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 June 28, 1996
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 17, 1996 was 58,407,522.
DANAHER CORPORATION
INDEX
FORM 10-Q
PART I - FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Consolidated Condensed Balance Sheet
at June 28, 1996 and December 31, 1995 3
Consolidated Condensed Statements of
Earnings for the three months and
six months ended June 28, 1996 and
June 30, 1995 4
Consolidated Condensed Statements of
Cash Flow for the six months ended
June 28, 1996 and June 30, 1995 5
Notes to Consolidated Condensed
Financial Statements 6
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 7
PART II - OTHER INFORMATION
Item 6. (a) Exhibits: 8
(27) Financial Data Schedules
(b) Reports on Form 8-K:4/23/96,
4/25/96, 7/3/96
DANAHER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(000's omitted)
June 28, December 31,
1996 1995
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 9,169 $ 7,938
Accounts receivable, net 262,176 224,652
Inventories:
Finished goods 98,825 89,932
Work in process 43,041 51,904
Raw material and supplies 57,677 60,054
Total inventories 199,543 201,890
Prepaid expenses and other 43,194 31,990
current assets
Total current assets 514,082 466,470
Property, plant and equipment,
net of depreciation of
$196,145 and $168,566,
respectively 290,653 291,937
Other assets 90,666 119,444
Excess of cost over net
assets of acquired
companies, net 626,080 608,140
Total assets $1,521,481 $1,485,991
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current
portion of long-term debt $ 15,219 $ 14,970
Accounts payable 102,178 92,290
Accrued expenses 355,905 296,878
Total current liabilities 473,302 404,138
Other liabilities 204,439 226,925
Long-term debt 124,970 268,617
Stockholders' equity:
Common stock-$.01 par value 637 634
Additional paid-in capital 325,555 315,205
Retained earnings 441,304 304,363
Cumulative foreign
translation adjustment 873 3,598
Treasury Stock (49,599) (37,489)
Total stockholders' equity 718,770 586,311
Total liabilities and
stockholders' equity $ 1,521,481 $ 1,485,991
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
June 28, June 30, June 28, June 30,
1996 1995 1996 1995
Net revenues $ 434,897 $ 351,891 $844,454 $687,873
Operating costs
and expenses:
Cost of sales 296,909 243,924 582,173 483,199
Selling, general
and administra-
tive expenses 76,934 58,942 149,806 115,474
Goodwill and other
amortization 4,752 3,316 9,045 6,653
Total operating
costs and
expenses 378,595 306,182 741,024 605,326
Operating profit 56,302 45,709 103,430 82,547
Interest expense,
net 2,981 1,292 5,964 2,516
Earnings from
continuing operations
before income
taxes 53,321 44,417 97,466 80,031
Income taxes 20,796 17,777 38,013 31,979
Earnings from
continuing
operations $ 32,525 $ 26,640 $59,453 $ 48,052
Earnings from
discontinued
operations, net
of taxes of $ -0-,
$371, $ -0-,
and $650 - 580 79,811 1,016
Net Earnings $ 32,525 $ 27,220 $139,264 $ 49,068
Per Share:
From continuing
operations $ .54 $ .44 $ .99 $ .80
From discontinued
operations - .01 1.34 .02
Net earnings $ .54 $ .45 $2.33 $ .82
Average common stock
and equivalent
shares out-
standing 59,932,305 59,854,847 59,806,356 59,813,194
See notes to consolidated condensed financial
statements.
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(000's omitted)
(unaudited)
Six Months Ended
June 28, June 30,
1996 1995
Cash flows from operating activities:
Net earnings from operations $ 59,453 $ 49,068
Noncash items, depreciation
and amortization 33,033 33,989
Increase in accounts
receivable (31,382) (37,629)
(Increase) decrease in
inventories 7,199 (35,411)
Increase in accounts payable 8,847 9,601
Change in other assets and
liabilities (14,542) 8,717
Total operating cash flows 62,608 28,335
Cash flows from investing activities:
Sale of Fayette Tubular
Products 155,000 --
Payments for additions to
property, plant, and
equipment, net (21,130) (30,086)
Cash paid for acquisitions (37,701) --
Net cash provided by
(used in)investing
activities 96,169 (30,086)
Cash flows from financing activities:
Acquisition of treasury stock (12,110) --
Proceeds from issuance of
common stock 1,470 2,918
Borrowings (repayments)
of debt (144,545) 19,175
Payment of dividends (2,333) (2,334)
Net cash provided by
(used in)financing
activities (157,518) 19,759
Effect of exchange rate changes
on cash (28) 588
Net change in cash and cash
equivalents 1,231 18,596
Beginning balance of cash and
cash equivalents 7,938 1,978
Ending balance of cash and
cash equivalents $ 9,169 $ 20,574
Supplemental disclosures:
Cash interest payments $ 6,631 $ 6,235
Cash income tax payments $ 47,546 $ 38,120
See notes to consolidated condensed financial
statements.
DANAHER CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 28, 1996
(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 1995 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 June 28, 1996 and December
31, 1995, its results of operations for the three
months and six months ended June 28, 1996 and June 30,
1995, and its cash flows for the six months ended June
28, 1996 and June 30, 1995.
NOTE 2. ACQUISITIONS OF JOSLYN CORPORATION AND ACME-
CLEVELAND 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% was acquired on October 31,
1995. Total consideration for Joslyn was
approximately $245 million. The fair value of assets
acquired is approximately $345 million and
approximately $100 million of liabilities were assumed.
The transaction was accounted for as a purchase. 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 Company obtained control of Acme-
Cleveland Corporation (Acme) as of July 2, 1996. Total
consideration for Acme was approximately $200 million.
The fair value of assets acquired is approximately $240
million and approximately $40 million of liabilities
were assumed. The transaction is being accounted for
as a purchase and hence is not included in the
financial statements as of June 28, 1996.
The unaudited pro forma information for the
period set forth below give effect to the transactions
as if they 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 (unaudited, 000's omitted):
Year Ended Six Months Ended Six MonthsEnded
December 31, June 30, June 28,
1995 1995 1996
Net Sales $ 1,767,154 $ 865,513 $ 918,276
Net Earnings 111,838 48,439 60,691
Earnings per $ 1.87 $ .81 $ 1.01
Share
NOTE 3. DISCONTINUED OPERATIONS
In January, 1996, the Company sold its
Fayette Tubular Products subsidiary for $155 million
cash. A gain of $79.8 million was recognized in the
first quarter of 1996. As the company no longer
operates in the transportation business segment,
amounts for 1995 have been restated to reflect Fayette
as a discontinued operation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the 1996 quarter were 24%
higher than the 1995 quarter. Net sales for the
six-month period were 23% higher than the corresponding
period in 1995. This is principally due to continued
increases in market share in all segments, with
acquisition activity accounting for approximately 21%
and 20% of sales growth in the quarter and six-month
periods. On a comparable company basis, North American
sales were stronger, growing 6% excluding Jacobs
Vehicle Equipment Company which was adversely impacted
by the expected decline in the heavy duty truck market.
Gross profit margin in 1996, as a percentage
of sales, was approximately 31.7% for the quarter and
31.1% for the six-month period, an increase of 1.0 and
1.3 percentage points, respectively, from 1995 levels.
The gross margin increase was attributable to both 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 1996 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 17.7% for the 1996 quarter
and the six month period. This represents an increase
of .9 percentage points from prior periods. This
reflects principally the impact of the acquired
businesses which have a higher overall selling expense
structure than the existing business units.
Interest expense for the quarter and
six-month period was $2.7 million and $2.4 million
higher than the 1995 levels, due to higher average debt
levels, principally due to acquisitions made in 1995.
The effective tax rate for both the second
quarter and six-month periods is lower in 1996 than in
1995. This reflects principally the lesser impact of
nondeductible goodwill amortization given higher pretax
earnings and a lower income tax expense for certain
foreign operations.
Liquidity and Capital Resources
Since December 31, 1995, the Company has
experienced increases in accounts receivable and
accounts payable. This is due to the lower activity
levels experienced in the last weeks of 1995 caused by
the holiday season. Total debt decreased to $140.2
million at June 28, 1996, primarily as a result of the
proceeds from the Fayette disposition and strong
operating performance, offset by the acquisition of
treasury stock, cash paid for acquisitions, and the
increase in working capital discussed above.
A regular quarterly dividend of $.02 share
was declared, payable on July 26, 1996 to holders of
record on June 27, 1996.
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,
acquisitions, dividends and scheduled debt repayments.
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: 4/23/96, 4/25/96, 7/3/96
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 17, 1996 By: /s/ Patrick W. Allender
Patrick W. Allender
Chief Financial Officer
Date: July 17, 1996 By: /s/ C. Scott Brannan
C. Scott Brannan
Controller