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 30, 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 October 20, 1994
was 28,572,941. <PAGE>
DANAHER CORPORATION
INDEX
FORM 10-Q
PART I - FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
at September 30, 1994 and December 31, 1993. . . . . . . . . . . . 1
Consolidated Condensed Statements of Earnings for the three
months and nine months ended September 30, 1994 and
October 1, 1993. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Consolidated Condensed Statements of Cash Flow for the nine
months ended September 30, 1994 and October 1, 1993. . . . .3
Notes to Consolidated Condensed
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . .4
Item 2.
Managements's Discussion and Analysis of Financial Condition
and Results of Operations .. . . . . . . . . . . . . . . . . . . .5
Liquidity and Capital Resources. . . . . . . . . .. . . .. . . . . . .5
PART II - OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . .. . . . . . . .6
Item 2. Change in Securities. . . . . . . .. . . . . . . . . . .6
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . .6
Item 4. Submission of matter to a vote of Security
Holders. . . . . . . . . . . . . . . . . . . . . . 6
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . .6
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . .6
<PAGE>
DANAHER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(000's omitted)
September 30, 1994
(unaudited)
December 31, 1993
(Note 1)
ASSETS
Current Assets:
Cash and cash equivalents
$21,641
$ 6,767
Account receivable, net
Inventories:
Finished goods
Work in process
Raw material and supplies
186,368
82,479
21,252
31,080
135,445
59,916
19,900
27,753
Total inventories
134,811
107,569
Prepaid expenses and other current assets
42,083
27,982
Total current assets
384,903
277,763
Property, plant and equipment, net of
depreciation of $146,500 and $122,624
respectively
244,779
235,666
Other assets
21,284
21,477
Excess of cost over net assets of acquired
companies, net
334,670
337,566
Total assets
$985,636
$872,472
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt
Accounts payable
Accrued expenses
$335
86,617
200,612
$ 2,235
72,445
160,685
Total current liablities
287,564
235,365
Other liabilities
141,932
142,091
Long-term debt
131,215
131,350
Stockholders' equity:
Common stock - $.01 par value
Additional paid-in capital
Retained earnings
Cumulative foreign translation adjustment
Treasury stock
310
284,252
177,419
433
(37,489)
309
279,532
123,095
(1,781)
(37,489)
Total stockholders' equity
424,925
363,666
Total liabilities and stockholders' equity
$985,636
$872,472
<PAGE>
DANAHER CORPORATION
CONSOLIDATION CONDENSED STATEMENTS OF
EARNINGS
(000's omitted except per share amounts)
(unaudited)
Quarter Ended
Nine Months
Ended
Sept. 30,
1994
Oct. 1,
1993
Sept.
30,
1994
Oct. 1,
1993
Net revenues
$326,386
$281,017
$933,621
$788,303
Operating costs and expenses:
Cost of sales
Selling, general and administrative expenses
Goodwill and other amortization
Total operating costs and expenses
232,011
51,177
2,421
285,609
206,795
44,137
2,432
253,364
675,930
147,563
7,263
830,756
581,387
127,318
7,133
715,838
Operating profit
40,777
27,653
102,865
72,465
Interest expense, net
2,279
2,705
7,089
8,067
Earnings before income taxes and cumulative
effect of
accounting change
38,498
24,948
95,776
64,398
Income taxes
15,400
10,480
38,884
27,050
Earnings before cumulative effect of accounting
change
23,098
14,468
56,892
37,348
Cumulative effect of accounting change (net of
tax
benefit of $20,000)
-
-
-
(36,000)
Net Earnings
$23,098
$14,468
$56,892
$1,348
Per share:
Before accounting change
Cumulative effect of change
Net earnings
$ .79
-
$ .79
$ .50
-
$ .50
$ 1.95
-
$ 1.95
$ 1.29
(1.25)
$ .04
Average common stock and equivalent shares
outstanding
29,230,863
28,950,256
29,145,050
28,845,775
See notes to consolidated condensed financial statements.<PAGE>
DANAHER CORPORATION
CONSOLIDATION CONDENSED STATEMENTS OF CASH
FLOW
(000's omitted except per share amounts)
(unaudited)
Nine Months Ended
Sept. 30,
1994
Oct. 1,
1993
Cash flows from operating activities:
Earnings before cumulative effect of accounting change
Noncash items, depreciation and amortization
Increase in accounts receivable
Increase in inventories
Increase in accounts payables
Change in other assets and liabilities
Total operating cash flows
$56,892
31,064
(48,115)
(24,147)
12,223
24,506
52,423
$37,348
31,830
(36,040)
(6,142)
9,861
37,015
73,872
Cash flows from investing activities:
Payments for additions to property, plant and equipment, net
Cash paid for acquisitions
Net cash used in investing activities
(29,287)
(4,580)
(33,867)
(29,434)
(35,000)
(64,434)
Cash flow from financing activities:
Proceeds from issuance of common stock
Repayments of debt
Payment of dividends
Proceeds from notes payable
Debt issuance expenditures
Net cash provided by (used in) financing activities
901
(2,035)
(2,565)
-
-
(3,699)
1,192
(28,576)
(1,702)
30,000
(160)
754
Effect of exchange rate changes on cash
17
562
Net change in cash cash equivalents
14,874
10,754
Beginning balance of cash and cash equivalents
6,767
1,691
Ending balance of cash and cash equivalents
$21,641
$12,445
Supplemental disclosures:
Cash interest payments
Cash income tax payments
$4,758
$35,725
$5,374
$24,514
See notes to consolidated condensed financial statements.<PAGE>
DANAHER CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
SEPTEMBER 30, 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 September 30, 1994 and December 31, 1993, its
results of operations for the three months and nine months ended
September 30, 1994 and October 1, 1993, and its cash flows for the
nine months ended September 30, 1994 and October 1, 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 excepted 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
reclassifications to the Company's balance sheet.<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF
OPERATIONS
Results of Operations
Net revenues for the 1994 quarter and nine-month period were
16.1% and 18.4% higher compared to the corresponding periods in
1993. Customer demand was higher in all business segments.
Acquisitions accounted for approximately 2% of sales growth in the
quarter and 5% of sales growth in the nine-month period.
Gross profit margin for the 1994 third quarter and nine-month
period, as a percentage of sales, was approximately 28.9% and 27.6%,
respectively, representing 2.5 and 1.4 percentage point increases from
1993 levels. Productivity improvements, combined with increased fixed
cost leverage drove this improvement.
Selling, general and administrative expenses for the 1994 third
quarter as a percentage of sales were approximately .03 percentage
points lower than the 1993 level. For the 1994 nine-month period,
these costs as a percentage of sales are also lower principally due to
restructuring and other cost reduction actions taken in earlier periods,
and the fixed nature of certain costs.
Interest expense for the 1994 quarter and nine-month period was
15.7% and 12.1 lower than the 1993 levels, principally due to lower
average debt levels.
The effective tax rate for both the third quarter and nine-month
period is lower in 1994 than in 1993. This relfects 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 of their initial and ongoing impact.
Liquidity and Capital Resources
Cash and cash equivalents increased $4.7 million in the third
quarter to $21.6 million. This reflects net earnings offset by an increase
in net working capital. Increased accounts receivable and inventory
levels were largely related to the consumer hand tool business which had
just entered its peak selling season. The Company anticipates
reductions in working capital levels in the fourth quarter.
The Company's regular quarterly dividend of $.03 per share was
declared for holders of record on September 26, 1994, payable on
October 28, 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. <PAGE>
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: None
(b) Reports on Form 8-K: None
<PAGE>
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 20, 1994 By: /s/ Patrick W. Allender
Patrick W. Allender
Chief FinancialOfficer
Date: October 20, 1994 By: /s/ C. Scott Brannan
C. Scott Brannan
Controller
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<PERIOD-END> SEP-30-1994
<CASH> 21641
<SECURITIES> 0
<RECEIVABLES> 196664
<ALLOWANCES> 10296
<INVENTORY> 134811
<CURRENT-ASSETS> 384903
<PP&E> 391279
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<TOTAL-ASSETS> 985636
<CURRENT-LIABILITIES> 287564
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<COMMON> 310
0
0
<OTHER-SE> 424615
<TOTAL-LIABILITY-AND-EQUITY> 985636
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<CGS> 675930
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<INTEREST-EXPENSE> 7089
<INCOME-PRETAX> 95776
<INCOME-TAX> 38884
<INCOME-CONTINUING> 56892
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
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