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
<PAGE>
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.<PAGE>
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.<PAGE>
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. <PAGE>
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.
<PAGE>
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
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