SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
[ X ] SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES 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 (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: 202-828-0850
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Exchanges
Title of each class on which registered
Common Stock $.01 par Value New York Stock Exchange, Inc.
Pacific Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
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 __
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10- K. [X]
As of March 27, 1997, the number of shares of common stock outstanding
was 58,921,377 and were held by approximately 3,000 holders. The
aggregate market value of common shares held by non-affiliates of the
Registrant on such date was approximately $1.4 billion, based upon the
closing price of the Company's common shares as quoted on the New York
Stock Exchange composite tape on such date.
EXHIBIT INDEX APPEARS ON PAGE 8 <PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Part II and Part IV incorporate certain information by reference from
the registrant's Annual Report to Shareholders for the year ended
December 31, 1996. With the exception of the pages of the Annual
Report to Shareholders specifically incorporated herein by reference,
the Annual Report to Shareholders is not deemed to be filed as part of
this Form 10-K.
Part III incorporates certain information by reference from the
registrant's proxy statement for its 1997 annual meeting of
stockholders. With the exception of the pages of the 1997 Proxy
Statement specifically incorporated herein by reference, the 1997
Proxy Statement is not deemed to be filed as part of this Form 10-K.
ITEM 1. BUSINESS
General
Danaher Corporation ("Danaher" or the "Company"), originally
DMG, Inc., was organized in 1969 as a Massachusetts real estate
investment trust. In 1978 it was reorganized as a Florida corporation
under the name Diversified Mortgage Investors, Inc. ("DMI") which in a
second reorganization in 1980 became a subsidiary of a newly created
holding company named DMG, Inc. The Company adopted the name Danaher
in 1984 and was reincorporated as a Delaware corporation following the
1986 annual meeting of shareholders.
The Company conducts its operations through two business
segments: Tools and Components and Process/Environmental Controls.
Tools and Components
The Tools and Components segment is comprised of the Danaher
Hand Tool Group (including Special Markets and Professional Tool
Division, which includes Armstrong Bros. Tool Co., a premier
manufacturer and marketer of industrial hand tools), Matco Tools
("Matco"), Jacobs Chuck Manufacturing Company ("Jacobs"), Iseli
Company ("Iseli"), Delta Consolidated Industries, Jacobs Vehicle
Systems, Hennessy Industries and the hardware and electrical
apparatus lines of Joslyn Manufacturing Company (JMC). This segment
is one of the largest domestic producers and distributors of general
purpose mechanics' hand tools and automotive specialty tools. Other
products manufactured by these companies include tool boxes and
storage devices, diesel engine retarders, wheel service equipment,
drill chucks, custom designed headed tools and components, hardware
and components for the power generation and transmission industries,
high quality precision socket screws, fasteners, and high quality
miniature precision parts.
The Company's business strategy in this segment is focused on
increasing sales to existing customers, broadening channels of
distribution, developing new products and achieving production
efficiencies and enhanced quality and customer service through
"Just-In-Time" and related manufacturing techniques.
Danaher Tool Group (DTG) is one of the largest domestic
producers of general purpose mechanics' hand tools (primarily
ratchets, sockets and wrenches) and specialized automotive service
tools for the professional and "do-it-yourself" markets. DTG has been
the principal manufacturer of Sears, Roebuck and Co.'s Craftsman line
of mechanics' hand tools for over 50 years. Approximately 80% of the
over 100 million pieces sold to Sears annually are sold in tool sets
that include from three to 900 pieces. Net sales to Sears were
approximately 14% of total Company sales in 1996.
DTG's Special Markets Group sells to Sears under a five year
evergreen agreement, that requires Sears to purchase a significant
portion of its annual requirements for its private-label Craftsman
mechanics' hand tool line from DTG.
For over 30 years, DTG has also been a primary supplier of
specialized automotive service tools to NAPA, which has approximately
6,500 outlets at present. In addition, DTG has been the designated
supplier of general purpose mechanics' hand tools to NAPA since 1983.
DTG specialized automotive service tools are also sold under the K-D
Tools brand, its industrial tools and products are also sold under
the Armstrong and Allen brand names, and fastener products under the
Holo-Krome name are sold to independent distributors and other
customers in the "do-it-yourself," professional automotive, commercial
and industrial markets.
Professional mechanics' tools are distributed by Matco which
has approximately 1,100 independent mobile distributors who sell
primarily to individual professional mechanics. Matco is one of the
leading suppliers in this market.
Jacobs is the market leader in the drill chuck business with
its highly respected and well recognized brand name and Iseli is a
leader in the manufacture of miniature precision parts produced on
Swiss screw machines.
Delta is the market leader in boxes and other storage
containers serving the vehicle aftermarket and manufactures and
markets containers serving numerous specialty areas.
Wheel service equipment is manufactured under the Coats, Bada
and Ammco brand names. Products include tire changers, wheel
balancers, wheel weights and brake service equipment. Wheel service
equipment is sold primarily to wholesale distributors and national
accounts. These markets are served by the Company's sales personnel.
Diesel engine retarders are manufactured at Jacobs. The "Jake
Brake" technology was developed by Jacobs and represents the premier
brand of engine retarders. The product is sold by Jacobs' sales
personnel to original equipment manufacturers and aftermarket
distributors.
The nation's oldest manufacturer of poleline hardware and a
U.S. market share leader, the hardware division of JMC manufactures a
wide variety of products used in the construction and maintenance of
electric power, telephone and cable television systems. Its products
range from specialized fasteners to sophisticated castings and
forgings.
The electrical apparatus division of JMC manufactures surge
protection devices rated as high as 468,000 volts for the electric
power utility industry. Surge arresters are designed to eliminate the
damaging effects of electrical surges caused by lightning and other
overvoltage conditions on a utility's power system.
The major raw materials used by this segment, including high
quality steel, are available from a variety of sources in sufficient
quantities.
Process/Environmental Controls
The Process/Environmental Controls segment is comprised of the
Veeder-Root Company ("Veeder-Root"), Danaher Controls, Partlow/
Anderson Instruments, Gulton Industries-Graphic Instruments, West
Instruments, Ltd., QualiTROL Corporation, A.L. Hyde Company,
Hengstler, McCrometer, the controls product line business units of
Joslyn Corporation and the operating businesses of Acme-Cleveland
Corporation (Namco Controls, M&M Precision Systems, TxPort, Inc. and
Communications Technology Corporation) acquired in July, 1996. These
companies produce and sell underground storage tank leak detection
systems and temperature, level and position sensing devices, power
switches and controls, communication line products, power protection
products, liquid flow measuring devices, telecommunications products,
quality assurance products and systems, and electronic and mechanical
counting and controlling devices. These products are distributed by
the Company's sales personnel and independent representatives to
original equipment manufacturers, distributors and other end users.
The Company's strategy in the Process/Environmental Controls
segment is to concentrate on the rapid expansion of its environmental
controls product line, including the Veeder-Root TM storage tank leak
detection systems business. The Company believes that Veeder-Root is
the premier manufacturer of state-of-the-art tank measuring and leak
detection systems for underground fuel storage tanks and, accordingly,
is uniquely positioned to respond to the increased demand for these
products fueled by environmental regulations.
The Company is also expanding its other offerings in the
environmental controls product line to encompass applications related
to markets other than petroleum storage and to address nonregulatory
business requirements. This expansion program includes both
internally developed new product offerings as well as selective
product line acquisitions.
In its instruments product line, the Company's strategy is to
continue enhancing its global controls and instrument position by both
new product development and complementary acquisitions. The companies
within the Instrument Group have significant synergies in both product
offerings and channels of distribution. The Company plan is to
leverage these synergies in product design, engineering and
manufacturing, and product marketing.
Veeder-Root is also the predominant worldwide supplier of
mechanical gasoline pump computing devices and a manufacturer of other
measuring and counting devices.
Namco is a leader in part presence, part position and machine
status sensing solutions for industrial process automation
applications. M&M Precision Systems provides both quality assurance
products and systems which enhance both quality and manufacturing
effectiveness as well as motion products which are generally
components of other devices.
Telecommunications products include automated data transmission
analyzers, single and multi-function test equipment, computerized
cable test and database management systems, digital data access
devices and molded cable closures and terminals used in outside plant
and network applications.
Other business lines within this segment include extruded
thermoplastic mill shapes and custom molded plastic products.
The raw materials utilized by companies in this segment are
stock items, principally metals and plastic, electrical and electronic
components. These materials are readily available from a number of
sources in sufficient quantities.
Patents, Licenses, etc.
The Company has patents of its own and has acquired licenses
under patents of others. The Company does not consider that its
business, as a whole, is dependent on any single patent, group of
patents, trademark or franchise. The Company does, however, offer
many patented products and is periodically engaged in litigation
concerning patents and licenses.
Seasonal Nature of Business
As a whole, the Company's businesses are not subject to
material seasonal fluctuations.
Backlog
The Company's products are manufactured primarily in advance of
order and either shipped or assembled from stock. Backlogs are not
significant as sales are often dependent on orders requiring immediate
shipment from inventory.
Employee Relations
At December 31, 1996, the Company employed approximately 11,600
persons. Of these, approximately 1,600 were hourly-rated unionized
employees. The Company considers its labor relations to be good.
Research and Development
The Company's research and development expenditures were
$46,964,000 for 1996, $36,400,000 for 1995 and $26,800,000 for 1994.
Environmental and Safety Regulations
Certain of the Company's operations are subject to federal,
state and local environmental laws and regulations which impose
limitations on the discharge of pollutants into the air and water and
establish standards for treatment, storage and disposal of solid and
hazardous wastes. The Company believes that it is in substantial
compliance with applicable environmental laws and regulations.
JMC previously operated wood treating facilities that
chemically preserved utility poles, pilings and railroad ties. All
such treating operations were discontinued or sold prior to 1982.
These facilities used wood preservatives that included creosote,
pentachlorophenol and chromium-arsenic-copper. While preservatives
were handled in accordance with all appropriate procedures called for
at the time, subsequent changes in environmental laws may require the
generators of these spent preservatives to be responsible for the cost
of remedial actions at the sites where spent preservatives have been
deposited. The Company is continuing its investigation of these sites
and remediation technologies. The Company has made a provision for
environmental compliance; however, there can be no assurance that
estimates of environmental liabilities will not change.
In addition to environmental compliance costs, the Company may
incur costs related to alleged environmental damage associated with
past or current waste disposal practices or other hazardous materials
handling practices. For example, generators of hazardous substances
found in disposal sites at which environmental problems are alleged to
exist, as well as the owners of those sites and certain other classes
of persons, are subject to claims brought by state and federal
regulatory agencies pursuant to statutory authority. The Company
believes that its liability, if any, for past or current waste
handling practices will not have a material adverse effect on its
financial condition.
The Company must also comply with various federal, state and
local safety regulations in connection with its operations. The
Company's compliance with these regulations has had no material
adverse effect on its financial condition.
Major Customers
The Company has a customer in the tools segment, Sears, Roebuck
and Co. ("Sears"), which accounted for 14% of consolidated sales in
1996. Although the relationship with Sears is long-standing, the
Company believes the loss of this business could have an adverse
effect on its operations.
ITEM 2. PROPERTIES
The Company occupies over 4 million square feet of
manufacturing, distribution, service and office space at various
domestic and foreign locations. The principal properties are listed
below and are constructed of concrete, brick, cement, cinderblock or
some combination of these materials. The Company believes that its
plants have adequate productive capacity and are suitably used for the
manufacture of its products and that its warehouses, distribution
centers and sales offices are suitably located and utilized for the
marketing of its products and services.
Location Principal Use Owned/Leased
......................................................................
Tools and Components
Springdale, AK Manufacturing Owned
Springfield, MA Manufacturing Owned
Gastonia, NC Manufacturing Leased
Fayetteville,AK (2) Manufacturing Owned
Baltimore, MD Distribution Leased
Brampton, Ontario Distribution Leased
Lakewood, NY Manufacturing Owned
Nashville, TN Distribution Owned
Stow, OH Distribution Owned
West Hartford, CT Manufacturing Owned
Terryville, CT Manufacturing Owned
Walworth, WI Manufacturing Owned
Dundee, Scotland Manufacturing Owned
Sheffield, England Manufacturing Owned
Clemson, SC Manufacturing Owned
Jonesboro, AK Manufacturing Owned
Jonesboro, AK Manufacturing Leased
Raleigh, NC Manufacturing Leased
Chicago, IL (3) Manufacturing Owned
Bloomfield, CT Manufacturing Owned
LaVergne, TN Manufacturing Owned
Bowling Green, KY Manufacturing Owned
Process/Environmental Controls
Altoona, PA Manufacturing Owned
Elizabethtown, NC Manufacturing Owned
Market Harborough,
England Manufacturing Leased
Sao Paulo,
Brazil Manufacturing Owned
New Hartford
& Fairport, NY Manufacturing Owned
Gurnee, IL Manufacturing Leased
Grenloch, NJ Manufacturing Owned
Providence, RI Manufacturing Owned
Brighton,
England Manufacturing Leased
Aldingen,
Germany Manufacturing Owned
Aldingen,
Germany (2) Manufacturing Leased
Wehingen,
Germany (2) Manufacturing Leased
Eatontown, NJ Distribution Leased
Broxbourne,
England Distribution Leased
Cleveland, OH (3) Manufacturing Owned
Goleta, CA Manufacturing Owned
Lachine, Quebec Manufacturing Leased
Lancaster, SC Manufacturing Owned
Moorpark, CA Manufacturing Leased
Paso Robles, CA Manufacturing Leased
San Jose, CA Manufacturing Owned
Hemet, CA Manufacturing Owned
Atlanta, GA Manufacturing Owned
Madison, AL Manufacturing Leased
Etobicoke,
Canada Manufacturing Leased
Highland Heights,
OH Manufacturing Owned
Herzhorn, Germany Manufacturing Owned
West Carollton, OH Manufacturing Owned
Loffingen, Germany Manufacturing Owned
Tamworth,
England Manufacturing Leased
In addition to the facilities listed, the Company owns or
leases various facilities including offices or properties in
Washington, District of Columbia; Simsbury, Connecticut; as well as
facilities in Uppermill, Livingston, Gloucester and Richmond, Great
Britain; Melbourne and Sydney, Australia; Nagoya, Osaka and Tokyo,
Japan; Toronto, Canada; Paris, Bron, Toulouse, Bordeaux, Tours and
Selestat, France; and Stuttgart, Germany.
ITEM 3. LEGAL PROCEEDINGS
A former subsidiary of the Company is engaged in litigation
in several states with respect to product liability. The Company sold
the subsidiary in 1987. Under the terms of the sale agreement, the
Company agreed to indemnify the buyer of the subsidiary for product
liability related to tools manufactured by the subsidiary prior to
June 4, 1987. The cases involve approximately 3,000 plaintiffs, in
state and federal courts. All other major U.S. air tool manufacturers
are also defendants. The gravamen of these complaints is that the
defendants' air tools, when used in different types of manufacturing
environments over extended periods of time, were defective in design
and caused various physical injuries. The plaintiffs seek
compensatory and punitive damages. The cases are in preliminary
stages of discovery and pleading and the Company intends to defend its
position vigorously. The Company's maximum indemnification obligation
under the contract is approximately $85,000,000. The Company believes
it has insurance coverage for all or a substantial part of the
damages, if any. The outcome of this litigation is not currently
predictable.
JMC is a defendant in a class action tort suit. The suit
alleges exposure to chemicals and property devaluation resulting from
wood treating operations previously conducted at a Louisiana site.
Both the size of the class and the damages are uncertain. The Company
has tendered the defense of the suit to its insurance carrier. JMC
believes that it may have adequate insurance coverage for the
litigation; however, because of the above uncertainties, JMC is unable
to determine at this time the potential liability, if any.
In addition to the litigation noted above, the Company and
its subsidiaries are from time to time subject to ordinary routine
litigation incidental to their business. The Company believes that
the results of the above noted litigation and other pending legal
proceedings would not have a materially adverse effect on the
Company's financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER
No matters were submitted to a vote of security holders
during the fourth quarter of 1996.
PART II
ITEMS 5 THROUGH 8.
The information required under Items 5 through 8 is included
in the Registrant's Annual Report to its Shareholders for the year
ended December 31, 1996, and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
NONE
PART III
ITEMS 10 THROUGH 13.
The information required under Items 10 through 13 is
included in the Registrant's Proxy Statement for its 1997 annual
meeting, and is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K
a) Document List
1. Financial Statements
Response to this portion of Item 14 is submitted
per the Index to Financial Statement Schedules on
page 13 of this report.
2. Supplementary Data and Financial Statement Schedules
Response to this portion of Item 14 is submitted
per the Index to Financial Statement Schedules on
page 13 of this report.
3. An Index of Exhibits is on page 14 of this report.
b) Reports on Form 8-K filed in the fourth quarter of
1996.
NONE
<PAGE>
DANAHER CORPORATION
INDEX TO FINANCIAL STATEMENTS, SUPPLEMENTARY DATA AND
FINANCIAL STATEMENT SCHEDULES
Page Number in:
Annual Report Form 10K
To Shareholders
Annual Report:
Report of Independent Public
Accountants on Schedule: 16
Financial Statements:
Consolidated Statements of
Earnings, year ended December 31,
1996, 1995, and 1994. 16
Consolidated Balance Sheets,
December 31, 1996 and 1995 17
Consolidated Statements of
Cash Flows, years ended
December 31, 1996, 1995, and 1994 18
Consolidated Statements of
Stockholders' Equity, years
ended December 31, 1996,
1995, and 1994 19
Notes to Consolidated
Financial Statements 20
Supplemental Data:
Selected Financial Data 12
Market Prices of Common Stock 29
Schedules:
II - Valuation and Qualifying Accounts 17
Schedules other than those listed above have been omitted
from this Annual Report because they are not required, are not
applicable or the required information is included in the financial
statements or the notes thereto.
<PAGE>
Exhibits:
(3) Articles of Incorporation and By-Laws.
(a) The Articles of Incorporation of Danaher Incorporated by
(filed as Annex B to Danaher's Proxy Reference
Statement dated October 7, 1986).
(b) The By-Laws of Danaher. Incorporated By
Reference
(10) Material Contracts:
(a) Employment Agreement between Danaher Incorporated by
Corporation and George M. Sherman dated Reference
as of January 2, 1990
(b) Credit Agreement Dated As of September 7, Incorporated by
1990. Among Danaher Corporation, the Reference
Financial Institutions Listed Therein
and Bankers Trust Company as Agent.
(c) Agreement as of November 1, 1990 between Incorporated by
Danaher Corporation, Easco Hand Tools, Inc. Reference
and Sears, Roebuck and Co.
(d) Note Agreement as of November 1, 1992 Incorporated by
Between Danaher Corporation and Lenders Reference
Referenced Therein.
(e) Note Agreement as of April 1, 1993 Incorporated by
Between Danaher Corporation and Lenders Reference
Referenced Therein.
(13) Annual Report to Securityholders
(22) Subsidiaries of Registrant.
(24) Consent of Independent Public Accountants.
(27) Financial Data Schedules
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
By: /s/ GEORGE M. SHERMAN
George M. Sherman
President and Chief
Executive Officer
Date: April 25, 1997
/s/ GEORGE M. SHERMAN President and Chief Executive Officer
George M. Sherman
/s/ STEVEN M. RALES Chairman of the Board
Steven M. Rales
/s/ MITCHELL P. RALES Chairman of the Executive Committee
Mitchell P. Rales
/s/ WALTER G. LOHR, JR. Director
Walter G. Lohr, Jr.
/s/ DONALD J. EHRLICH Director
Donald J. Ehrlich
/s/ MORTIMER M. CAPLIN Director
Mortimer M. Caplin
/s/ A. EMMET STEPHENSON, JR. Director
A. Emmet Stephenson, Jr.
/s/ PATRICK W. ALLENDER Senior Vice President-Chief Financial
Patrick W. Allender Officer and Secretary
/s/ C. SCOTT BRANNAN Vice President and Controller
C. Scott Brannan
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON THE FINANCIAL STATEMENT SCHEDULES
To Danaher Corporation:
We have audited in accordance with generally accepted auditing
standards, the financial statements included in pages 16 to 26 of the
Danaher Corporation and Subsidiaries' Annual Report to Shareholders
incorporated by reference in this Form 10-K, and have issued our
report thereon dated January 29, 1997. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole.
The schedules listed in the index are the responsibility of the
Company's management and are presented for the purpose of complying
with the Securities and Exchange Commission's rules and are not a part
of the basic financial statements. These schedules have been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in
relation to the financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Washington, D.C.
January 29, 1997
<PAGE>
DANAHER CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(000's omitted)
Additions
Write
Balance Charged Offs,
Classification at to Charged Write Balance
Beginning Costs to Downs at End
of & other & of
Period Expenses Accounts Deductions Period
Year Ended December 31, 1996
Allowances deducted
from asset accounts:
Allowance for
doubtful accounts: $13,431 $ 5,763 $ 507(a) $ 4,833 $14,868
Year Ended December 31, 1995
Allowances deducted
from asset accounts:
Allowance for 4,148
doubtful accounts: $11,638 $ 4,847 $ 2,961(a) $ 1,867(b) $13,431
Year Ended December 31, 1994
Allowances deducted
from asset accounts:
Allowance for
doubtful accounts $ 8,043 $ 6,630 $ 487(a) $ 3,522 $11,638
Notes:(a) - Amounts related to businesses acquired.
(b) - Amounts related to businesses disposed of.
<PAGE>
EXHIBIT 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our reports included (or incorporated by reference)
in this Form 10-K, into the Company's previously filed Registration
Statement File No. 33-32402.
ARTHUR ANDERSEN LLP
Washington, D.C.
April 25, 1997
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[TYPE]EX-21 [C]
DANAHER CORPORATION & SUBSIDIARIES
Exhibit to 1996 Annual Report on Form 10K
(22) Subsidiaries of Registrant
State/
Jurisdiction
of Incorp. DBA
No. Corporation
138 143420 Ontario, Inc. Ontario -
125 AC Intermediate Co. Ohio -
124 Acme-Cleveland Corp. Ohio -
127 Acme-Cleveland Laser Systems, Inc. Ohio -
128 Acme Communications Tech.Sys.Corp. Ohio -
126 ACMS Incorporated Ohio -
112 Air Dry Company of America, LLC Delaware -
58 A.L. Hyde Company Delaware -
62 The Allen Manufacturing Company Delaware Danaher Tool Group
147 American Sigma, Inc. New York -
20 Ammco Tools, Inc. Illinois Hennessy/Ammco
129 Amtronx Inc. Ohio -
54 Anderson Instrument Co., Inc. New York -
5 Armstrong Tools, Inc. Delaware Partlow/Anderson
130 Ball Screws and Actuators Co., Inc. California -
12 Beamco, Inc. Wisconsin -
92 CEI Acquisition Company Delaware Veeder-Root Co.
80 CGF Automation Limited England -
30 Chicago Pneumatic Tool Co. Delaware -
44 Cleveland Precision Systems GmbH Germany -
96 Commercial Avenue Company Delaware -
132 Communications Technology (CN)Ltd. Brit.Colum. -
31 Communications Technology Corp. California -
133 Communications Technology Corp., S.A. Mexico -
81 Contents Measuring Systems Limited England -
117 Cyberex, B.V. Netherlands -
115 Cyberex, LLC Delaware -
116 Cyberex Limited England -
145 Danaher Alberta, Inc. Alberta -
146 Danaher Canada, Inc. Alberta -
1 Danaher Corporation Delaware -
50 Danaher Finance Company Delaware -
90 Data Recorders Incorporated Delaware -
98 DCI Consolidated Industries, Inc. Delaware -
99 Delta Consolidated Industries, Inc. Arkansas -
8 DH Holdings Corp. Delaware -
2 DHR Services, Inc. Delaware -
23 Diesel Engine Retarders, Inc. Delaware -
6 Diversified Mortgage Investors, Inc. Delaware -
3 DMG Plastics, Inc. Delaware -
136 Dolan-Jenner Europe, B.V. Netherlands -
135 Dolan-Jenner Industries, Inc. Mass. -
14 Dynapar Corporation Illinois Danaher Controls
9 Easco Hand Tools, Inc. Delaware Danaher Tool Group
15 Encoders Incorporated Delaware -
101 Exidyne Instrumentation Technologies Pennsylvania -
59 Extrusion Plastics, Inc. Delaware -
134 Fire Networks, Inc. Delaware -
4 FJ 900, Inc. Delaware -
55 Flow Measurement Corporation Delaware -
89 GID Acquisition Company Delaware GID Instruments
76 Gwendolene Holdings Limited England -
10 Hand Tool Design Corporation Delaware -
120 Hecon Industries, Inc. New Jersey -
121 Hecon Properties, Inc. New Jersey -
48 Hengstler Belgium SPRL Belgium -
49 Hengstler Canada, Inc. Ontario -
39 Hengstler Controle Numerique SARL France -
47 Hengstler Espa a, S.A. Spain -
84 Hengstler Flexitime Limited England -
37 Hengstler GmbH Germany -
83 Hengstler Great Britain Limited England -
82 Hengstler Industries Limited England -
46 Hengstler Italia SRL Italy -
45 Hengstler Japan Corp. Japan -
85 Hengstler Leasing Limited England -
51 Hengstler Nederland, B.V. Netherlands -
41 Hengstler Tid och Passage, A.B. Sweden -
18 Hennessy Industries Canada, Inc. Ontario -
16 Hennessy Industries, Inc. Delaware Hennsessy/Ammco
65 Holo-Krome Australia Pty, Ltd. Australia -
61 Holo-Krome Company Delaware -
87 Holo-Krome Limited England -
64 Holo-Krome Uniform Fasteners, Inc. California -
95 Houma Realty Company Delaware -
63 Industrial Fasteners, Inc. Delaware -
24 Jacobs Chuck Manufacturing Company Delaware -
25 Jacobs Chuck Mfg.(Suzhou) Co.Ltd. China -
26 Jacobs Chuck Trading (Shanghai) Co.LtdChina -
27 Jacobs Japan, Inc. Delaware -
86 Jacobs Manufacturing Co. Ltd. England -
22 Jacobs Vehicle Systems, Inc. Delaware -
114 Jennings Land Company Delaware -
113 Jennings Technology Company, LLC Delaware Joslyn Jennings
119 Joslyn Canada, Inc. Ontario -
109 Joslyn Clark Controls, LLC Delaware -
103 Joslyn Company, LLC Delaware -
105 Joslyn Electronic Systems Company, LLCDelaware -
118 Joslyn Foreign Sales Corp. Virgin Is. -
106 Joslyn Hi-Voltage Company, LLC Delaware -
102 Joslyn Holding Company Delaware -
104 Joslyn Manufacturing Co. Delaware -
108 Joslyn Research & Development Corp. Delaware -
111 Joslyn Sunbank Company, LLC Maryland -
107 JPP Corporation Delaware -
97 JS Technology, Inc. Delaware -
38 KACO GmbH Germany -
19 K-D Tools of Canada Ltd. Ontario -
11 K-D Tools of Puerto Rico, Inc. Delaware -
123 Kistler-Morse Corporation Delaware -
72 Launchchange Limited England -
137 LSMT Corp. Michigan -
29 Matco Tools Corporation New Jersey -
122 McCrometer, Inc. Delaware -
31 Mechanics Custom Tools Corporation Delaware -
91 Middle Road Company Delaware -
139 M & M de France, Inc. Ohi -
140 M & M Precision Systems Corp. Ohio -
141 Namco Controls Corporation Ohio -
43 Namco Controls GmbH Germany -
32 NMTC, Inc. Delaware Matco Tools
94 Normandy Court Company Delaware -
13 Old Tide Corp. California -
52 The Partlow Corporation New York Partlow/Anderson
68 Petroleum Industry Controls, Inc. Delaware -
142 Phoenix Microsystems, Inc. Alabama -
77 Piccadilly Precision Engineering Ltd.U.K. -
148 Plastifab, Inc. Canada -
28 Power Tool Holders Incorporated Delaware -
34 Power Transformer Controls Company Delaware -
35 QualiTROL Canada, Inc. Ontario -
33 QualiTROL Corporation New York -
36 QualiTROL GmbH Germany -
79 QualiTROL Instruments Limited England -
66 Quality Wire Processing, Inc. Delaware Danaher Tool Group
88 Relay Park Realisations Ltd. England -
40 SCI Hengstler France -
17 Service Station Products Company Delaware -
78 Spline Gauges Ltd. U.K. -
149 Sullivan Property Holding Company Delaware -
110 Sunbank Family of Companies, LLC Maryland -
57 Swiss Precision Parts Corp. Delaware -
53 Time & Temperature Controls Corp. Delaware -
100 Truck Storage Incorporated Delaware -
144 TxPort Data Inc. Canada -
143 TxPort Inc. Delaware -
7 Utica Holding Company Delaware -
67 Veeder-Root Company Delaware -
70 Veeder-Root do Brasil Brazil -
75 Veeder-Root Environmental Systems Ltd.England -
42 Veeder-Root GmbH Germany -
74 Veeder-Root Limited England -
69 Veeder-Root of N.C., Inc. Delaware Danaher Tool Group
71 Veeder-Root SARL France -
93 Warrick Controls, Inc. Delaware -
73 West Instruments Limited England -
56 Western Pacific Equipment Corp. Delaware -
21 Wheel Service Equipment Corporation Delaware -
60 World Plastic Extruders, Inc. New York -
DANAHER CORPORATION
1996 ANNUAL REPORT<PAGE>
SELECTED FINANCIAL DATA
(000's omitted except per share data)
1996 1995 1994 1993 1992
Net revenues $1,811,878 $1,486,769 $1,113,973 $937,633 $845,684
Operating profit 226,136 180,257 124,427 87,058 58,899
Earnings from
continuing
operations 127,959 105,766 72,319 48,030 30,443
Per share 2.13 1.77 1.24 .83 .53
Discontinued
operations 79,811 2,550 9,331 5,719 1,158
Per share 1.33 .04 .16 .10 .02
Earnings before
cumulative effect
of accounting
change 207,770 108,316 81,650 53,749 31,601
Per share 3.47 1.81 1.40 .93 .55
Cumulative effect of
accounting change* -- -- -- (36,000) --
Per share* -- -- -- (.62) --
Net earnings 207,770 108,316 81,650 17,749 31,601
Earnings per
common share 3.47 1.81 1.40 .31 .55
Dividends declared 5,360 4,672 3,710 3,412 --
Dividends per share .09 .08 .065 .06 --
Total assets 1,765,074 1,485,991 1,105,645 872,472 769,815
Total debt 236,327 283,587 185,286 133,585 168,768
* Adoption of accrual method specified by SFAS No. 106 for post
retirement benefits.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Danaher Corporation (the "Company") operates a variety of
businesses through its wholly-owned subsidiaries. These businesses
are conducted in two business segments: Tools and Components and
Process/Environmental Controls. In Tools and Components, the
Company is the principal manufacturer of Sears, Roebuck and Co.'s
Craftsman line, National Automotive Parts Association line, K-D
automotive line, and the Matco, Armstrong and Allen lines of
mechanics' hand tools. The Company also manufactures Allen
wrenches, Jacobs drill chucks and diesel engine retarders, and Coats
and Ammco wheel service equipment. In its Process/Environmental
Controls segment, the Company is a leading producer of leak
detection sensors for underground fuel storage tanks and motion,
temperature, pressure, level, flow and power reliability and quality
control devices.
Presented below is a summary of revenues broken down by
business segment (000's omitted).
1996 1995 1994
$ % $ % $ %
Tools and
Components $1,103,443 60.9% $1,005,005 67.6% $ 809,989 72.7%
Process/
Environmental
Controls 708,435 39.1 481,764 32.4 303,984 27.3
$1,811,878 100.0% $1,486,769 100.0% $1,113,973 100.0%
Tools and Components
The Tools and Components segment is comprised of the Danaher
Hand Tool Group (including Special Markets and Professional Tools
divisions), Matco Tools, Jacobs Chuck Manufacturing Company, Iseli
Company, Delta Consolidated Industries, Jacobs Vehicle Systems,
Hennessy Industries and the hardware and electrical apparatus lines
of Joslyn Manufacturing Company ("JMC"). This segment is one of the
largest domestic producers and distributors of general purpose and
specialty mechanics' hand tools. Other products manufactured by
these companies include tool boxes and storage devices, diesel
engine retarders, wheel service equipment, drill chucks, custom
designed headed tools and components, hardware and components for
the power generation and transmission industries, high quality
precision socket screws, fasteners, and high quality miniature
precision parts.
1996 COMPARED TO 1995
Revenues in this segment increased 10% from 1995. Of this
increase, acquisitions accounted for approximately 5%, higher unit
volumes accounted for approximately 5% and increased average pricing
accounted for less than 1%. Sales levels were benefitted by
particularly strong demand in the mobile tool distribution and
storage device areas, offset somewhat by decreased demand for diesel
engine retarders as North American and Asian heavy truck production
decreased in 1996. Operating margins increased from 11.2% to 11.6%.
This margin increase reflects the benefits of the higher sales
volumes and continued manufacturing process improvements, offset by
the full year effect of the lesser margins associated with the
hardware and electrical apparatus lines of JMC.
1995 COMPARED TO 1994
Revenues in 1995 were 24% higher than 1994. Acquisitions
accounted for 17%, while price increases provided 1% and higher
shipment volumes provided 6%. Demand for drill chucks and diesel
engine retarders was particularly strong in 1995. Operating profit
growth exceeded the sales improvement at 39%, reflecting continued
process improvements in the manufacturing operations. The acquired
operations of Delta, which were only reflected for one month in 1994
operations, and the hardware and electrical apparatus lines of JMC
provided lesser profit margins than the existing business units,
partially offsetting the performance improvements.
Process/Environmental Controls
The Process/Environmental Controls segment is comprised of the
Veeder-Root Company, Danaher Controls, Partlow/Anderson Instrument,
Gulton Industries-Graphic Instruments, West Instruments, Ltd.,
Qualitrol Corporation, A.L. Hyde Company, Hengstler, McCrometer, the
controls product line business units of Joslyn Corporation and the
operating businesses of Acme-Cleveland Corporation (Namco Controls,
M&M Precision Systems, TxPort, Inc. and Communications Technology
Corporation) acquired in July, 1996. These companies produce and
sell underground storage tank leak detection systems and
temperature, level and position sensing devices, power switches and
controls, communication line products, power protection products,
liquid flow measuring devices, telecommunication products, quality
assurance products and systems, and electronic and mechanical
counting and controlling devices. These products are distributed by
the Company's sales personnel and independent representatives to
original equipment manufacturers, distributors and other end users.
1996 COMPARED TO 1995
Revenue growth of 47% in 1996 was largely the result of the
full year effect of the September, 1995 Joslyn acquisition and the
1996 Acme-Cleveland acquisition. Acquisitions contributed 44% of
the growth, with the balance coming from higher unit volumes of 3%
and price increases averaging less than 1%. Demand was very strong
in the North American market, which was largely offset by sluggish
economic conditions in international markets, particularly in
Germany. Operating profit increased 39% from 1995, reflecting the
acquired businesses' contributions and a steady overall contribution
from the base businesses.
1995 COMPARED TO 1994
Revenues in 1995 were 58% higher than in 1994 in this segment.
Business acquisitions in the segment contributed 52% of the
increase. Of the remaining increase, higher unit volumes
contributed 5% and increased average pricing provided 1%. Demand
for underground storage tank monitoring equipment remained strong.
Operating margins decreased from 18.6% to 16.8%, entirely due to the
impact of the Hengstler and Joslyn acquisitions. Base business
showed a modest increase in operating margin. The Hengstler
acquisition has significantly increased market position in Europe
for the counter and encoder product lines.
Discontinued Operations
In January, 1996, the Company divested its Fayette Tubular
Products subsidiary. As the Company no longer operates in the
Transportation business segment, Fayette's operation is shown as a
discontinued operation. A gain of approximately $80 million was
recognized in the first quarter of 1996.
Gross Profit
Gross profit margin in 1996 was 31.6%, a 1.5 percentage point
improvement compared to 1995. Productivity improvements were
achieved in all business segments and a shift in mix to the higher
margin products of the acquired companies in the
Process/Environmental Controls business segment contributed to the
improvement.
Gross profit, as a percentage of sales, in 1995 was 30.1%, a
1.2 percentage point increase compared to the 28.9% achieved in
1994. Productivity improvements, combined with increased fixed cost
leverage, resulted in margin improvement. A shift in product mix
associated with the acquisitions also increased the gross profit
margin.
Operating Expenses
In 1996, selling, general and administrative expenses were
19.1% of sales, an increase of 1.1 percentage points from 1995
levels. This principally reflects the higher operating expense
levels of the businesses acquired in 1996 and September, 1995.
Selling, general and administrative expenses for 1995 as a
percentage of sales were approximately 0.2 percentage points higher
than the 1994 level. This reflects higher cost ratios in the
businesses acquired.
Interest Costs and Financing Transactions
The Company debt financing is provided by $100 million in
privately placed debt, maturing in April, 2003 at an average
interest cost of 7.2%, and a revolving credit facility which
provides for senior financing of $250 million for general corporate
purposes. The interest rates for borrowing under the facility float
with base rates.
The Company's financing requirements in these years were
satisfied by the financing discussed above and through borrowings
under uncommitted lines. Interest expense in 1996 was $9.2 million
higher than in 1995 as average borrowing levels increased due to
acquisitions. Interest expense in 1995 was 125% higher than in
1994, due to higher average borrowing levels caused primarily by the
acquisitions made in the fourth quarter of 1994 and the third
quarter of 1995.
Income Taxes
The 1996 effective tax rate of 39.0% reflects a greater impact
of nondeductible amortization resulting from the acquisitions and
higher taxes on foreign earnings as loss carryforwards were not
available to reduce tax expense in 1996. The effective tax rate
decreased 1.4 percentage points in 1995 to 38.9% of pre-tax income.
The decrease in 1995 is principally due to a lower effective rate on
certain foreign earnings and the utilization of tax carryforwards in
foreign jurisdictions which were not previously recognized in
earlier years.
Inflation
The effect of inflation on the Company's operations has been
minimal in 1996, 1995, and 1994.
Liquidity and Capital Resources
The Company acquired Acme-Cleveland Corporation for
approximately $200 million in July, 1996 and, in September, 1995,
acquired Joslyn Corporation for approximately $245 million in cash
consideration. See Note 2 to Consolidated Financial Statements for
a further discussion of the impact of these acquisitions. In
December, 1995, the Company entered into an agreement to sell its
Fayette Tubular Products subsidiary for $155 million in cash
consideration. The transaction closed in January, 1996, and the
proceeds were used to reduce short-term borrowings.
In 1994, the Company acquired Delta Consolidated Industries,
Hengstler GmbH, Armstrong Brothers Tool Company and several smaller
entities. Aggregate consideration for these transactions was
approximately $167 million including approximately $31 million in
common stock. These acquisitions had no significant impact on the
1994 results of operations as the larger acquisitions were not
completed until the fourth quarter. These entities have combined
annual sales levels of $220 million.
As discussed previously, $100 million of the Company's debt is
fixed at an average interest cost of 7.2%. Substantially all
remaining borrowings are short-term in nature and float with
referenced base rates. As of December 31, 1996, the Company has
unutilized commitments under its revolving credit facility of $250
million.
Cash flow has been strong in all periods from 1994 through
1996. Operations generated $217 million, $174 million and $140
million in cash in 1996, 1995, and 1994, respectively. The
principal use of funds has been capital expenditures of $51 million,
$59 million and $35 million in 1996, 1995 and 1994, respectively and
cash paid for acquisitions of $246 million, $208 million and $136
million in 1996, 1995, and 1994, respectively. Cash flow for 1996
included the $155 million proceeds from the Fayette sale. The net
result of the above, combined with working capital changes, was a
decrease in debt of $48 million in 1996, and increases of $98
million and $52 million in 1995 and 1994.
The Company's funds provided from operations, as well as the
existing bank facility and available credit lines, should provide
sufficient available funds to meet the Company's working capital,
capital expenditure, dividend and debt service requirements for the
foreseeable future. <PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of
Directors of Danaher Corporation:
We have audited the accompanying consolidated balance sheets
of Danaher Corporation (a Delaware corporation) and subsidiaries as
of December 31, 1996 and 1995, and the related consolidated
statements of earnings, stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Danaher Corporation and subsidiaries as of December 31, 1996 and
1995, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
Arthur Andersen LLP
Washington, D.C.
January 29, 1997
<PAGE>
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of dollars, except per share data)
Year Ended December 31,
1996 1995 1994
Net revenues.. . . . . . $1,811,878 $1,486,769 $1,113,973
Cost of sales. .. . . . . 1,239,846 1,039,622 791,874
Selling, general
and administrative
expenses.. . . . . . . . 345,896 266,890 197,672
Total operating
expenses.. . . . . . . . 1,585,742 1,306,512 989,546
Operating profit. . . . . 226,136 180,257 124,427
Interest expense. . . .. 16,376 7,198 3,201
Earnings from continuing
operations before
income taxes . . . . . 209,760 173,059 121,226
Income taxes. . . . . 81,801 67,293 48,907
Earnings from continuing
operations . .. . . . 127,959 105,766 72,319
Discontinued operations,
net of income taxes of
$0, $1,630 and $5,966
(1996 - gain on sale; 1995
and 1994 - earnings from
operations). . . . . . . 79,811 2,550 9,331
Net earnings. . . . . . . $ 207,770 $ 108,316 $ 81,650
Per share:
Continuing operations $2.13 $1.77 $1.24
Discontinued operations 1.33 .04 .16
Net earnings $3.47 $1.81 1.40
Average common stock
and common equivalent
shares outstanding. . 59,954,636 59,862,673 58,326,572
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
<PAGE>
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
As of December 31,
ASSETS 1996 1995
Current assets:
Cash and equivalents. . . . . . . . . . $ 26,444 $ 7,938
Trade accounts receivable, less allowance
for doubtful accounts of $14,868 and
$13,431 . .. . . . . . . . . . . . . . 266,668 224,652
Inventories. . .. . . . . . . . . . . . . 204,236 201,890
Prepaid expenses and other. . . . . . . . 49,393 31,990
Total current assets . . . . . . . . 546,741 466,470
Property, plant and equipment, net. . . . 319,606 291,937
Other assets . . . . . . . . . . . . . . . 105,903 119,444
Excess of cost over net assets of acquired
companies, less accumulated amortization
of $92,583 and $72,125 . . . . . . . . . 792,824 608,140
$1,765,074 $1,485,991
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of debt .$ 16,757 $ 14,970
Trade accounts payable. . . . .. . . . . 110,194 92,290
Accrued expenses. . . . . . . .. . . .. . 347,622 296,878
Total current liabilities. . . . . . 474,573 404,138
Other liabilities. . . . . . . .. . . . . 270,670 226,925
Long-term debt . . . . . . . . . . . . . 219,570 268,617
Stockholders' equity:
Common stock, one cent par value;
125,000,000 shares authorized;
64,186,673 and 63,406,214 issued;
58,889,067 and 58,503,008 outstanding. 642 634
Additional paid-in capital. . . . . . . 333,587 315,205
Cumulative foreign translation adjustment
and other . . . . . . .. . . . . . . 8,858 3,598
Retained earnings. . . . . . .. . . . . . . 506,773 304,363
Treasury stock, at cost; 5,297,606 and
4,903,206 shares.. . . . . . . . . . (49,599) (37,489)
Total stockholders' equity. . . . . 800,261 586,311
$1,765,074 $1,485,991
The accompanying Notes to Consolidated Financial Statements
are an integral part of these balance sheets.
<PAGE>
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
Year Ended December 31,
1996 1995 1994
Cash flows from operating activities:
Earnings from continuing operations $127,959 $105,766 $ 72,319
Earnings from discontinued operations . - 2,550 9,331
Depreciation and amortization. . . 68,626 58,527 42,554
Increase in accounts receivable. . . (11,818) (20,098) (15,786)
(Increase) decrease in inventories. . 38,866 (15,589) (938)
Increase in accounts payable. . . . . 10,385 626 8,712
Change in other assets and
liabilities. . . . . . . . . . . . (16,904) 42,374 24,162
Total operating cash flows. .. 217,114 174,156 140,354
Cash flows from investing activities:
Payments for additions to property,
plant and equipment, net (51,255) (59,172) (34,811)
Sale of Fayette Tubular Products. . . 155,000 - -
Investments in equity securities. . . - - (22,032)
Net cash paid for acquisitions. . . .(246,427) (207,941) (136,055)
Net cash used in investing
activities . . . . . . (142,682) (267,113) (192,898)
Cash flows from financing activities:
Proceeds from issuance of
common stock. . . . . . . . . . . 9,507 3,559 992
Dividends paid . . . . . . . . . . (5,065) (4,672) (3,420)
Borrowings (repayments) of debt. . . (48,407) 98,301 51,701
Purchase of common stock . . . . . (12,110) - -
Net cash provided by (used in)
financing activities. . . . . (56,075) 97,188 49,273
Effect of exchange rate changes
on cash. .. . . . . . . . . . 149 108 269
Net change in cash and
equivalents. . . . . . . . . . . 18,506 4,339 (3,002)
Beginning balance of cash and
equivalents. . . . . . . . . . 7,938 3,599 6,601
Ending balance of cash and
equivalents . . . . . . . . . . $ 26,444 $ 7,938 $ 3,599
Supplemental disclosures:
Cash interest payments. . . . $ 16,981 $ 13,699 $ 9,505
Cash income tax payments .. $ 80,152 $ 69,853 $ 65,837
Common stock issued for
acquisitions . .. . . . . . $ 8,883 $ - $ 31,131
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
<PAGE>
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands of dollars) Cumulative
Foreign
Additional Translation
Common Stock Paid-in Retained Treasury Adjustment
Shares Amount Capital Earnings Stock and Other
Balance, January 1, 1994. 61,800,328 $309 $279,532 $123,095 $(37,489) $(1,781)
Net earnings for the year.. - - - 81,650 - -
Dividends declared. . . . - - - (3,710) - -
Common stock issued for
options exercised. . . . 58,774 - 992 - - -
Common stock issued for
acquisitions . . . . . .1,339,106 7 31,124 - - -
Two-for-one common stock
split . . . . . . . . . .- 316 - (316) - -
Increase from translation of
foreign financial statements. - - - - - 2,371
Balance, December 31, 1994 63,198,208 632 311,648 200,719 (37,489) 590
Net earnings for the year. - - - 108,316 - -
Dividends declared. . . . . - - - (4,672) - -
Common stock issued for
options exercised. . . . 208,006 2 3,557 - -
Increase from translation of
foreign financial statements. - - - - - 3,008
Balance, December 31, 1995 63,406,214 634 315,205 304,363 (37,489) 3,598
Net earnings for the year.. - - - 207,770 - -
Dividends declared. .. .. - - - - - -
Common stock issued for
options exercised. . . . 483,233 5 9,502 (5,360) - -
Purchase of common stock .. - - - - (12,110) -
Unrealized gain on securities
held. . . . . . .. . . . . - - - - - 4,000
Common stock issued for
acquisitions. . . . . . . . 297,226 3 8,880 - - -
Increase from translation of
foreign financial statements - - - - - 1,260
Balance, December 31,1996 64,186,673 $642 $333,587 $506,773 $(49,599) $8,858
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
<PAGE>
(1) Summary of Significant Accounting Policies:
Accounting Principles - The consolidated financial statements include
the accounts of the Company and its subsidiaries. The accounts of certain
of the Company's foreign subsidiaries are included on the basis of a fiscal
year ending November 30. This procedure was adopted to allow sufficient
time to include these companies in the consolidated financial statements.
All significant intercompany balances and transactions have been eliminated
upon consolidation. Preparation of these consolidated financial statements
necessarily includes the use of management's estimates.
Inventory Valuation - Inventories include material, labor and overhead
and are stated principally at the lower of cost or market using the last-in,
first-out method (LIFO).
Property, Plant and Equipment - Property, plant and equipment are
carried at cost. The provision for depreciation has been computed
principally by the straight-line method based on the estimated useful lives
(3 to 35 years) of the depreciable assets.
Other Assets - Other assets include principally deferred income taxes,
equity securities, noncurrent trade receivables and capitalized costs
associated with obtaining financings which are being amortized over the term
of the related debt. Available for sale equity securities with a cost of
approximately $6.6 million have been shown at their fair market value as of
December 31, 1996. This $4 million unrealized gain has been reflected as a
component of stockholders' equity. No realized gains or losses are
reflected in any of the years presented.
Fair Value of Financial Instruments - For cash and equivalents, the
carrying amount is a reasonable estimate of fair value. For long-term debt,
rates available for debt with similar terms and remaining maturities are
used to estimate the fair value of existing debt.
Excess of Cost Over Net Assets of Acquired Companies - This asset is
being amortized on a straight-line basis over forty years. $20,458,000,
$14,482,000 and $9,765,000 of amortization was charged to expense for the
years ended December 31, 1996, 1995, and 1994, respectively. When events
and circumstances so indicate, all long-term assets, including the Excess of
Cost Over Net Assets of Acquired Companies, are assessed for recoverability
based upon cash flow forecasts. Should an impairment exist, fair value
estimates would be determined based on the cash flow forecasts, discounted
at a market rate of interest. No impairment losses have been recognized in
any of the periods presented.
Foreign Currency Translation - Exchange adjustments resulting from
foreign currency transactions are generally recognized in net earnings,
whereas adjustments resulting from the translation of financial statements
are reflected as a separate component of stockholders' equity. Net foreign
currency transaction gains or losses are not material in any of the years
presented.
Statements of Cash Flows - The Company considers all highly liquid
investments with a maturity of three months or less at date of purchase to
be cash equivalents.
Income Taxes - The Company provides income taxes for unremitted
earnings of foreign subsidiaries which are not considered permanently
reinvested in that operation.
Earnings Per Share - The computation of earnings per share is based on
the weighted average number of common shares and common stock equivalents
outstanding during the year.
Discontinued Operations - In January, 1996, the Fayette Tubular
Products subsidiary was sold for approximately $155 million. The Company no
longer operates in the Transportation business segment, and hence prior
periods have been restated to reflect Fayette as a discontinued operation.
A gain of approximately $80 million was recognized in 1996. Net revenues
for Fayette were $155 million in 1995 and $175 million in 1994. Net assets
reflected in prepaid expenses and other and in other assets were $48 million
as of December 31, 1995.
(2) Acquisitions:
The Company obtained control of Acme-Cleveland Corporation (Acme) as
of July 2, 1996. Total consideration for Acme was approximately $200
million. The fair value of assets acquired is approximately $240 million,
including $140 million of excess cost over net assets acquired, and
approximately $40 million of liabilities were 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 Company obtained control of Joslyn Corporation (Joslyn) as of
September 1, 1995 when Joslyn's shareholders tendered approximately 75% of
the outstanding shares to the Company for $34 per share in cash. The
remaining 25% was acquired in October, 1995. Total consideration for Joslyn
was approximately $245 million. The fair value of assets acquired was
approximately $345 million, including $180 million of excess of cost over
net assets acquired, and approximately $100 million of liabilities were
assumed. The transaction was accounted for as a step acquisition purchase.
Results of operations reflect a minority interest elimination for the two-
month period between the change in control and the merger of Joslyn.
The unaudited pro forma information for the periods set forth below
give effect to these transactions as if they 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 acquisitions been consummated
as of that time (unaudited, 000's omitted):
Year Ended
December 31, December 31,
1996 1995
Net Sales .. . . . . . . . . . $ 1,885,700 $ 1,767,154
Net Earnings from continuing
operations . . . . . . .. . . 129,197 111,838
Earnings per share from continuing
operations . . . . . . . . . . . $ 2.15 $ 1.87
In 1994, the Company acquired Delta Consolidated Industries, Hengstler
GmbH, Armstrong Brothers Tool Company and several smaller entities.
Aggregate consideration for these transactions was approximately $167
million, consisting of $136 million in cash and $31 million in common stock.
The fair value of the assets acquired was approximately $240 million and
approximately $73 million of liabilities were assumed in these acquisitions.
The transactions have been accounted for as purchases. These acquisitions
had no significant impact on 1994 results of operations as the larger
acquisitions were not completed until the fourth quarter. These entities
have combined annual sales levels of approximately $220 million.
(3) Inventory:
The major classes of inventory are summarized as follows (000's
omitted):
December 31, 1996 December 31, 1995
Finished goods. . . . . . $ 88,083 $ 89,932
Work in process. . . . . . 49,681 51,904
Raw material . . . . . . . 66,472 60,054
$ 204,236 $ 201,890
If the first-in, first-out (FIFO) method had been used for inventories
valued at LIFO cost, such inventories would have been $10,959,000 and
$12,167,000 higher at December 31, 1996 and 1995, respectively.
(4) Property, Plant and Equipment:
The major classes of property, plant and equipment are summarized as
follows (000's omitted):
December 31, 1996 December 31, 1995
Land and improvements . . . $ 17,457 $ 15,015
Buildings . . . . . .. . . 107,343 93,312
Machinery and equipment. . . . . 413,636 352,176
538,436 460,503
Less accumulated depreciation.. (218,830) (168,566)
Property, plant and equipment..$ 319,606 $ 291,937
(5) Financing:
Financing consists of the following (000's omitted):
December 31, 1996 December 31, 1995
Notes payable . . . . . $100,600 $115,300
Other . . . . . . . . . . 135,727 168,287
236,327 283,587
Less-currently payable.. . 16,757 14,970
$219,570 $268,617
The Notes had an original average life of approximately 6.5 years and
an average interest cost of 7.2%. Principal amortization began in December
1995 and continues through April 2003. The estimated fair value of the
Notes was $101 million and $120 million as of December 31, 1996 and 1995.
Other includes principally short-term borrowings under uncommitted
lines of credit which are payable upon demand. The carrying amount
approximates fair value. The Company has a bank credit facility which
provides revolving credit through September 30, 2001, of up to $250 million.
The Company has complied with covenants relating to maintenance of working
capital, net worth, debt levels, interest coverage, and payment of dividends
applicable to the notes and the revolving credit facility. The facility
provides funds for general corporate purposes at an interest rate of LIBOR
plus .125%. Weighted average borrowings under the bank facility were $-0-,
$5,000,000 and $2,986,000 for the years ended December 31, 1996, 1995 and
1994. Maximum amounts outstanding for these years were $-0-, $60,000,000
and $33,525,000 respectively. The Company is charged a fee of .075% per
annum for the facility. Commitment and facility fees of $234,000, $216,000
and $258,000 were incurred in 1996, 1995 and 1994. Interest expense of
$7,150,000 and $6,112,000 is included in discontinued operations for the
years ended December 31, 1995 and 1994. The weighted average interest rate
for short-term borrowings was 5.8%, 6.0% and 5.1% for each of the three
years ended December 31, 1996.
Other debt is classified as noncurrent as management intends to
refinance it and the bank credit facility provides the ability to refinance
maturities to September 30, 2001.
The minimum principal payments during the next five years are as
follows: 1997 - $16,757,000; 1998 - $14,835,000; 1999 - $41,335,000; 2000 -
$135,000; 2001 - $132,860,000; and $30,405,000 thereafter.
(6) Accrued Expenses and Other Liabilities:
Selected accrued expenses and other liabilities include the following
(000's omitted):
December 31, 1996 December 31, 1995
Current Noncurrent Current Noncurrent
Employee compensation . . $ 43,380 $ 34,022 $ 34,419 $ 26,236
Insurance, including self
insurance . . . . . .. . 9,992 48,372 8,897 41,064
Post retirement benefits. . 5,000 71,819 3,000 73,844
Environmental compliance . 29,725 52,866 28,197 60,015
Approximately $21 million of accrued expenses and other liabilities were
guaranteed by bank letters of credit.
(7) Pension and Employee Benefit Plans:
The Company has noncontributory defined benefit pension plans which
cover certain of its domestic hourly employees. Benefit accruals under most
of these plans have ceased, and pension expense for defined benefit plans is
not significant for any of the periods presented. It is the Company's
policy to fund, at a minimum, amounts required by the Internal Revenue
Service.
The following sets forth the funded status of the plans as of the most
recent actuarial valuations (000's omitted):
1996 1995
Assets Exceed Accumulated Assets Exceed Accumulated
Accumulated Benefits Accumulated Benefits
Benefits Exceed Assets Benefits Exceed Assets
Actuarial present value of
benefit obligations:
Vested benefit obligation.. $56,216 $55,587 $58,595 $57,042
Accumulated benefit
obligation. . . . . . . . 57,637 58,371 59,516 59,649
Projected benefit obligation 57,650 58,371 59,516 59,649
Fair value of plan assets
(consisting of stocks, bonds
and temporary cash
investments).. . . . . . . 79,226 55,040 72,969 56,240
Projected benefit obligation
(in excess of) or less than
plan assets. . . . . . . . . 21,576 (3,331) 13,453 (3,409)
Unrecognized net (gain)loss .(14,360) 4,257 (4,120) 2,919
Unrecognized net asset. . . . (487) (1,129) (605) (1,269)
Pension (liability) prepaid
recognized in the balance
sheet. . . . . . . . . . . .$ 6,729 $ (203) $ 8,728 $(1,759)
The expected long-term rate of return on plan assets was 10%. The
discount rate used in determining pension cost and benefit obligations was
7.5% at January 1, 1996 and December 31, 1996.
Substantially all employees not covered by defined benefit plans are
covered by defined contribution plans which generally provide funding based
on a percentage of compensation.
Pension expense for all plans amounted to $16,754,000, $11,870,000 and
$8,677,000 for the years ended December 31, 1996, 1995 and 1994,
respectively.
In addition to providing pension benefits, the Company provides
certain healthcare and life insurance benefits for some of its retired
employees. Certain employees may become eligible for these benefits as they
reach normal retirement age while working for the Company.
Post retirement benefits cost included the following components (000's
omitted):
1996 1995 1994
Service cost . . . . . . . .$ 536 $ 298 $ 256
Interest cost . . . . . . . . 4,295 4,734 3,995
$4,831 $5,032 $4,251
The following sets forth the program's funded status (000's omitted):
December 31, 1996 December 31, 1995
Accumulated Post Retirement
Benefit Obligation (APBO):
Retirees. . . . . . . . $52,387 $52,788
Fully eligible active
participants. . . . .. . 10,563 10,840
Other active participants. 9,243 11,265
Total APBO . . . . . . . . 72,193 74,893
Net Gains . . . . . . . . . . 4,626 1,951
Plan assets . .. . . . . . . - -
Accrued Liability . . . . . $76,819 $76,844
A 10% annual rate of increase in per capita costs of covered
healthcare benefits was assumed for 1997, decreasing to 6% by 2002. A 1%
increase in the assumed cost trend assumption would increase the APBO by
$7.2 million and would have increased 1996 costs by approximately $600,000.
A discount rate of 7.5% was used to determine both Plan costs and the APBO
as of December 31, 1995 and 1996.
(8) Stock Transactions:
The Company has adopted a non-qualified stock option plan for which it
is authorized to grant options to purchase up to 5,000,000 shares. Under
the plan, options are granted at not less than 85% of existing market
prices, expire ten years from the date of grant and generally vest ratably
over a five-year period. An option to acquire 1,000,000 shares was granted
to a senior executive outside of the plan in 1990.
Changes in stock options were as follows:
Number of Shares
Under Option
Outstanding at January 1, 1994 3,045,376
Granted (average $23.06 per share) 456,100
Exercised (average $8.38 per share) (58,774)
Cancelled (41,600)
Outstanding at December 31, 1994 3,401,102
Granted (average $30.71 per share) 383,300
Exercised (average $9.54 per share) (208,006)
Cancelled (136,520)
Outstanding at December 31, 1995
(average $14.23 per share) 3,439,876
Granted (average $37.61 per share) 887,100
Exercised (average $7.76 per share) (483,233)
Cancelled (188,508)
Outstanding at December 31, 1996
(at $5.94 to $45.63 per share,
average $20.35 per share) 3,655,235
As of December 31, 1996, options with a weighted average remaining
life of 6.9 years covering 1,920,000 shares were exercisable at $5.94 to
$32.63 per share (average $12.48 per share) and options covering 949,284
shares remain available to be granted.
Options outstanding at December 31, 1996 are summarized below:
Average Average Average
Number Exercise Remaining Number Exercise
Exercise Price Outstanding Price Life Exercisable Price
$5.94 to $8.50 871,594 $6.81 3 years 872,000 $6.81
$9.00 to $13.50 315,150 $10.59 5 years 306,000 $10.11
$14.94 to $22.25 936,570 $15.84 6 years 553,000 $15.79
$22.50 to $28.88 325,560 $23.50 8 years 126,000 $23.50
$31.13 to $45.63 1,206,361 $35.80 9 years 63,000 $32.02
Nonqualified options have been issued only at fair market value
exercise prices as of the date of grant during the periods presented herein,
and the Company's policy does not recognize compensation costs for options
of this type. Beginning in 1996, the pro-forma costs of these options
granted subsequent to January 1, 1995 have been calculated using the Black-
Scholes option pricing model and assuming a 7% risk-free interest rate, a
10-year life for the option, a 15% expected volatility and dividends at the
current annual rate. The weighted average grant date fair market value of
options issued was approximately $13 per share in 1995 and $15 per share in
1996. Had this method been used in the determination of income for 1996,
net income would have decreased by approximately $1.4 million and earnings
per share would have decreased by $.02. Since this amount represents only
the proforma effect of options granted since January 1, 1995, there was only
a negligible impact on reported net income for 1995, and the 1995 and 1996
proforma amounts are not likely to be representative of the effects on
proforma net income for future years.
(9) Leases and Commitments:
The Company's leases extend for varying periods of time up to 10 years
and, in some cases, contain renewal options. Future minimum rental payments
for all operating leases having initial or remaining noncancelable lease
terms in excess of one year are $14,215,000 in 1997, $11,836,000 in 1998,
$8,184,000 in 1999, $4,682,000 in 2000, $4,106,000 in 2001 and
$10,762,000 thereafter. Total rent expense charged to income for all
operating leases was $16,009,000, $16,067,000 and $8,947,000 for the years
ended December 31, 1996, 1995, and 1994, respectively.
(10) Litigation and Contingencies:
A former subsidiary of the Company is engaged in litigation in
multiple states with respect to product liability. The Company sold the
subsidiary in 1987. Under the terms of the sale agreement, the Company
agreed to indemnify the buyer of the subsidiary for product liability
related to tools manufactured by the subsidiary prior to June 4, 1987. The
cases involve approximately 3,000 plaintiffs, in state and federal courts in
multiple states. All other major U.S. air tool manufacturers are also
defendants. The gravamen of these complaints is that the defendants' air
tools, when used in different types of manufacturing environments over
extended periods of time, were defective in design and caused various
physical injuries. The plaintiffs seek compensatory and punitive damages.
The cases are in preliminary stages of discovery and pleading and the
Company intends to defend its position vigorously. The Company's maximum
indemnification obligation under the contract is approximately $85,000,000.
The Company believes it has insurance coverage for all or a substantial part
of the damages, if any. The outcome of this litigation is not currently
predictable.
A subsidiary, Joslyn Manufacturing Company (JMC), previously operated
wood treating facilities that chemically preserved utility poles, pilings
and railroad ties. All such treating operations were discontinued or sold
prior to 1982. These facilities used wood preservatives that included
creosote, pentachlorophenol and chromium-arsenic-copper. While
preservatives were handled in accordance with then existing law,
environmental law now imposes retroactive liability, in some circumstances,
on persons who owned or operated wood-treating sites. JMC is remediating
some of its former sites and will remediate other sites in the future. The
Company has made a provision for environmental remediation; however, there
can be no assurance that estimates of environmental liabilities will not
change.
JMC is a defendant in a class action tort suit. The suit alleges
exposure to chemicals, allegedly causing various physical injuries, and
property devaluation resulting from wood treating operations previously
conducted at a Louisiana site. The size of the class, the number of
injuries related to the alleged exposures and the amount of alleged damages
are all disputed and uncertain. The Company has tendered the defense of
the suit to its insurance carrier. The Company believes that it may have
adequate insurance coverage for the litigation; however, because of the
above uncertainties, the Company is unable to determine at this time the
potential liability, if any.
In addition to the litigation noted above, the Company is from time to
time subject to routine litigation incidental to its business. These
lawsuits primarily involve claims for damages arising out of the use of the
Company's products, some of which include claims for punitive as well as
compensatory damages. The Company is also involved in proceedings with
respect to environmental matters including sites where the Company has been
identified as a potentially responsible party under federal and state
environmental laws and regulations. The Company believes that the results
of the above noted litigation and other pending legal proceedings will not
have a materially adverse effect on the Company's results of operations or
financial condition, notwithstanding any related insurance recoveries.
A subsidiary of the Company has sold, with limited recourse, certain
of its accounts and notes receivable. A provision for estimated losses as a
result of the limited recourse has been included in accrued expenses. No
gain or loss arose from these transactions.
(11) Income Taxes:
The provision for income taxes for the years ended December 31
consists of the following (000's omitted):
1996 1995 1994
Current-
Federal. .. . . . . . . . . $62,908 $62,225 $61,455
State and local.. . . . . . 5,000 7,000 6,200
Foreign. . . . .. . . . . . 7,000 4,000 3,210
Total Current $74,908 $73,225 $70,865
Deferred-
Federal. . . . . . . . . . . 5,500 (5,000) (19,000)
Other. . . . . . . . . . . . 1,393 (932) (2,958)
Total Deferred 6,893 (5,932) (21,958)
Income tax provision . . . . $81,801 $67,293 $48,907
Deferred income taxes are reflected in prepaid expenses and other
current assets and in other assets. Deferred tax assets (the valuation
allowances relate to foreign jurisdictions where operating loss
carryforwards exist) consist of the following (000's omitted):
December 31,
1996 1995
Bad debt allowance . . . . . . . . . . . $ 5,505 $ 4,681
Inventories . . . . . . . . . . . . . . (171) (926)
Property, plant and equipment . . . . . . (29,100) (25,395)
Post retirement benefits. . . . . . . . . 30,552 28,405
Insurance, including self insurance . . . 18,920 18,486
Environmental compliance . .. . . . . . . 28,102 32,638
Other accruals . . . . . . . . . . . . . . 42,559 35,603
All other accounts . . . . . . . . . . . . (4,793) (3,840)
Operating loss carryforwards . . . . . . . 8,265 7,000
Gross deferred tax asset . . . . . . . . . 99,839 96,652
Valuation allowances.. . . . . . . . . . (8,265) (7,000)
Net deferred tax asset . . . . . . . . . .$ 91,574 $ 89,652
The effective income tax rate for the years ended December 31 varies
from the statutory Federal income tax rate as follows:
Percentage of Pre-Tax Earnings
1996 1995 1994
Statutory Federal income tax rate. . 35.0% 35.0% 35.0%
Increase (decrease) in tax rate
resulting from:
Permanent differences in amortization
of certain assets for tax and
financial reporting purposes. . . . 3.4 2.9 2.8
State income taxes (net of Federal
income tax benefit).. . . . . . . . . 1.6 2.6 2.9
Taxes on foreign earnings. . . . . . (1.0) (1.6) (0.4)
Effective income tax rate. .. . . . 39.0% 38.9% 40.3%
(12) Segment Data:
The Company operates within two major business segments: Tools and
Components, and Process/Environmental Controls. The Tools and Components
segment has a customer which accounted for approximately 14%, 16% and 21% of
total sales in 1996, 1995 and 1994, respectively.
Operating profit represents total revenues less operating expenses,
excluding interest and taxes on income. The identifiable assets by segment
are those used in each segment's operations. Intersegment amounts are
eliminated to arrive at consolidated totals.
The detail segment data is presented in the following table (000's
omitted):
Operations in Different Industries -
Year Ended December 31, 1996 1995 1994
Total Revenues:
Tools and Components $1,103,443 $1,005,005 $ 809,989
Process/Environmental Controls 708,435 481,764 303,984
$1,811,878 $1,486,769 $1,113,973
Operating Profit:
Tools and Components $ 128,118 $ 112,981 $ 81,463
Process/Environmental Controls 112,243 80,804 56,632
Other (14,225) (13,528) (13,668)
$ 226,136 $ 180,257 $ 124,427
Identifiable Assets:
Tools and Components $ 861,345 $ 821,604 $ 687,908
Process/Environmental Controls 849,199 599,466 340,952
Other 54,530 64,921 76,785
$1,765,074 $1,485,991 $1,105,645
Depreciation and Amortization:
Tools and Components $ 40,237 $ 35,211 $ 32,220
Process/Environmental Controls 28,389 23,316 10,334
$ 68,626 $ 58,527 $ 42,554
Capital Expenditures:
Tools and Components $ 31,346 $ 48,500 $ 40,392
Process/Environmental Controls 19,909 10,672 8,348
Sales of Fixed Assets - - (13,929)
$ 51,255 $ 59,172 $ 34,811
Operations in Geographical Areas -
Year Ended December 31, 1996 1995 1994
Total Revenues:
United States. . . . . . $1,565,110 $1,235,933 $1,004,697
Europe .. . .. . . . . . 205,416 205,228 77,126
Other. . . . . . . . . . 41,352 45,608 32,150
$1,811,878 $1,486,769 $1,113,973
Operating Profit:
United States. .. . . . $ 207,433 $ 156,170 $ 115,589
Europe . . . . . . . . . 15,107 20,348 7,179
Other. . . . . . . . . . 3,596 3,739 1,659
$ 226,136 $ 180,257 $ 124,427
Identifiable Assets:
United States. . . . . . $1,552,665 $1,292,166 $1,029,825
Europe . . . . . . . . . 188,660 173,949 62,833
Other. . . . . . . . . . 23,749 19,876 12,987
$1,765,074 $1,485,991 $1,105,645
Export sales were approximately $144 million, $107 million and $91 million
for the years ended December 31, 1996, 1995 and 1994.
(13) Quarterly Data-Unaudited (000's omitted except per share data)
1996
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Net revenues. . . $409,557 $434,897 $470,787 $496,637
Gross profit. . . 124,293 137,988 149,021 160,730
Operating profit. 47,128 56,302 60,293 62,413
Earnings from
continuing operations 26,928 32,525 33,577 34,929
Gain on sale from
discontinued
operations . . . . . 79,811 - - -
Net earnings. . . . . 106,739 32,525 33,577 34,929
Earnings per share:
Continuing operations $ .45 $ .54 $ .56 $ .58
Discontinued operations 1.34 - - -
Net earnings $1.79 $ .54 $ .56 $ .58
1995
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Net revenues. . . .. . $335,982 $351,891 $368,724 $430,172
Gross profit. .. . . . 96,707 107,967 111,110 131,363
Operating profit. . . . 36,838 45,709 47,094 50,616
Earnings from continuing
operations. . . . . . 21,412 26,640 28,348 29,366
Earnings from
discontinued operations 436 580 452 1,082
Net earnings. . .. . . . 21,848 27,220 28,800 30,448
Earnings per share:
Continuing operations $ .36 $ .45 $ .47 $ .49
Discontinued operations .01 .01 .01 .02
Net earnings $ .37 $ .45 $ .48 $ .51
<PAGE>
Danaher Corporation and Subsidiaries
Operating Executives
A.L. Hyde Company
Richard L. Garthwaite
President
American Sigma, Inc.
William G. Hungerford
President
Communications Technology Corporation
Alan G. Hutcheson
President
Cyberex, Inc.
Gus Stevens
President
Danaher Controls
James W. Appelgren
President
Danaher Tool Group
Professional Tools
Division
Steven E. Simms
President
Danaher Tool Group
Special Markets Division
Thomas R. Sulentic
President
Delta Consolidated Industries
Thomas P. Joyce, Jr.
President
Gulton-Graphic Instruments
William J. Butler
President
Hengstler GmbH
Hermann E. Braun
President
Hennessy Industries, Inc.
Steven E. Simms
Acting President
Jacobs Chuck Manu-
facturing Company
Dennis D. Claramunt
President
Jacobs Vehicle Systems, Inc.
Gregory T.H. Davies
President
Jennings Technology Corporation
John P. Williamson
President
Joslyn Electronic Systems Corporation
S. Keith Swanson
President
Joslyn Hi-Voltage Corporation
James F. Domo
President
Joslyn Manufacturing Company
Gary P. Prasser
President
Joslyn Sunbank Corporation
P. Edward Prutzman
President
Matco Tools Corporation
Thomas N. Willis
President
M&M Precision Systems Corporation
James E. Helton
President
Namco Controls Corporation
Alex A. Joseph
President
Partlow Corporation
Lawrence C. Curtis
President
Qualitrol Corporation
Alex A. Joseph
Acting President
TxPort, Inc.
Mark H. Hoffman
President
Veeder-Root Company
H. Lawrence Culp, Jr.
President
Officers and Senior
Executives
George M. Sherman
President and Chief
Executive Officer
Patrick W. Allender
Senior Vice President,
Chief Financial Officer and Secretary
C. Scott Brannan
Vice President - Administration
and Controller
Dennis D. Claramunt
Vice President and Group Executive
Daniel L. Comas
Vice President - Corporate
Development
H. Lawrence Culp, Jr.
Vice President and Group Executive
Gregory T.H. Davies
Vice President and Group Executive
Mark C. DeLuzio
Vice President - Danaher
Business System
James H. Ditkoff
Vice President - Finance & Tax
Steven E. Simms
Vice President and Group Executive
John P. Watson
Vice President and Group Executive
Directors
Mortimer M. Caplin
Partner
Caplin & Drysdale
Donald J. Ehrlich
President, Chairman and
Chief Executive Officer
Wabash National Corp.
Walter G. Lohr, Jr.
Partner
Hogan & Hartson
Mitchell P. Rales
Partner
Equity Group Holdings
Chairman of the
Executive Committee
Danaher Corporation
Steven M. Rales
Partner
Equity Group Holdings
Chairman of the Board
Danaher Corporation
George M. Sherman
President and Chief
Executive Officer
Danaher Corporation
A. Emmet Stephenson, Jr.
President
Stephenson and Company
<PAGE>
<PAGE>
Auditors
Arthur Andersen LLP
Washington, D.C.
Shareholders' Information
Shareholder requests for information or assistance,
please write or call our corporate office.
Danaher Corporation
c/o Investor Relations
1250 24th Street, N.W. Suite 800
Washington, D.C. 20037
(202) 828-0850
Internet Address: http://www.danaher.com
Stock Listing
Symbol: DHR
New York and Pacific Stock Exchanges
Transfer Agent
ChaseMellon Shareholder Services, LLC
Pittsburgh, Pennsylvania
Form 10-K
A copy of the Annual Report to the Securities and Exchange Commission
on Form 10-K may be obtained by writing to Danaher Corporation
MARKET PRICES OF COMMON STOCK
1996 1995
High Low High Low
First Quarter . . . . . 37 1/4 29 1/2 29 7/8 24 1/4
Second Quarter . . .. . 43 1/2 36 1/8 32 26 3/8
Third Quarter. . . .. . 43 1/8 36 1/8 34 3/8 30 1/4
Fourth Quarter. . .. . 46 5/8 40 1/2 33 1/4 30 1/4
High and low per share data are as quoted on the New York Stock Exchange.
