Exhibit 99.1
DANAHER REPORTS FOURTH QUARTER AND FULL YEAR 2007 RESULTS
WASHINGTON, D.C., January 24, 2008 — Danaher Corporation (NYSE:DHR) announced results for the fourth quarter and year ended December 31, 2007. Net earnings for the fourth quarter were $320 million, or $0.97 per diluted share. Earnings for the period include the results of operations of Tektronix since its acquisition in November, 2007. Included in the results are certain non-cash charges related to the Tektronix acquisition for purchased in-process research and development and the fair value adjustments to recorded inventory and deferred revenue which reduced net earnings by $66 million or $0.20 per diluted share in the period. Also included in the earnings per share results are gains of approximately $0.05 per diluted share related to reductions of income tax reserves as a result of the favorable resolution of certain prior year tax items. Absent these two items, adjusted earnings per diluted share was $1.12, a 19% increase over last years’ comparable adjusted earnings per diluted share from continuing operations of $0.94.
Attached is a reconciliation of adjusted diluted net earnings per share from continuing operations to diluted net earnings per share from continuing operations calculated according to GAAP, for the three and twelve month periods ended December 31, 2007 and the comparable prior year periods.
Sales from continuing operations for the 2007 fourth quarter were $3.1 billion, 19.5% higher than the $2.6 billion reported for the 2006 fourth quarter.
Net earnings from continuing operations for the full year 2007 were $1.2 billion, or $3.72 per diluted share. In addition to the fourth quarter 2007 items noted in the first paragraph, full year 2007 earnings per diluted share benefited from a $0.02 per diluted share gain related to the collection of indemnity proceeds and a $0.02 per diluted share gain resulting primarily from the impact of income tax rate reductions in certain international jurisdictions. Excluding these gains, as well as the other 2007 items referenced in the first paragraph, adjusted earnings per diluted share from continuing operations for the 2007 full year was $3.83, an increase of 19% compared to 2006 full year adjusted earnings per diluted share. Adjusted earnings per diluted share was $3.85 including the impact of $0.02 per diluted share for discontinued operations from prior quarters. For the 2007 full year, net earnings per diluted share was $4.19 which includes the gain on the sale of the Power Quality business in July, 2007.
Sales from continuing operations for 2007 were $11 billion compared to $9.6 billion for 2006, an increase of 16.5%.
H. Lawrence Culp, Jr., President and Chief Executive Officer, stated, “We are pleased once again to report record fourth quarter and full year results. For the quarter, growth from existing businesses, also known as core revenues, increased 4.5%. Operating cash flow from continuing operations for the year was a record $1.7 billion, representing an 11% increase over 2006. Despite softness in some of our OEM and U.S. consumer facing end markets, we continue to see strength across most of our businesses and remain confident in our ability to again deliver in 2008.”
Danaher Corporation is a leading manufacturer of Professional Instrumentation, Medical Technologies, Industrial Technologies, and Tools and Components (www.danaher.com).
Statements in this release that are not strictly historical, including the statements regarding expectations for 2008 and any other statements regarding events or developments that we believe or anticipate will or may occur in the future, may be “forward-looking” statements. There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements. These factors include, among other things, competition, our ability to develop and successfully market new products and technologies, our ability to expand our business in new geographic markets, our ability to identify, consummate and integrate appropriate acquisitions, litigation and other contingent liabilities including intellectual property matters, our compliance with applicable laws and
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regulations, the performance of our distribution and other channel partners, our ability to achieve projected efficiencies, cost reductions, sales growth and earnings, economic conditions in the end-markets we sell into, commodity costs and surcharges, currency exchange rates, tax audits, and general domestic and international economic conditions. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our 2006 Annual Report on Form 10-K and Third Quarter 2007 Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date of this release and the Company does not assume any obligation or intend to update any forward-looking statement except as required by law.
To download a copy of the full earnings report, please go to www.danaher.com.
Please contact:
Andy Wilson
Vice President, Investor Relations
Danaher Corporation
2099 Pennsylvania Avenue
Washington, D.C. 20006
Telephone: (202) 828-0850
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DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
($ in thousands, except per share amounts)
| Three Months Ended | Year Ended | |||||||||||||||
| 12/31/07 | 12/31/06 | 12/31/07 | 12/31/06 | |||||||||||||
Sales | $ | 3,141,177 | $ | 2,625,394 | $ | 11,025,917 | $ | 9,466,056 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of sales | 1,690,647 | 1,445,567 | 5,985,022 | 5,268,996 | ||||||||||||
Selling, general and administrative expenses | 769,178 | 627,793 | 2,713,097 | 2,273,227 | ||||||||||||
Research and development expenses | 216,582 | 109,827 | 601,424 | 440,002 | ||||||||||||
Other (income) expense | — | — | (14,335 | ) | (16,379 | ) | ||||||||||
Total operating expenses | 2,676,407 | 2,183,187 | 9,285,208 | 7,965,846 | ||||||||||||
Operating profit | 464,770 | 442,207 | 1,740,709 | 1,500,210 | ||||||||||||
Interest expense | (32,793 | ) | (25,811 | ) | (109,702 | ) | (79,375 | ) | ||||||||
Interest income | 2,735 | 1,236 | 6,092 | 8,008 | ||||||||||||
Earnings from continuing operations before income taxes | 434,712 | 417,632 | 1,637,099 | 1,428,843 | ||||||||||||
Income taxes | (114,487 | ) | (97,623 | ) | (423,101 | ) | (319,637 | ) | ||||||||
Earnings from continuing operations | 320,225 | 320,009 | 1,213,998 | 1,109,206 | ||||||||||||
Earnings from discontinued operations, net of income taxes | — | 3,708 | 155,906 | 12,823 | ||||||||||||
Net earnings | $ | 320,225 | $ | 323,717 | $ | 1,369,904 | $ | 1,122,029 | ||||||||
Earnings per share from continuing operations: | ||||||||||||||||
Basic | $ | 1.02 | $ | 1.04 | $ | 3.90 | $ | 3.60 | ||||||||
Diluted | $ | 0.97 | $ | 0.99 | $ | 3.72 | $ | 3.44 | ||||||||
Earnings per share from discontinued operations: | ||||||||||||||||
Basic | $ | 0.00 | $ | 0.01 | $ | 0.50 | $ | 0.04 | ||||||||
Diluted | $ | 0.00 | $ | 0.01 | $ | 0.47 | $ | 0.04 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 1.02 | $ | 1.05 | $ | 4.40 | $ | 3.64 | ||||||||
Diluted | $ | 0.97 | $ | 1.00 | $ | 4.19 | $ | 3.48 | ||||||||
Average common stock and common equivalent shares outstanding: | ||||||||||||||||
Basic | 315,437 | 308,894 | 311,225 | 307,984 | ||||||||||||
Diluted | 334,013 | 327,219 | 329,459 | 325,251 | ||||||||||||
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.
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DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31 ($ in thousands)
| 2007 | 2006 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and equivalents | $ | 239,108 | $ | 317,810 | ||
Trade accounts receivable, less allowance for doubtful accounts of $108,782 and $102,369 | 1,984,384 | 1,654,725 | ||||
Inventories | 1,193,615 | 988,709 | ||||
Prepaid expenses and other current assets | 632,660 | 475,495 | ||||
Total current assets | 4,049,767 | 3,436,739 | ||||
Property, plant and equipment, net | 1,108,634 | 868,623 | ||||
Other assets | 356,176 | 300,226 | ||||
Goodwill | 9,241,011 | 6,560,239 | ||||
Other intangible assets, net | 2,564,973 | 1,698,324 | ||||
Total assets | $ | 17,320,561 | $ | 12,864,151 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current Liabilities: | ||||||
Notes payable and current portion of long-term debt | $ | 330,480 | $ | 10,855 | ||
Trade accounts payable | 1,125,600 | 932,870 | ||||
Accrued expenses and other liabilities | 1,358,773 | 1,515,989 | ||||
Total current liabilities | 2,814,853 | 2,459,714 | ||||
Other liabilities | 2,024,256 | 1,336,916 | ||||
Long-term debt | 3,395,764 | 2,422,861 | ||||
Stockholders’ equity: | ||||||
Common stock - $0.01 par value, 500,000 shares authorized; 352,608 and 341,223 issued; 317,984 and 308,242 outstanding | 3,526 | 3,412 | ||||
Additional paid-in capital | 1,718,716 | 1,027,454 | ||||
Accumulated other comprehensive income | 542,690 | 191,985 | ||||
Retained earnings | 6,820,756 | 5,421,809 | ||||
Total stockholders’ equity | 9,085,688 | 6,644,660 | ||||
Total liabilities and stockholders’ equity | $ | 17,320,561 | $ | 12,864,151 | ||
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.
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DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31 ($ in thousands)
| 2007 | 2006 | |||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 1,369,904 | $ | 1,122,029 | ||||
Less: earnings from discontinued operations, net of tax | 155,906 | 12,823 | ||||||
Net earnings from continuing operations | 1,213,998 | 1,109,206 | ||||||
Non-cash items, net of the effect of discontinued operations: | ||||||||
Depreciation | 173,942 | 151,524 | ||||||
Amortization | 94,550 | 64,173 | ||||||
Stock compensation expense | 73,347 | 67,191 | ||||||
Change in deferred income taxes | 39,336 | 24,154 | ||||||
Change in trade accounts receivable, net | (72,555 | ) | (48,255 | ) | ||||
Change in inventories | 38,094 | 3,683 | ||||||
Change in accounts payable | 103,800 | 75,927 | ||||||
Change in prepaid expenses and other assets | 38,601 | (14,962 | ) | |||||
Change in accrued expenses and other liabilities | (3,805 | ) | 98,088 | |||||
Total operating cash flows from continuing operations | 1,699,308 | 1,530,729 | ||||||
Total operating cash flows from discontinued operations | (53,533 | ) | 16,522 | |||||
Net cash flows from operating activities | 1,645,775 | 1,547,251 | ||||||
Cash flows from investing activities: | ||||||||
Payments for additions to property, plant and equipment | (162,071 | ) | (136,411 | ) | ||||
Proceeds from disposals of property, plant and equipment | 15,537 | 9,988 | ||||||
Cash paid for acquisitions | (3,576,562 | ) | (2,656,035 | ) | ||||
Cash paid for investment in acquisition target and other marketable securities | (23,219 | ) | (84,102 | ) | ||||
Proceeds from sale of investment and divestitures | 301,278 | 98,485 | ||||||
Total investing cash flows from continuing operations | (3,445,037 | ) | (2,768,075 | ) | ||||
Total investing cash flows from discontinued operations | (722 | ) | (1,295 | ) | ||||
Net cash used in investing activities | (3,445,759 | ) | (2,769,370 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 733,028 | 98,415 | ||||||
Payment of dividends | (34,275 | ) | (24,589 | ) | ||||
Purchase of treasury stock | (117,486 | ) | — | |||||
Net increase in borrowings (maturities of 90 days or less) | 647,761 | 846,897 | ||||||
Proceeds from debt borrowings (maturities longer than 90 days) | 493,705 | 757,490 | ||||||
Debt repayments | (10,563 | ) | (459,372 | ) | ||||
Net cash used in financing activities | $ | 1,712,170 | 1,218,841 | |||||
Effect of exchange rate changes on cash and equivalents | 9,112 | 5,537 | ||||||
Net change in cash and equivalents | (78,702 | ) | 2,259 | |||||
Beginning balance of cash and equivalents | 317,810 | 315,551 | ||||||
Ending balance of cash and equivalents | $ | 239,108 | $ | 317,810 | ||||
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.
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DANAHER CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
($ in thousands, unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| 12/31/07 | 12/31/06 | 12/31/07 | 12/31/06 | |||||||||||||
Sales | ||||||||||||||||
Professional Instrumentation | $ | 1,097,511 | $ | 799,247 | $ | 3,537,912 | $ | 2,906,464 | ||||||||
Medical Technologies | 866,311 | 697,386 | 2,997,986 | 2,219,976 | ||||||||||||
Industrial Technologies | 812,436 | 756,914 | 3,153,378 | 2,988,820 | ||||||||||||
Tools & Components | 364,919 | 371,847 | 1,336,641 | 1,350,796 | ||||||||||||
| $ | 3,141,177 | $ | 2,625,394 | $ | 11,025,917 | $ | 9,466,056 | |||||||||
Operating Profit | ||||||||||||||||
Professional Instrumentation | $ | 175,227 | $ | 178,387 | $ | 709,502 | $ | 625,577 | ||||||||
Medical Technologies | 132,863 | 102,088 | 393,230 | 261,604 | ||||||||||||
Industrial Technologies | 132,046 | 123,570 | 532,477 | 467,737 | ||||||||||||
Tools & Components | 43,210 | 54,513 | 175,634 | 194,063 | ||||||||||||
Other | (18,576 | ) | (16,351 | ) | (70,134 | ) | (48,771 | ) | ||||||||
| $ | 464,770 | $ | 442,207 | $ | 1,740,709 | $ | 1,500,210 | |||||||||
Operating Margins | ||||||||||||||||
Professional Instrumentation | 16.0 | % | 22.3 | % | 20.1 | % | 21.5 | % | ||||||||
Medical Technologies | 15.3 | % | 14.6 | % | 13.1 | % | 11.8 | % | ||||||||
Industrial Technologies | 16.3 | % | 16.3 | % | 16.9 | % | 15.7 | % | ||||||||
Tools & Components | 11.8 | % | 14.7 | % | 13.1 | % | 14.4 | % | ||||||||
Total | 14.8 | % | 16.8 | % | 15.8 | % | 15.9 | % | ||||||||
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
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Danaher Corporation
Supplemental Reconciliation of Diluted Earnings Per Share from Continuing Operations (GAAP) to
Adjusted Diluted Earnings Per Share from Continuing Operations (Non-GAAP)
Three Months and Years Ended December 31, 2007 and December 31, 2006
| Three Months Ended | Years Ended | |||||||||||||||||||||
| December 31, 2007 | December 31, 2006 | % Change | December 31, 2007 | December 31, 2006 | % Change | |||||||||||||||||
Earnings from Continuing Operations per GAAP | $ | 320,225 | $ | 320,009 | 0.0 | % | $ | 1,213,998 | $ | 1,109,206 | 9.5 | % | ||||||||||
After-tax gain on indemnity proceeds related to litigation matter ($12.5 million pre-tax) | — | — | (8,110 | ) | — | |||||||||||||||||
After-tax gain on sale of securities acquired in connection with an unsuccessful acquisition bid (First Technology—$14 million pre-tax) | — | — | — | (9,083 | ) | |||||||||||||||||
Gains from net reduction in income tax reserves and discrete tax benefits | (14,562 | ) | (16,800 | ) | (21,084 | ) | (69,473 | ) | ||||||||||||||
After-tax charges related to the acquisition of Tektronix, for purchased in-process research and development and fair value adjustments to recorded inventory and deferred revenue balances ($68.2 Million pre-tax) | 66,000 | — | 66,000 | |||||||||||||||||||
Adjusted Earnings from Continuing Operations (Non-GAAP) | $ | 371,663 | $ | 303,209 | 22.5 | % | $ | 1,250,804 | $ | 1,030,650 | 21.5 | % | ||||||||||
Diluted Earnings Per Share from Continuing Operations per GAAP | $ | 0.97 | $ | 0.99 | -2.0 | % | $ | 3.72 | $ | 3.44 | 8.0 | % | ||||||||||
After-tax gain on indemnity proceeds related to litigation matter ($12.5 million pre-tax) | — | — | $ | (0.02 | ) | — | ||||||||||||||||
After-tax gain on sale of securities acquired in connection with an unsuccessful acquisition bid (First Technology—$14 million pre-tax) | — | — | — | (0.03 | ) | |||||||||||||||||
Gains from net reduction in income tax reserves and discrete tax benefits | (0.05 | ) | (0.05 | ) | (0.07 | ) | (0.21 | ) | ||||||||||||||
After-tax charges related to the acquisition of Tektronix, for purchased in-process research and development and fair value adjustments to recorded inventory and deferred revenue balances ($68.2 Million pre-tax) | 0.20 | 0.20 | ||||||||||||||||||||
Adjusted Diluted Earnings Per Share from Continuing Operations (Non-GAAP) | $ | 1.12 | $ | 0.94 | 19.0 | % | $ | 3.83 | $ | 3.20 | 19.0 | % | ||||||||||
NOTE: In addition to the results provided in this release in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company has provided the non-GAAP measure of adjusted diluted earnings per share from continuing operations (the “non-GAAP measure”) which compares diluted net earnings per share from continuing operations for the three months and year ended December, 2007 to diluted earnings per share from continuing operations for the three months and year ended December 31, 2006 on a basis which:
| • | In the 2007 period, excludes (1) the gain on indemnity proceeds received in connection with a litigation matter, (2) gains related to a net reduction of income tax reserves and discrete tax benefits, and (3) certain non-cash charges related to the acquisition of Tektronix, Inc. for purchased in-process research and development and the fair value adjustments to recorded inventory and deferred revenue balances; and |
| • | In the 2006 period, excludes (1) gains related to a net reduction of income tax reserves and discrete tax benefits, and (2) gains related to the sale of securities acquired in connection with an unsuccessful acquisition bid. |
The non-GAAP measure should be considered in addition to, and not as a replacement for or superior to, diluted net earnings per share calculated according to GAAP. Danaher’s non-GAAP measure may be defined differently than similar non-GAAP measures that are used by other companies.
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Danaher management believes that the non-GAAP measure reflects an additional way of viewing aspects of Danaher’s operations that, when viewed with and reconciled to the corresponding GAAP measure, provide a more complete understanding of Danaher’s current performance and performance compared to previous periods and forecasts, and helps identify underlying trends in Danaher’s business. The gains related to indemnity proceeds, the sale of securities and the net reductions in income tax reserves and discrete tax benefits have been excluded from the non-GAAP measure because items of this nature and size occur with inconsistent frequency and for reasons that may be unrelated to Danaher’s commercial performance during the period. The charges related to the Tektronix acquisition have been excluded because acquisition-related charges of this nature and size occur with inconsistent frequency and we believe are not indicative of Danaher’s ongoing operating costs in a given period.
Danaher management references the non-GAAP measure in assessing current performance and making decisions about internal budgets, resource allocation and financial goals for its business units. Danaher management believes that the non-GAAP measure helps investors and others, if they so choose, in understanding and evaluating Danaher’s current operating performance and future prospects in the same manner as management does. In addition, Danaher believes that analysts and others in the investment community use the non-GAAP measure to assess Danaher’s performance, identify trends in Danaher’s performance and provide estimates of future performance.
A general limitation of the non-GAAP measure is that use of the non-GAAP measure (as compared to the related GAAP measure) may reduce comparability with other companies who may calculate similar non-GAAP measures differently. Another limitation of the non-GAAP measure is that it excludes items of income that affect Danaher’s operations and that may recur in the course of Danaher’s business (though at times and in amounts that may be difficult to predict). Danaher management compensates for these and other limitations of the non-GAAP measure by also considering Danaher’s financial results as determined in accordance with GAAP.
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