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 April 2, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 1-8089
DANAHER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 59-1995548
(State of incorporation) (I.R.S. Employer
Identification number)
1250 24th Street, N.W., Suite 800
Washington, D.C. 20037
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 202-828-0850
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90
days.
Yes X No
The number of shares of common stock outstanding at April 22, 1999
was 135,408,036.<PAGE>
DANAHER CORPORATION
INDEX
FORM 10-Q
PART I - FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
at April 2, 1999 and December 31, 1998 1
Consolidated Condensed Statements of
Earnings for the three months ended
April 2, 1999 and March 27, 1998 2
Consolidated Condensed Statements of
Cash Flows for the three months ended
April 2, 1999 and March 27, 1998 3
Notes to Consolidated Condensed
Financial Statements 4
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations 5-6
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)
April 2, December 31,
1999 1998
(unaudited) (NOTE 1)
ASSETS
Current Assets:
Cash and equivalents $ 68,176 $ 41,923
Accounts receivable, net 442,119 467,108
Inventories:
Finished goods 126,266 122,141
Work in process 74,391 74,385
Raw material and supplies 124,428 126,960
Total inventories 325,085 323,486
Prepaid expenses and other
current assets 54,606 54,387
Total current assets 889,986 886,904
Property, plant and equipment, net
of accumulated depreciation of
$455,474 and $441,593, respectively 462,802 471,025
Other assets 131,635 96,213
Excess of cost over net assets of
acquired companies, net 1,261,741 1,284,573
Total assets $2,746,164 $2,738,715
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current
portion of long-term debt $ 53,925 $ 59,639
Accounts payable 173,701 158,596
Accrued expenses 496,644 470,470
Total current liabilities 724,270 688,705
Other liabilities 282,978 285,261
Long-term debt 347,480 412,918
Stockholders' equity:
Common stock - $.01 par value 1,469 1,467
Additional paid-in capital 379,980 374,412
Retained earnings 1,031,789 978,655
Accumulated other comprehensive
income (21,802) (2,703)
Total stockholders' equity 1,391,436 1,351,831
Total liabilities and
stockholders' equity $2,746,164 $2,738,715
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
April 2, March 27,
1999 1998
Net sales $ 754,590 $ 646,240
Cost of sales 479,441 418,094
Selling, general and
administrative expenses 170,041 147,733
Goodwill and other amortization 9,168 6,399
Total operating expenses 658,650 572,226
Operating profit 95,940 74,014
Interest expense, net 6,251 3,197
Earnings from continuing operations
before income taxes 89,689 70,817
Income taxes 34,530 26,614
Net earnings $ 55,159 $ 44,203
Basic earnings per share $ .41 $ .33
Average common stock outstanding 135,638 134,032
Diluted earnings per share $ .39 $ .32
Average common stock and common
equivalent shares outstanding 139,889 138,247
See notes to consolidated condensed financial statements.
<PAGE>
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(000's omitted)
(unaudited)
Three Months Ended
April 2, March 27,
1999 1998
Cash flows from operating activities:
Net earnings from operations $ 55,159 $ 44,203
Noncash items, depreciation and
amortization 30,551 23,205
(Increase) decrease in accounts receivable 21,671 2,530
Increase in inventories (2,238) (6,814)
Increase in accounts payable 14,792 14,210
Change in other assets and liabilities (15,258) 43,857
Total operating cash flows 104,677 121,191
Cash flows from investing activities:
Payments for additions to property,
plant, and equipment, net (12,152) (16,905)
Cash paid for acquisitions - (375,441)
Net cash provided by (used in)
investing activities (12,152) (392,346)
Cash flows from financing activities:
Proceeds from issuance of common stock 5,570 2,611
Dividends paid (2,025) (3,076)
Borrowing (repayment) of debt (71,152) 275,980
Net cash provided by (used in)
financing activities (67,607) 275,515
Effect of exchange rate changes on cash 1,335 229
Net change in cash and equivalents 26,253 4,589
Beginning balance of cash equivalents 41,923 70,821
Ending balance of cash equivalents $ 68,176 $ 75,410
Supplemental disclosures:
Cash interest payments $ 1,621 $ 296
Cash income tax payments $ 9,430 $ 9,693
See notes to consolidated condensed financial statements.
<PAGE>
DANAHER CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
NOTE 1. GENERAL
The consolidated condensed financial statements included
herein have been prepared by Danaher Corporation (the Company)
without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations; however, the Company believes that the
disclosures are adequate to make the information presented not
misleading. The condensed financial statements included herein
should be read in conjunction with the financial statements and
the notes thereto included in the Company's 1998 Annual Report on
Form 10-K.
In the opinion of the registrant, the accompanying
financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the
financial position of the Company at April 2, 1999 and December
31, 1998, its results of operations for the three months ended
April 2, 1999, and March 27, 1998, and its cash flows for the
three months ended April 2, 1999 and March 27, 1998.
Total comprehensive income was $36.1 million and $46.3
million for the 1999 and 1998 quarters, respectively.
NOTE 2. SEGMENT INFORMATION
Segment information is presented consistently with the basis
described in the 1998 Annual Report. There has been no material
change in total assets or liabilities by segment. Segment
results for the 1999 first quarter are shown below:
Sales Operating Profit
1999 1998 1999 1998
Process/Environmental Controls $432,744 $346,530 $64,750 $48,250
Tool and Components 321,846 299,710 35,290 29,491
Other - - (4,100) (3,727)
$754,590 $646,240 $95,940 $74,014
NOTE 3. MERGER WITH HACH COMPANY
On April 22, 1999, the Company announced an agreement to issue
common stock in exchange for each outstanding share of Hach Company.
The transaction will be a tax-free reorganization and will be
accounted for as a pooling-of-interests. Accordingly, future
financial statements will be restated to reflect the combined
companies. Sales reported will increase $137.0 million in 1998 and
$127.1 million in 1997. Reported net income will increase $9.2
million in 1998 and $12.0 million in 1997. 1998 reported diluted
earnings per share will increase approximately $.01 and 1997 reported
diluted earnings per share will increase approximately $.03. Results
for interim periods have not yet been determined on a combined company
basis. Hach is engaged in the manufacture and marketing of
instruments and kits to analyze the chemical and other properties of
water and aqueous solutions.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net Sales for the first quarter of 1999 of $754.6 million were
17% higher than the 1998 quarter. Sales were higher in both business
segments. Of this increase, acquisitions accounted for approximately
11% and companies included in both periods accounted for 6%.
Increases in the volume of shipments in all business segments provided
this growth.
Gross profit margin for the first quarter of 1999, as a
percentage of sales, was 36.5%, which represents a 1.2 percentage
point increase from 1998 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 1999 first
quarter were 15% higher than in 1998 because of higher sales levels.
As a percentage of sales, these costs decreased by 0.4 percentage
points in 1999 to 22.5%, principally due to productivity improvements
more than offsetting higher costs in this area associated with
acquisitions made since the first quarter of 1998.
Interest expense of $6,251,000 in 1999 was higher than the
corresponding 1998 period. Average debt levels were higher in 1999,
reflecting the large increase in debt associated with the Pacific
Scientific acquisition for only the final two weeks of the 1998 first
quarter.
The 1999 effective tax rate of 38.5% is 0.9% higher than the 1998
effective rate, mainly due to adjustments to the tax rate made by
Fluke in the 1998 quarter, which represented the fiscal year-end for
Fluke.
Liquidity and Capital Resources
During the first quarter of 1999, the Company experienced
increases in inventory and accounts payable. This is principally due
to the lower activity levels experienced in the last weeks of the year
due to the holiday season. Total debt under the Company's borrowing
facilities decreased to $401.4 million at April 2, 1999, compared to
$472.6 million at December 31, 1998. This decrease relates
principally to the strong cash flow from operations.
The Company declared a regular quarterly dividend of $.015 per
share payable on April 30, 1999, to holders of record on March 26,
1999.
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 acquisitions, 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
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DANAHER CORPORATION:
Date: April 22, 1999 By: /s/ Patrick W. Allender
Patrick W. Allender
Chief Financial Officer
Date: April 22, 1999 By: /s/ C. Scott Brannan
C. Scott Brannan
Controller
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