015 per share was declared, payable on October 29, 1999 to holders of record on September 24, 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: October 21, 1999 By: /s/ Patrick W. Allender Patrick W. Allender Chief Financial Officer Date: October 21, 1999 By: /s/ Christopher C. McMahon Christopher C. McMahon Controller EX-27 2
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