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 July 1, 1994
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 July 20, 1994 was
28,562,941.
DANAHER CORPORATION
INDEX
FORM 10-Q
PART I - FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
at July 1, 1994 and December 31, 1993 3
Consolidated Condensed Statements of
Earnings for the three months and
six months ended July 1, 1994 and
July 2, 1993 4
Consolidated Condensed Statements of
Cash Flow for the six months ended
July 1, 1994 and July 2, 1993 5
Notes to Consolidated Condensed
Financial Statements 6
Item 2. Managements's Discussion and
Analysis of Financial Condition
and Results of Operations 8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
DANAHER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(000's omitted)
July 1, December 31,
1994 1993
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $16,917 $ 6,767
Accounts receivable, net 161,991 135,445
Inventories:
Finished goods 83,125 59,916
Work in process 21,906 19,900
Raw material and supplies 29,489 27,753
Total inventories 134,520 107,569
Prepaid expenses and other
current assets 29,791 27,982
Total current assets 343,219 277,763
Property, plant and equipment, net of
depreciation of $139,137 and $122,634
respectively 243,092 235,666
Other assets 20,859 21,477
Excess of cost over net assets of
acquired companies, net 337,661 337,566
Total assets $944,831 $872,472
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 335 $ 2,235
Accounts payable 87,376 72,445
Accrued expenses 183,084 160,685
Total current liabilities 270,795 235,365
Other liabilities 140,946 142,091
Long-term debt 131,350 131,350
Stockholders' equity:
Common stock - $.01 par value 310 309
Additional paid-in capital 283,933 279,532
Retained earnings 155,178 123,095
Cumulative foreign translation
adjustment (192) (1,781)
Treasury Stock (37,489) (37,489)
Total stockholders' equity 401,740 363,666
Total liabilities and
Stockholders' equity $944,831 $872,472
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(000's omitted except per share amounts)
(unaudited)
Quarter Ended Six Months Ended
July 1, July 2, July 1, July 2,
1994 1993 1994 1993
Net revenues $318,082 $258,902 $607,235 $507,286
Operating costs and expenses:
Cost of sales 230,465 190,107 443,919 374,592
Selling, general and
administrative expenses 50,164 41,534 96,386 83,181
Goodwill and other amort-
ization 2,421 2,358 4,842 4,701
Total operating costs and
expenses 283,050 233,999 545,147 462,474
Operating profit 35,032 24,903 62,088 44,812
Interest expense, net 2,378 2,841 4,810 5,362
Earnings before income taxes
and cumulative effect of
accounting change 32,654 22,062 57,278 39,450
Income taxes 13,388 9,267 23,484 16,570
Earnings before cumulative
effect of accounting
change $ 19,266 $12,795 $ 33,794 $ 22,880
Cumulative effect of
accounting change (net
of tax benefit of $20,000) - - - (36,000)
Net earnings $ 19,266 $12,795 $ 33,794 $(13,120)
Per share:
Before accounting change $ .66 $ .44 $ 1.16 $ .79
Accounting change - - - (1.25)
Net earnings $ .66 $ .44 $ 1.16 $ (.46)
Average common stock and
common equivalent shares
outstanding 29,132,571 28,793,831 29,101,888 28,793,535
See note to consolidated financial statements.
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(000's omitted)
(unaudited)
Six Months Ended
July 1, July 2,
1994 1993
Cash flows from operating activities:
Earnings before cumulative effect
of accounting change $ 33,794 $ 22,880
Noncash items, depreciation and
amortization 20,852 21,985
Increase in accounts receivable (24,009) (9,769)
Increase in inventories (24,315) (13,533)
Increase in accounts payable 13,001 5,589
Change in other assets and liabilities 18,808 10,946
Total operating cash flows 38,131 38,098
Cash flows from investing activities:
Payments for additions to property,
plant, and equipment, net (20,616) (20,423)
Cash paid for acquisitions (4,580) (33,000)
Net cash used in investing activities (25,196) (53,423)
Cash flows from financing activities:
Proceeds from issuance of common stock 582 733
Borrowings (repayments) of debt (1,900) (1,975)
Payment of dividends (1,708) (851)
Proceeds from notes payable - 30,000
Debt issuance expenditures - (160)
Net cash provided by (used in)
financing activities (3,026) 27,747
Effect of exchange rate changes on cash 241 1,242
Net change in cash and marketable securities 10,150 13,664
Beginning balance of cash and marketable
securities 6,767 1,691
Ending balance of cash and marketable
securities $ 16,917 $ 15,355
Supplemental disclosures:
Cash interest payments $ 4,725 $ 4,540
Cash income tax payments $ 21,532 $ 17,976
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JULY 1, 1994
(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 1993
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 July 1, 1994 and December 31, 1993, its results of operations for the
three months and six months ended July 1, 1994 and July 2, 1993, and its
cash flows for the six months ended July 1, 1994 and July 2, 1993.
NOTE 2. CHANGES IN ACCOUNTING PRINCIPLES
As of January 1, 1993, the Company changed its method of
accounting for post retirement benefits from recognizing expense as claims
are paid to the accrual method specified by SFAS No. 106. The Company
elected to recognize this liability immediately and its adoption is not
expected to significantly impact the Company's ongoing results of
operations. The Company also adopted the liability method of accounting
for income taxes specified by SFAS No. 109. Its adoption had no impact on
the results of operations and resulted in certain reclassification to the
Company's balance sheet.
NOTE 3. NONRECURRING TRANSACTIONS
Pursuant to a definitive agreement to acquire Mark Controls
Corporation, the Company received a $2 million fee plus reimbursement of
its costs and expenses when Mark Controls was acquired by another entity at
a higher price. The $2 million fee was recognized as revenue in the second
quarter. This was offset by a charge to close a manufacturing plant in
North Chicago, Illinois and relocate work performed there to an existing
Company facility.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the 1994 quarter were 22.9% higher than the 1993
quarter. Net sales for the six-month period were 19.7% higher than the
corresponding period in 1993. This is principally due to higher customer
demand in all segments, with acquisition activity accounting for
approximately 6% of sales growth in each period.
Gross profit margin in 1994, as a percentage of sales, was
approximately 27.5% for the quarter and 26.9% for the six-month period, an
increase of 3.4% and 2.7%, respectively, from 1993 levels. The gross
margin increase was attributable to productivity improvements combined with
increased fixed cost leverage on a higher sales base.
Selling, general and administrative expenses for the 1994 quarter and
six-month period increased in total dollars principally due to the higher
volume levels. Selling general and administrative expenses as a percentage
of sales was 15.8% for the 1994 quarter and 15.9% for the 1994 six month
period. This represents a decrease of 1.2% and 3.0%, respectively, from
prior periods. This reflects the benefit of restructuring and other cost
reduction actions taken in earlier periods, and the fixed nature of certain
costs.
Interest expense for the quarter and six-month period was 16.3% and
10.3% lower than the 1993 levels, due to lower average debt levels.
The effective tax rate for both the second quarter and six-month
periods is lower in 1994 than in 1993. This reflects principally the
lesser impact of nondeductible goodwill amortization given higher pretax
earnings.
The Company adopted new accounting principles in January, 1993. See
Note 2 for a discussion for their initial and ongoing impact.
Liquidity and Capital Resources
Since December 31, 1993, the Company has experienced increases in
accounts receivable, inventory and accounts payable. This is due to the
lower activity levels experienced in the last weeks of 1993 caused by the
holiday season. Total debt decreased to $131,685 at July 1, 1994,
primarily as a result of the strong operating performance.
A regular quarterly dividend of $.03 per share was declared, payable
on July 29, 1994 to holders of record on June 24, 1994.
The Company's cash provided from operations, as well as credit
facilities available, should provide sufficient available funds to meet
anticipated working capital requirements, capital expenditures, dividends
and scheduled debt repayments.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None.
(b) Reports on Form 8-K: None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DANAHER CORPORATION:
Date: July 21, 1994 By: /s/ Patrick W. Allender
Patrick W. Allender
Chief Financial Officer
Date: July 21, 1994 By: /s/ C. Scott Brannan
C. Scott Brannan
Controller