Danaher (DHR) 8-K Danaher Corporation Reports Record Fourth Quarter and 2004 Results

Exhibit 99.1

DANAHER CORPORATION REPORTS RECORD FOURTH QUARTER AND 2004 RESULTS

WASHINGTON, D.C., January 27, 2005 — Danaher Corporation (NYSE:DHR) announced today results for the fourth quarter and year ended December 31, 2004. Net earnings for the fourth quarter of 2004 were $217.7 million, or $0.67 per diluted share, a 26% increase compared with $169.9 million, or $0.53 per diluted share for the fourth quarter of 2003. The prior year’s net earnings included a gain related to the curtailment of the Company’s cash balance pension plan of $0.05 per share. Excluding this gain, earnings per diluted share for the fourth quarter of 2004, increased 40% over the comparable period for 2003. Sales for the 2004 fourth quarter were $1,979.6 million compared to $1,488.8 million for the fourth quarter of 2003, an increase of 33%.

Net earnings for the full year 2004 were $746 million, or $2.30 per diluted share, a 36% increase, compared with $536.8 million, or $1.69 per diluted share for 2003. Sales for 2004 were $6,889.3 million compared to $5,293.9million in 2003, an increase of 30%.

The Company also announced today that it has expanded its reporting to three segments. The three segments are Professional Instrumentation, Industrial Technologies and Tools and Components. The Professional Instrumentation segment will include the Environmental, Medical Technology and Electronic Test platforms. The Industrial Technologies segment will include the Motion and Product Identification platforms as well as our focused niche businesses previously included in the Process/Environmental Controls segment. The Tools and Components segment will remain unchanged.

H. Lawrence Culp, Jr., President and Chief Executive Officer, stated, “We are pleased to report record fourth quarter and full year results. The 33% sales increase included an 8.5% increase in sales from existing businesses as we experienced strong gains across all three of our segments. We have again achieved record cash flow with 2004 operating cash flow of $1033.2 million, a 20% increase over the 2003 level of $861.5 million. 2004 was an outstanding year and we remain optimistic about the opportunities ahead in 2005.”

Danaher Corporation is a leading manufacturer, specializing in Professional Instrumentation, Industrial Technologies and Tools and Components. (www.danaher.com)

Statements in this release, including the attachments to this release, that are not strictly historical may be “forward-looking” statements, which involve risks and uncertainties. These include risks and uncertainties relating to customer and supplier relationships and prices, competition, market demand, litigation and other contingent liabilities, the integration and operation of acquired businesses, and economic, political, governmental and technological factors affecting the Company’s operations, markets, products, services and prices, among others, as set forth in the Company’s SEC filings.

Please contact:

Andy Wilson

Vice President, Investor Relations

Danaher Corporation

2099 Pennsylvania Avenue

Washington, D.C. 20006

Telephone: (202) 828-0850

Fax: (202) 828-0860

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(in thousands, except per share amounts)

	Quarter Ended						Year Ended
	12/31/04			12/31/03			12/31/04			12/31/03
Net sales	$	1,979,580		$	1,488,778		$	6,889,301		$	5,293,876
Cost of sales		1,143,878			884,499			3,996,636			3,154,809
Selling, general and administrative		521,739			364,670			1,795,673			1,316,357
(Gains) losses on sale of real estate and other assets		(2,041	)		83			(8,141	)		(785	)
Gain on pension plan curtailment		—			(22,500	)		—			(22,500	)
Total operating expenses		1,663,576			1,226,752			5,784,168			4,447,881
Operating profit		316,004			262,026			1,105,133			845,995
Interest expense		(14,199	)		(15,046	)		(54,984	)		(59,049	)
Interest income		2,711			2,941			7,568			10,089
Earnings before income taxes		304,516			249,921			1,057,717			797,035
Income taxes		86,786			79,975			311,717			260,201
Net earnings	$	217,730		$	169,946		$	746,000		$	536,834
Net earnings per share:
Basic	$	0.70		$	0.55		$	2.41		$	1.75
Diluted	$	0.67		$	0.53		$	2.30		$	1.69
Average common stock and common equivalent shares outstanding:
Basic		309,498			307,968			308,964			306,792
Diluted		329,083			325,268			327,701			323,140

These statements are presented for reference only. The final audited statements will include footnotes, which should be referenced when available, to more fully understand the contents of these statements.

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

	As of December 31,
	2004		2003
ASSETS
Current assets:
Cash and equivalents	$	609,115	$	1,230,156
Trade accounts receivable, less allowance for doubtful accounts		1,231,065		868,097
Inventories		703,996		536,227
Prepaid expenses and other		374,514		307,671
Total current assets		2,918,690		2,942,151
Property, plant and equipment, net		752,966		573,365
Other assets		91,705		32,562
Goodwill		3,970,269		3,064,109
Other intangible assets, net		760,263		277,863
Total assets	$	8,493,893	$	6,890,050
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current portion of long-term debt	$	424,763	$	14,385
Trade accounts payable		612,066		472,994
Accrued expenses		1,165,457		892,624
Total current liabilities		2,202,286		1,380,003
Other liabilities		746,390		578,840
Long-term debt		925,535		1,284,498
Stockholders’ equity:
Common stock, one cent par value; 1,000,000 shares authorized; 336,946 and 335,388 issued; 308,920 and 307,362 outstanding		3,369		1,677
Additional paid-in capital		1,052,154		999,786
Accumulated other comprehensive income		116,037		(74,607	)
Retained earnings		3,448,122		2,719,853
Total stockholders’ equity		4,619,682		3,646,709
Total liabilities and stockholders’ equity	$	8,493,893	$	6,890,050

These statements are presented for reference only. The final audited statements will include footnotes, which should be referenced when available, to more fully understand the contents of these statements.

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended
	12/31/04			12/31/03
Cash flows from operating activities:
Net earnings	$	746,000		$	536,834
Depreciation and amortization		156,128			133,436
Change in trade accounts receivable		(110,007	)		1,505
Change in inventories		65,528			21,061
Change in accounts payable		65,315			58,209
Change in accrued expenses and other liabilities		135,616			72,097
Change in prepaid expenses and other assets		(25,364	)		38,402
Total operating cash flows		1,033,216			861,544
Cash flows from investing activities:
Payments for additions to property, plant and equipment		(115,906	)		(80,343	)
Proceeds from disposals of property, plant and equipment		30,894			12,926
Cash paid for acquisitions		(1,591,719	)		(312,283	)
Proceeds from divestitures		43,100			11,648
Net cash used in investing activities		(1,633,631	)		(368,052	)
Cash flows from financing activities:
Proceeds from issuance of common stock		45,957			50,497
Dividends paid		(17,731	)		(15,326	)
Proceeds from debt borrowings		130,000			5,262
Debt repayments		(196,281	)		(150,771	)
Net cash used in financing activities		(38,055	)		(110,338	)
Effect of exchange rate changes on cash		17,429			36,539
Net change in cash and equivalents		(621,041	)		419,693
Beginning balance of cash and equivalents		1,230,156			810,463
Ending balance of cash and equivalents	$	609,115		$	1,230,156

These statements are presented for reference only. The final audited statements will include footnotes, which should be referenced when available, to more fully understand the contents of these statements.

DANAHER CORPORATION AND SUBSIDIARIES

SEGMENT INFORMATION

(in thousands)

2004 Segment Presentation

	Quarter Ended						Year Ended
	12/31/04			12/31/03			12/31/04			12/31/03
Sales
Professional Instrumentation	$	934,804		$	547,992		$	2,915,690		$	1,916,014
Industrial Technologies		699,272			601,965			2,667,354			2,180,672
Tools and Components		345,504			338,821			1,306,257			1,197,190
	$	1,979,580		$	1,488,778		$	6,889,301		$	5,293,876
Operating Profit
Professional Instrumentation	$	171,023		$	109,195		$	544,005		$	357,529
Industrial Technologies		106,089			90,191			393,521			316,814
Tools and Components		48,976			47,017			198,251			173,821
Other		(10,084	)		(6,877	)		(30,644	)		(24,669	)
Gain on Pension Plan Curtailment		—			22,500			—			22,500
	$	316,004		$	262,026		$	1,105,133		$	845,995
Operating Margins
Professional Instrumentation		18.3	%		19.9	%		18.7	%		18.7	%
Industrial Technologies		15.2	%		15.0	%		14.8	%		14.5	%
Tools and Components		14.2	%		13.9	%		15.2	%		14.5	%
Total		16.0	%		17.6	%		16.0	%		16.0	%
Historical Segment Presentation
	Quarter Ended						Year Ended
	12/31/04			12/31/03			12/31/04			12/31/03
Sales
Process/Environmental Controls	$	1,634,076		$	1,149,957		$	5,583,044		$	4,096,686
Tools and Components		345,504			338,821			1,306,257			1,197,190
	$	1,979,580		$	1,488,778		$	6,889,301		$	5,293,876
Operating Profit
Process/Environmental Controls	$	277,112		$	199,386		$	937,526		$	674,343
Tools and Components		48,976			47,017			198,251			173,821
Other		(10,084	)		(6,877	)		(30,644	)		(24,669	)
Gain on Pension Plan Curtailment		—			22,500			—			22,500
	$	316,004		$	262,026		$	1,105,133		$	845,995
Operating Margins
Process/Environmental Controls		17.0	%		17.3	%		16.8	%		16.5	%
Tools and Components		14.2	%		13.9	%		15.2	%		14.5	%
Total		16.0	%		17.6	%		16.0	%		16.0	%

This information is presented for reference only. Final audited financial statements will include footnotes, which should be referenced when available, to more fully understand the contents of this information.

DANAHER CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

(in thousands, except per share amounts)

Impact on Earnings and Earnings Per Share of Pension Curtailment

		Quarter Ended							Year Ended
		12/31/04		12/31/03			% Var.		12/31/04		12/31/03
Net Earnings as reported		$	217,730	$	169,946				$	746,000	$	536,834
Interest Add- Back - Lyons			2,168		2,122					8,598		8,412
Total- as reported	A	$	219,898	$	172,068				$	754,598	$	545,246
Gain on Pension Curtailment, Net of Tax			—		(14,600	)				—		(14,600	)
Total- pro forma - excluding pension curtailment gain	B	$	219,898	$	157,468		40	%	$	754,598	$	530,646
Average Common Stock and Common Stock Equivalent Shares Outstanding	C		329,083		325,268					327,701		323,140
Diluted Earnings Per Share:
as reported	A/C	$	0.67	$	0.53		26	%	$	2.30	$	1.69
Pro forma - excluding pension curtailment gain	B/C	$	0.67	$	0.48		40	%	$	2.30	$	1.64

Impact on Operating Profit Excluding Gain on Pension Curtailment

	Quarter Ended							Year Ended
	12/31/04		12/31/03			% Var.		12/31/04		12/31/03			% Var.
Operating Profit as reported	$	316,004	$	262,026				$	1,105,133	$	845,995
Gain on Pension Curtailment		—		(22,500	)				—		(22,500	)
Total- pro forma - excluding pension curtailment gain	$	316,004	$	239,526		32	%	$	1,105,133	$	823,495		34	%

NOTE: The Company recorded a curtailment gain in 2003 as a result of freezing the ongoing contributions to its Cash Balance Pension Plan effective December 31, 2003. The Company has calculated the Earnings Per Share growth and increase in Operating Profit excluding the curtailment gain. Management believes this is a more accurate comparison of year over year earnings and operating profit improvement since inclusion of this gain abnormally impacts fourth quarter and full year results in 2003 and distorts the comparison with the current period results.

This information is presented for reference only. Final audited financial statements will include footnotes, which should be referenced when available, to more fully understand the contents of this information.