Server: Netscape-Enterprise/2.01
Date: Wed, 17 Dec 1997 23:58:47 GMT
Accept-ranges: bytes
Last-modified: Tue, 04 Nov 1997 16:26:14 GMT
Content-length: 45581
Content-type: text/html
|
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 26, 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.
The number of shares of common stock outstanding at October
20, 1997 was 58,452,152.
DANAHER CORPORATION
INDEX
FORM 10-Q
|
PART 1 |
- FINANCIAL INFORMATION |
Page |
|
Item 1. |
Financial Statements |
|
|
|
Consolidated Condensed Balance Sheets at September 26, 1997 and December
31, 1996 |
1 |
|
|
Consolidated Condensed Statements of Earnings for the three months
and nine months ended September 26, 1997 and September 27, 1996 |
2 |
|
|
Consolidated Condensed Statements of Cash Flow for the nine months
ended September 26, 1997 and September 27, 1996 |
3 |
|
|
Notes to Consolidated Condensed Financial Statements |
4 |
|
Item 2. |
Management's Discussion and Analysis of Financial Condition and Results
of Operations |
6 |
|
|
Liquidity and Capital Resources |
|
PART 2 |
- OTHER INFORMATION |
|
|
Item 1. |
Legal Proceedings |
7 |
|
Item 2. |
Change in Securities |
7 |
|
Item 3. |
Defaults Upon Senior Securities |
7 |
|
Item 4. |
Submission of matters to a vote of Security Holders |
7 |
|
Item 5. |
Other Information |
7 |
|
Item 6. |
Exhibits and Reports on Form 8-K |
7 |
|
DANAHER CORPORATION
CONSOLIDATED CONDENSED
BALANCE SHEETS
(000's omitted)
|
ASSETS
|
September 26, 1997
|
December 31, 1996
(NOTE 1)
|
Current Assets: |
Cash and equivalents |
$ 22,764 |
$ 26,444 |
Accounts receivable, net |
322,066 |
266,668 |
Inventories: |
Finished goods |
97,927 |
88,083 |
Work in process |
50,948 |
49,681 |
Raw material and supplies |
77,213 |
66,472 |
Total inventories |
226,088 |
204,236 |
Prepaid expenses and other
current assets |
52,060 |
49,393 |
Total current assets |
622,978 |
546,741 |
Property, plant and equipment, net
of accumulated depreciation of
$244,487 and $218,830, respectively |
331,790 |
319,606 |
Other assets |
101,810 |
105,903 |
Excess of cost over net assets of
acquired companies, net |
858,233 |
792,824 |
Total assets |
$ 1,914,811
========= |
$ 1,765,074
========= |
LIABILITIES AND STOCKHOLDERS' EQUITY
|
Current Liabilities: |
Notes payable and current
portion of long-term debt |
$ 19,122 |
$ 16,757 |
Accounts payable |
130,374 |
110,194 |
Accrued expenses |
425,523 |
347,622 |
Total current liabilities |
575,019 |
474,573 |
Other liabilities |
269,031 |
270,670 |
Long-term debt |
200,402 |
219,570 |
Stockholders' equity: |
Common stock - $.01 par value |
642 |
642 |
Additional paid-in capital |
335,013 |
333,587 |
Retained earnings |
613,934 |
506,773 |
Cumulative foreign translation
adjustment and other |
(9,789) |
8,858 |
Treasury stock |
(69,441) |
(49,599) |
Total stockholders' equity |
870,359 |
800,261 |
Total liabilities
and
stockholders'
equity |
$ 1,914,811
========= |
$ 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)
|
|
Quarter Ended
|
Nine Months Ended
|
|
September 26,
1997
|
September 27,
1996
|
September 26,
1997
|
September 27,
1996
|
Net revenues |
$ 516,601 |
$ 470,787 |
$ 1,485,831 |
$ 1,315,241 |
Operating costs and expenses: |
Cost of sales |
343,467 |
321,766 |
1,001,153 |
903,939 |
Selling, general and
administrative expenses |
95,851 |
83,266 |
274,383 |
233,072 |
Goodwill and other
amortization |
5,900 |
5,462 |
17,513 |
14,507 |
Total operating
costs and expenses |
445,218 |
410,494 |
1,293,049 |
1,151,518 |
Operating profit |
71,383 |
60,293 |
192,782 |
163,723 |
Interest expense, net |
2,891 |
5,248 |
9,991 |
11,212 |
Earnings from continuing operations before income taxes |
68,492 |
55,045 |
182,791 |
152,511 |
Income taxes |
26,711 |
21,468 |
71,217 |
59,481 |
Earnings from continuing
operations |
41,781
========= |
33,577
========= |
111,574
========= |
93,030
========= |
Gain on sale of discontinued
operations, net of income
taxes of $-0- |
-- |
-- |
-- |
79,811 |
Net earnings |
$ 41,781
========= |
$ 33,577
========= |
$ 111,574
========= |
$ 172,841
========= |
Per share: |
From continuing operations |
$ .69 |
$ .56 |
$ 1.85 |
$ 1.55 |
From discontinued operations |
- |
- |
- |
1.33 |
Net earnings |
$ .69 |
$ .56 |
$ 1.85 |
$ 2.88 |
Average common stock and
equivalent shares
outstanding |
60,242,750
========= |
60,045,807
========= |
60,216,738
========= |
59,970,139
========= |
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(000's omitted)
(unaudited)
|
|
|
Nine Months Ended
|
|
|
September 26, 1997
|
September 27, 1996
|
Cash flows from operating activities: |
|
Net earnings from operations |
$ 111,574 |
$ 93,030 |
|
Noncash items, depreciation and amortization |
56,769 |
51,325 |
|
Increase in accounts receivable |
(42,199) |
(44,174) |
|
(Increase) decrease in inventories |
(441) |
9,147 |
|
Increase in accounts payable |
14,390 |
11,466 |
|
Change in other assets and liabilities |
80,338 |
26,085 |
|
Total operating cash flows |
220,431 |
146,879 |
Cash flows from investing activities: |
|
Sale of Fayette Tubular Products |
-- |
155,000 |
|
Payments for additions to property,
plant, and equipment, net |
(36,994) |
(38,731) |
|
Cash paid for acquisitions |
(147,238) |
(235,503) |
|
Net cash provided by (used in)
investing activities |
(184,232) |
(119,234) |
Cash flows from financing activities: |
|
Acquisition of treasury stock |
(19,842) |
(12,110) |
|
Proceeds from issuance of common stock |
1,426 |
1,796 |
|
Repayment of debt |
(16,803) |
534 |
|
Payment of dividends |
(4,413) |
(3,772) |
|
Net cash used in financing activities |
(39,632) |
(13,562) |
|
|
Effect of exchange rate changes on cash |
(247) |
(82) |
Net change in cash and equivalents |
(3,680) |
14,011 |
Beginning balance of cash and cash equivalents |
26,444 |
7,938 |
Ending balance of cash and cash equivalents |
$ 22,764 ========= |
$ 21,949 ========= |
Supplemental disclosures: |
|
Cash interest payments |
$ 9,584 ========= |
$ 11,659 ========= |
|
Cash income tax payments |
$ 49,441 ========= |
$ 52,588 ========= |
See notes to consolidated condensed financial statements.
DANAHER CORPORATION
NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
(unaudited)
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 adjustments) necessary to present fairly the financial position
of the Company at September 26, 1997 and December 31, 1996, its results
of operations for the three months and nine months ended September 26,
1997 and September 27, 1996, and its cash flows for the nine months ended
September 26, 1997 and September 27, 1996.
NOTE 2. |
|
ACQUISITION OF ACME-CLEVELAND CORPORATION |
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
was approximately $240 million and approximately $40 million of liabilities
were 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 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
December 31, 1996 |
Nine Months Ended
September 27, 1996 |
Net Sales |
$ 1,885,700 |
$ 1,389,063 |
Net Earnings |
129,197 |
94,268 |
Earnings per Share |
$
2.15 |
$
1.57 |
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.
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 1997 earnings per share would be as shown below.
|
Year
|
Nine Months
|
Quarter
|
|
1996
|
1997
|
1996
|
1997
|
1996
|
Average shares outstanding
(basic earnings per share) |
58,623,470
|
58,804,608
|
58,510,944
|
58,639,603
|
58,616,627
|
Stock option equivalents |
1,331,166
|
1,412,130
|
1,459,195
|
1,603,147
|
1,429,180
|
Average shares and
equivalents (diluted
earnings per share) |
59,954,636
=========
|
60,216,738
=========
|
59,970,139
=========
|
60,242,750
=========
|
60,045,807
=========
|
Continuing operations- |
Basic earnings per share |
$2.18
|
$1.90
|
$1.59
|
$.71
|
$.57
|
Diluted earnings per share |
$2.13
|
$1.85
|
$1.55
|
$.69
|
$.56
|
NOTE 6. |
|
TENDER OFFER FOR EXIDE ELECTRONICS GROUP, INC. |
On July 10, 1997, the Company proposed
to acquire all outstanding shares of Exide Electronics Group, Inc. for
approximately $230 million in a merger transaction whereby Exide Electronics
Group, Inc. shareholders would receive $20 per share in cash. If
the merger is completed, which remains uncertain as of the date of this
quarterly report, the Exide Electronics Group, Inc. businesses would be
an addition to the Company's Process/ Environmental Controls business segment.
ITEM 2. |
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
|
Results of Operations
Net revenues for the 1997 quarter and nine-month period
were 10% and 13% higher compared to the corresponding periods in 1996.
Customer demand was higher in all business segments. Acquisitions
accounted for approximately 4% and 8% of sales growth in the quarter and
the nine-month period.
Gross profit margins for the 1997 third quarter and nine-month
period, as a percentage of sales, were approximately 33.5% and 32.6%, respectively.
For the quarter and nine-month period, gross profit margins are up 1.8
and 1.3 percentage points because the acquired companies provide a higher
gross margin and productivity improvements within the existing business
units were experienced.
Selling, general and administrative expenses for the 1997
third quarter as a percentage of sales were approximately 0.9 percentage
points higher than the 1996 level. For the 1997 nine-month period,
these costs as a percentage of sales are also higher principally due to
the higher overall selling expense structure of the acquired businesses.
Interest expense for the 1997 quarter and nine-month period
was 45% and 11% less than the 1996 levels due to lower average debt levels,
principally due to strong operating cash flows.
The effective tax rate is identical for all 1997 and 1996
periods.
Liquidity and Capital Resources
Total debt increased $3.8 million from
the second quarter to $219.5 million. This reflects funds expended
for the acquisition of Gems Sensors, offset by strong operating cash
flows. The Company anticipates reductions in working capital levels
in the fourth quarter.
The Company's regular quarterly dividend of $.025
per share was declared for holders of record on September 26, 1997 payable
on October 31, 1997.
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 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: 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: |
October 21, 1997 |
|
By: |
/s/ Patrick W. Allender |
|
Patrick W. Allender
Chief Financial Officer |
|
Date: |
October 21, 1997 |
|
By: |
/s/ C. Scott Brannan |
|
C. Scott Brannan
Controller |
|