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 September 29, 1995
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 October 19, 1995 was
58,483,308 .
DANAHER CORPORATION
INDEX
FORM 10-Q
PART I - FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
at September 29, 1995 and December 31, 1994. . . 1
Consolidated Condensed Statements of
Earnings for the three months and
nine months ended September 29, 1995
and September 30, 1994 . . . . . . . . . . . . . 2
Consolidated Condensed Statements of
Cash Flow for the nine months ended
September 29, 1995 and September 30, 1994 .. . . 3
Notes to Consolidated Condensed
Financial Statements. . . . . . . . . .. . . . . 4
Item 2. Managements's Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . . . . . 5
Liquidity and Capital Resources. . . . . . 5
PART II - OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . .. . . . 6
Item 2. Change in Securities. . . . . . . . . . . 6
Item 3. Defaults Upon Senior Securities . . . .. . 6
Item 4. Submission of matter to a vote
of Security Holders. . . . . . . . . . . . . 6
Item 5. Other Information . . . . . . . . .. . . . . . 6
Item 6. Exhibits and Reports on Form 8-K . .. . . . . . 6
DANAHER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(000's omitted)
September 29, December 31,
1995 1994
(NOTE 1)
ASSETS
Current Assets:
Cash and cash equivalents $ 10,490 $ 1,978
Accounts receivable, net 276,512 193,364
Inventories:
Finished goods 113,511 71,293
Work in process 51,287 33,668
Raw material and supplies 56,380 37,429
--------- ---------
Total inventories 221,178 142,390
Prepaid expenses and other
current assets 44,928 50,955
--------- ---------
Total current assets 553,108 388,687
Property, plant and equipment, net of
depreciation of $174,914 and
$148,596 respectively 325,342 273,076
Other assets 53,408 30,523
Excess of cost over net assets of
acquired companies, net 576,228 442,655
--------- ---------
Total assets $ 1,508,086 $1,134,941
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current
portion of long-term debt $ 140,751 $ 68,771
Accounts payable 111,964 94,609
Accrued expenses 284,220 232,855
--------- --------
Total current liabilities 536,935 396,235
Other liabilities 240,466 146,091
Long-term debt 176,399 116,515
Stockholders' equity:
Common stock - $.01 par value 634 632
Additional paid-in capital 314,746 311,648
Retained earnings 275,087 200,719
Cumulative foreign translation
adjustment 1,308 590
Treasury stock (37,489) (37,489)
--------- -------
Total stockholders' equity 554,286 476,100
Total liabilities and
stockholders' equity $ 1,508,086 $1,134,941
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(000's omitted except per share amounts)
(unaudited)
Quarter Ended Nine Months Ended
Sept. 29, Sept. 30, Sept 29, Sept. 30,
1995 1994 1995 1994
Net revenues $404,516 $326,386 $1,172,512 $ 933,621
Operating costs
and expenses:
Cost of sales 288,136 232,011 840,273 675,930
Selling, general
and administrative
expenses 62,884 51,177 183,791 147,563
Goodwill and other
amortization 3,710 2,421 10,551 7,263
Total operating
costs and expenses 354,730 285,609 1,034,615 830,756
Operating profit 49,786 40,777 137,897 102,865
Interest expense,
net 3,334 2,279 9,750 7,089
Earnings before
income taxes 46,452 38,498 128,147 95,776
Income taxes 17,652 15,400 50,279 38,884
Net earnings $28,800 $23,098 $77,868 $56,892
Per share $.48 $.40 $1.30 $. 98
Average common stock
and equivalent shares
outstanding 59,922,535 58,461,726 59,849,641 58,290,100
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(000's omitted except per share amounts)
(unaudited)
Nine Months Ended
Sept. 29, 1995 Sept. 30, 1994
Cash flows from operating
activities:
Net earnings $ 77,868 $ 56,892
Noncash items, depreciation
and amortization 48,899 31,064
Increase in accounts
receivable ( 49,142) (48,115)
Increase in inventories ( 29,074) (24,147)
Increase in accounts payables 4,111 12,223
Change in other assets and
liabilities 20,230 24,506
Total operating cash flows 72,892 52,423
Cash flows from investing activities:
Cash acquired in acquisitions 22,784 --
Payments for additions to
property, plant and equipment,
net (53,143) (29,287)
Cash paid for acquisitions (165,696) (4,580)
Net cash used in investing
activities (196,055) (33,867)
Cash flow from financing activities:
Proceeds from issuance of
common stock 3,100 901
Borrowings (repayments) of debt 131,864 (2,035)
Payment of dividends (3,500) (2,565)
Net cash provided by
(used in) financing
activities 131,464 (3,699)
Effect of exchange rate changes on
cash 211 17
Net change in cash equivalents 8,512 14,874
Beginning balance of cash and
cash equivalents 1,978 6,767
Ending balance of cash and cash
equivalents $10,490 $21,641
Supplemental disclosures:
Cash interest payments $7,967 $4,758
Cash income tax payments $48,503 $35,725
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 29, 1995
(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 1994
Annual Report on Form 10-K.
In the opinion of the registrant, the accompanying financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position of the
Company at September 29, 1995 and December 31, 1994, its results of
operations for the three months and nine months ended September 29, 1995 and
September 30, 1994, and its cash flows for the nine months ended September
29, 1995 and September 30, 1994.
NOTE 2. ACQUISITION OF JOSLYN CORPORATION
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 Danaher for $34 per share in cash. The remaining
25% is expected to be acquired in late October, 1995. Total consideration
for Joslyn will be approximately $245 million. The fair value of assets to
be acquired is approximately $345 million and approximately $100 million of
liabilities will be assumed. The transaction is being accounted for as a
step acquisition purchase, whereby assets and liabilities are reflected on
a 75% fair value basis and a 25% historical cost basis until the acquisition
is completed. Results of operations reflect a minority interest
elimination. 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 unaudited pro forma information for the periods set forth
below give effect to the transaction as if it had occurred at the beginning
of each period. The pro forma information is presented for information
purposes only and is not necessarily indicative of the results of operations
that actually would have been achieved had the acquisition been consummated
as of that time. Both periods in 1994 include Joslyn's $35 million ($21
million after tax benefit or $0.36 per share) provision for environmental
remediation associated with sites previously owned by Joslyn (unaudited,
000's omitted):
Year Ended Nine Months Ended
December 31, September 29, September 30,
1994 1995 1994
Net Sales $1,504,861 $1,326,297 $1,097,815
Net Earnings 59,696 79,471 37,619
Earnings per share $ 1.02 $1.32 $.65
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net revenues for the 1995 quarter and nine-month period were 23.9% and
25.6% higher compared to the corresponding periods in 1994. Customer demand
was higher in all business segments other than the Transportation segment.
Acquisitions accounted for approximately 20% and 18% of sales growth in the
quarter and the nine-month period.
Gross profit margin for the 1995 third quarter and nine-month period,
as a percentage of sales, was approximately 28.8% and 28.3%, respectively.
For the quarter, gross profit margin is flat between years, and it is up 0.7
percentage points over the nine-month period. Acquisitions make these
periods somewhat noncomparable. However, on a mix-adjusted basis, margins
have increased in all 1995 periods when compared to the 1994 performance due
to productivity improvements combined with increased fixed cost leverage.
Selling, general and administrative expenses for the 1995 third quarter
as a percentage of sales were approximately 0.1 percentage points lower than
the 1994 level. For the 1995 nine-month period, these costs as a percentage
of sales are also lower principally due to restructuring and other cost
reduction actions taken in earlier periods, and the fixed nature of certain
costs.
Interest expense for the 1995 quarter and nine-month period was 46.3%
and 37.5% higher than the 1994 levels due to higher average debt levels,
principally due to acquisitions made in 1994 and the Joslyn acquisition in
September, 1995.
The effective tax rate for both the third quarter and nine-month period
is lower in 1995 than in 1994. This reflects principally the lesser impact
of nondeductible goodwill amortization given higher pretax earnings.
Liquidity and Capital Resources
Total debt increased $110.7 million in the third quarter to $317.2
million. This reflects principally $165 million used to acquire the 75% of
Joslyn Corporation stock tendered to September 1, 1995, as well as net
earnings offset by an increase in net working capital. Increased accounts
receivable were largely related to the consumer hand tool business which had
just entered its peak selling season. The Company anticipates reductions
in working capital levels in the fourth quarter.
The Company's regular quarterly dividend of $.02 per share was declared
for holders of record on September 28, 1995, payable on October 27, 1995.
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
ITEM 1. Legal Proceedings
None
ITEM 2. Change in Securities
None
ITEM 3. Defaults upon Senior Securities
None
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits: (27) Financial Data Schedules
(b) Reports on Form 8-K: September 1, 1995 for Joslyn
Corporation acquisition.
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: October 20, 1995 By: /s/ Patrick W. Allender
Patrick W. Allender
Chief Financial Officer
Date: October 20, 1995 By: /s/ C. Scott Brannan
C. Scott Brannan
Controller