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 March 29, 1996
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 April
17, 1996 was 58,140,968.<PAGE>
DANAHER CORPORATION
INDEX
FORM 10-Q
PART I - FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
at March 29, 1996 and December 31, 1995 1
Consolidated Condensed Statements of
Earnings for the three months ended
March 29, 1996 and March 31, 1995 2
Consolidated Condensed Statements of
Cash Flow for the three months ended
March 29, 1996 and March 31, 1995 3
Notes to Consolidated Condensed
Financial Statements 4
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 5
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 6
(27) Financial Data Schedules
<PAGE>
DANAHER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(000's omitted)
March 29, December 31,
1996 1995
(unaudited) (NOTE 1)
ASSETS
Current Assets:
Cash and equivalents $ 15,867 $ 7,938
Accounts receivable, net 250,398 224,652
Inventories:
Finished goods 98,672 89,932
Work in process 47,415 51,904
Raw material and supplies 60,686 60,054
Total inventories 206,773 201,890
Prepaid expenses and other
current assets 36,981 31,990
Total current assets 510,019 466,470
Property, plant and equipment,
net of depreciation of
$183,928 and $168,566,
respectively 293,438 291,937
Other assets 83,594 119,444
Excess of cost over net assets
of acquired companies, net 616,429 608,140
Total assets $ 1,503,480 $1,485,991
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current
portion of long-term debt $ 50,065 $ 14,970
Accounts payable 96,757 92,290
Accrued expenses 347,931 296,878
Total current liabilities 494,753 404,138
Other liabilities 227,269 226,925
Long-term debt 101,680 268,617
Stockholders' equity:
Common stock-$.01 par value 634 634
Additional paid-in capital 315,931 315,205
Retained earnings 409,939 304,363
Cumulative foreign
translation adjustment 2,873 3,598
Treasury stock (49,599) (37,489)
Total stockholders'equity 679,778 586,311
Total liabilities and
stockholders' equity $1,503,480 $ 1,485,991
See notes to consolidated condensed financial statements.<PAGE>
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(000's omitted except per share amounts)
(unaudited)
Three Months Ended
March 29, March 31,
1996 1995
Net sales $ 409,557 $ 335,982
Cost of sales 285,264 239,275
Selling, general and
administrative expenses 72,872 56,532
Goodwill and other
amortization 4,293 3,337
Total operating expenses 362,429 299,144
Operating profit 47,128 36,838
Interest expense, net 2,983 1,224
Earnings from continuing
operations before
income taxes 44,145 35,614
Income taxes 17,217 14,202
Earnings from continuing
operations 26,928 21,412
Earnings from discontinued
operations, net of income
taxes of $-0- and $279 79,811 436
Net earnings $ 106,739 $ 21,848
Per share:
Continuing operations $ .45 $ .36
Discontinued operations 1.34 .01
Net earnings $ 1.79 $ .37
Average common stock and
common equivalent
shares outstanding 59,680,406 59,771,541
See notes to consolidated condensed financial statements.
<PAGE>
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(000's omitted)
(unaudited)
Three Months Ended
March 29, March 31,
1996 1995
Cash flows from operating
activities:
Net earnings from operations $26,928 $21,848
Noncash items, depreciation
and amortization 16,818 17,341
Increase in accounts
receivable (22,075) (14,215)
Increase in inventories (785) (23,262)
Increase in accounts payable 4,071 12,160
Change in other assets and
liabilities 9,566 18,150
Total operating cash flows 34,523 32,022
Cash flows from investing activities:
Sale of Fayette Tubular
Products 155,000 -
Payments for additions to
property, plant, and
equipment, net (12,107) (16,652)
Cash paid for acquisitions (25,073) -
Net cash provided by (used in)
investing activities 117,820 (16,652)
Cash flows from financing activities:
Acquisition of treasury stock(12,110) -
Proceeds from issuance of
common stock 726 2,319
Dividends paid (1,163) (1,168)
Repayment of debt (131,842) (3,558)
Net cash used in
financing activities (144,389) (2,407)
Effect of exchange rate
changes on cash (25) 808
Net change in cash and
equivalents 7,929 13,771
Beginning balance of cash
equivalents 7,938 1,978
Ending balance of cash
equivalents $ 15,867 $15,749
Supplemental disclosures:
Cash interest payments $ 1,551 $ 309
Cash income tax payments $ 16,180 8,157
See notes to consolidated condensed financial statements.
<PAGE>
DANAHER CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
March 29, 1996
(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 1995 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 March 29,
1996 and December 31, 1995, its results of operations for
the three months ended March 29, 1996 and March 31, 1995,
and its cash flows for the three months ended March 29,
1996 and March 31, 1995.
NOTE 2. ACQUISITION OF JOSLYN CORPORATION
The Company obtained control of Joslyn Corporation
(Joslyn) as of September 1, 1995 when Joslyn's
shareholders tendered approximately 75% of the
outstanding shares to Danaher for $34 per share in cash.
The remaining 25% was acquired on October 31, 1995.
Total consideration for Joslyn was approximately $245
million. The fair value of assets acquired was
approximately $345 million and approximately $100 million
of liabilities was 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 informational 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. Amounts
for 1994 include Joslyn's $35 million ($21 million after
tax benefit or $0.36 per share) provision for
environmental remediation associated with sites
previously owned by Joslyn (unaudited, 000's omitted):
Year Ended Year Ended Quarter Ended
December 31, December 31, March 31,
1994 1995 1995
Net Sales $ 1,330,150 $1,640,554 $ 392,505
Net Earnings 59,696 109,919 20,106
Earnings per
Share $1.02 $1.84 $ .34
NOTE 3. DISCONTINUED OPERATIONS
In January, 1996, the Company sold its Fayette
Tubular Products (Fayette) subsidiary for $155 million in
cash. A gain of $79.8 million was recognized in the
first quarter of 1996. As the Company no longer operates
in the Transportation business segment, amounts for 1995
have been restated to reflect Fayette as a discontinued
operation.
NOTE 4. TENDER OFFER FOR ACME-CLEVELAND CORPORATION
On March 7, 1996, the Company proposed to acquire
all outstanding shares of Acme-Cleveland Corporation
(NYSE:AMT) for approximately $180 million in a merger
transaction whereby Acme-Cleveland shareholders would
receive $27 per share in cash. If the merger is
completed, which remains uncertain as of the date of this
quarterly report, the Acme-Cleveland 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 Sales for the first quarter of 1996 of $409.6
million were 22% higher than the 1995 quarter. Sales
were higher in both business segments. Of this increase,
acquisitions accounted for approximately 19% and
companies included in both periods accounted for 3%.
Increases in the volume of shipments in all business
segments provided this growth.
Gross profit margin for the first quarter of 1996,
as a percentage of sales, was 30.3% which represents a
1.6 percentage point increase from 1995 levels. This
results both from the effect of the acquired companies
which provide a higher gross margin and productivity
improvements within the existing business units.
Selling, general and administrative expenses for the
1996 first quarter were 29% higher than in 1995 because
of higher sales levels. As a percentage of sales, these
costs increased to 17.8% from 16.8% in 1995, as a result
of the acquired businesses which have a higher overall
selling expense structure than the existing business
units.
Interest expense of $2,983,000 in 1996 was higher
than the corresponding 1995 period. Total debt levels
were higher in 1996, reflecting the acquisitions made in
1995.
The 1996 effective tax rate of 39.0% is lower than
the 1995 effective rate, reflecting the lesser impact of
nondeductible goodwill amortization given higher pretax
earnings and a lower income tax expense for certain
foreign operations.
Liquidity and Capital Resources
During the first quarter of 1996, the Company
experienced increases in accounts receivable, inventory,
and accounts payable. This is principally due to the
lower activity levels experienced in the last weeks of
the 1995 year due to the holiday season. Total debt
under the Company's borrowing facilities decreased to
$151.7 million at March 29, 1996, compared to $283.6
million at December 31, 1995, due to the proceeds from
the sale of Fayette along with earnings for the quarter
offset somewhat by the seasonal working capital increase
discussed above.
The Company declared a regular quarterly
dividend of $.02 per share payable on April 26, 1996, to
holders of record on March 22, 1996.
The Company's cash provided from operations, as
well as credit facilities available, should provide
sufficient available funds to meet normal working capital
requirements, capital expenditures, dividends, scheduled
debt repayments, and to fund the Acme-Cleveland
acquisition, if applicable.
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: April 18, 1996 By: /s/ Patrick W. Allender
Patrick W. Allender
Chief Financial Officer
Date: April 18, 1996 By: /s/ C. Scott Brannan
C. Scott Brannan
Controller
