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.
The number of shares of common stock outstanding at April 17, 1997 was 58,922,117.
DANAHER CORPORATION
INDEX
FORM 10-Q
|
PART 1 |
- 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 2 |
- OTHER INFORMATION |
|
|
Item 6. |
Exhibits and Reports on Form 8-K (27) Financial Data Schedules |
7 |
DANAHER CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(000's omitted)
|
ASSETS |
March 28, 1997 (unaudited) |
December 31, 1996 (NOTE 1) |
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, 1997 | March 29, 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, 1997 | March 29, 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 payable | 12,427 | 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)
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 December 31, 1996 | Quarter Ended March 29, 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 (basic earnings per share) | 58,623,470 | 59,116,974 | 58,380,081 |
Stock option equivalents | 1,331,166 | 1,261,444 | 1,300,325 |
Average shares and equivalents (diluted earnings per share) | 59,954,636 ========= | 60,378,418 ========= | 59,680,406 ========= |
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
|
|