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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. 

Yes   X  No  
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
    6
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)

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 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 


 
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