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 March 28, 1997
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 April 17, 1997 was
58,922,117.
DANAHER CORPORATION
INDEX
FORM 10-Q
PART I - FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
at March 28, 1997 and December 31, 1996 1
Consolidated Condensed Statements of
Earnings for the three months ended
March 28, 1997 and March 29, 1996 2
Consolidated Condensed Statements of
Cash Flows for the three months ended
March 28, 1997 and March 29, 1996 3
Notes to Consolidated Condensed
Financial Statements 4-5
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations 6-7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
(27) Financial Data Schedules
DANAHER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(000's omitted)
March 28, December 31,
1997 1996
(unaudited) (NOTE 1)
ASSETS
Current Assets:
Cash and equivalents $ 38,554 $ 26,444
Accounts receivable, net 280,991 266,668
Inventories:
Finished goods 97,856 88,083
Work in process 46,433 49,681
Raw material and supplies 74,348 66,472
Total inventories 218,637 204,236
Prepaid expenses and other
current assets 40,104 49,393
Total current assets 578,286 546,741
Property, plant and equipment, net
of accumulated depreciation of
$230,975 and $218,830, respectively 324,850 319,606
Other assets 100,343 105,903
Excess of cost over net assets of
acquired companies, net 791,179 792,824
Total assets $1,794,658 $1,765,074
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current
portion of long-term debt $ 18,464 $ 16,757
Accounts payable 119,458 110,194
Accrued expenses 379,161 347,622
Total current liabilities 517,083 474,573
Other liabilities 269,212 270,670
Long-term debt 190,900 219,570
Stockholders' equity:
Common stock - $.01 par value 642 642
Additional paid-in capital 334,398 333,587
Retained earnings 536,838 506,773
Cumulative foreign translation
adjustment and other (4,816) 8,858
Treasury stock (49,599) (49,599)
Total stockholders' equity 817,463 800,261
Total liabilities and
stockholders' equity $1,794,658 $1,765,074
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(000's omitted except per share amounts)
(unaudited)
Three Months Ended
March 28, March 29,
1997 1996
Net sales $ 466,441 $ 409,557
Cost of sales 318,961 285,264
Selling, general and
administrative expenses 86,266 72,872
Goodwill and other amortization 5,757 4,293
Total operating expenses 410,984 362,429
Operating profit 55,457 47,128
Interest expense, net 3,864 2,983
Earnings from continuing operations
before income taxes 51,593 44,145
Income taxes 20,058 17,217
Earnings from continuing operations 31,535 26,928
Gain on sale of discontinued operations,
net of income taxes of $-0- -- 79,811
Net earnings $ 31,535 $ 106,739
Per share:
Continuing operations $ .52 $ .45
Discontinued operations - 1.34
Net earnings $ .52 $1.79
Average common stock and common
equivalent shares outstanding 60,378,418 59,680,406
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(000's omitted)
(unaudited)
Three Months Ended
March 28, March 29,
1997 1996
Cash flows from operating activities:
Net earnings from operations $ 31,535 $ 26,928
Noncash items, depreciation and
amortization 18,930 16,818
Increase in accounts receivable (14,767) (22,075)
Increase in inventories (5,303) (785)
Increase in accounts payable1 2,427 4,071
Change in other assets and liabilities 38,582 9,566
Total operating cash flows 81,404 34,523
Cash flows from investing activities:
Sale of Fayette Tubular Products -- 155,000
Payments for additions to property,
plant, and equipment, net (7,687) (12,107)
Cash paid for acquisitions (33,311) (25,073)
Net cash provided by (used in)
investing activities (40,998) 117,820
Cash flows from financing activities:
Acquisition of treasury stock -- (12,110)
Proceeds from issuance of common stock 811 726
Dividends paid (1,470) (1,163)
Repayment of debt (26,963) (131,842)
Net cash used in financing activities (27,622) (144,389)
Effect of exchange rate changes on cash (674) (25)
Net change in cash and equivalents 12,110 7,929
Beginning balance of cash equivalents 26,444 7,938
Ending balance of cash equivalents $ 38,554 $ 15,867
Supplemental disclosures:
Cash interest payments $ 1,375 $ 1,551
Cash income tax payments $ 1,780 $ 16,180
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
(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 1996 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 March 28, 1997 and December 31, 1996, its results of
operations for the three months ended March 28, 1997 and March 29, 1996,
and its cash flows for the three months ended March 28, 1997 and
March 29, 1996.
NOTE 2. ACQUISITION OF ACME-CLEVELAND CORPORATION
The Company obtained control of Acme-Cleveland Corporation as of
July 2, 1996. Total consideration was approximately $200 million. The
fair value of assets acquired were approximately $240 million and
approximately $40 million of liabilities was assumed. The transaction
is being 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 unaudited pro forma information for the period set forth below
gives effect to the transaction as if it had occurred at the beginning of
each period. The pro forma information is presented for informational
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 except
per share amounts):
Year Ended Quarter Ended
December 31, March 29,
1996 1996
Net Sales $ 1,885,700 $ 444,726
Net Earnings 129,197 27,497
Earnings per
Share $2.15 $ .46
NOTE 3. DISCONTINUED OPERATIONS
In January, 1996, the Company sold its Fayette Tubular Products
(Fayette) subsidiary for $155 million in cash. A gain of $79.8 million
was recognized in the first quarter of 1996.
NOTE 4. NONRECURRING TRANSACTIONS
The Company sold its investment in Tylan General Corporation and
recognized a gain of approximately $3.5 million before income taxes in
the first quarter of 1997. This was offset by a charge to close facilities
within the Hengstler subsidiary and relocate work to an existing company
facility.
NOTE 5. EARNINGS PER SHARE
Statement of Financial Accounting Standards Number 128 will change
the reporting of earnings per share effective in the fourth quarter of
1997. Basic earnings per share will not include stock options as common
stock equivalents and will be higher than previously reported primary
earnings per share. Diluted earnings per share will equal previously
reported primary earnings per share under the Company's current capital
structure. The pro-forma impact on previously reported 1996 and first
quarter 1997 earnings per share would be as shown below.
Year First Quarter
1996 1997 1996
Average shares outstanding 58,623,470 59,116,974 58,380,081
(basic earnings per share)
Stock option equivalents 1,331,166 1,261,444 1,300,325
Average shares and equivalents 59,954,636 60,378,418 59,680,406
(diluted earnings per share)
Continuing operations-
Basic earnings per share $2.18 $.53 $.46
Diluted earnings per share $2.13 $.52 $.45
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net Sales for the first quarter of 1997 of $466.4 million were 14%
higher than the 1996 quarter. Sales were higher in both business segments.
Of this increase, acquisitions accounted for approximately 10% and
companies included in both periods accounted for 4%. Increases in the
volume of shipments in all business segments provided this growth.
Gross profit margin for the first quarter of 1997, as a percentage of
sales, was 31.6%, which represents a 1.3 percentage point increase from
1996 levels. This results both from 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 1997 first
quarter were 18% higher than in 1996 because of higher sales levels. As a
percentage of sales, these costs increased to 18.5% from 17.8% in 1996, as
a result of the acquired businesses which have a higher overall selling
expense structure than the existing business units.
Interest expense of $3,864,000 in 1997 was higher than the
corresponding 1996 period. Total debt levels were higher in 1997,
reflecting the acquisitions made in 1996.
The 1997 effective tax rate of 39.0% is identical to the 1996
effective rate.
Liquidity and Capital Resources
During the first quarter of 1997, the Company experienced increases in
accounts receivable, inventory, and accounts payable. This is principally
due to the lower activity levels experienced in the last weeks of the 1996
year due to the holiday season. Total debt under the Company's borrowing
facilities decreased to $209.4 million at March 28, 1997, compared to
$236.3 million at December 31, 1996, due to the earnings for the quarter
and proceeds from the sale of securities (see Note 4) offset principally
by funds expended for acquisitions.
The Company declared a regular quarterly dividend of $.025 per share
payable on April 25, 1997, to holders of record on March 21, 1997.
The Company's cash provided from operations, as well as credit
facilities available, should provide sufficient available funds to meet
normal working capital requirements, capital expenditures, dividends,
scheduled debt repayments, and to fund acquisitions, if applicable.
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: 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: April 17, 1997 By:/s/ Patrick W. Allender
Patrick W. Allender
Chief Financial Officer
Date: April 17, 1997 By:/s/ C. Scott Brannan
C. Scott Brannan
Controller