-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SLiMILQa9o9z4aalmepaC7NnP7gQ4pABgJeSiP/naiYi2S5+vamaNU/crMfmAuKV s8iBDheVG+6Mt85R+KH5xA== 0000313616-99-000004.txt : 19990423 0000313616-99-000004.hdr.sgml : 19990423 ACCESSION NUMBER: 0000313616-99-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990402 FILED AS OF DATE: 19990422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DANAHER CORP /DE/ CENTRAL INDEX KEY: 0000313616 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 591995548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08089 FILM NUMBER: 99598606 BUSINESS ADDRESS: STREET 1: 1250 24TH ST NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 BUSINESS PHONE: 2028280850 MAIL ADDRESS: STREET 1: 1250 24TH STREET NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 FORMER COMPANY: FORMER CONFORMED NAME: DMG INC DATE OF NAME CHANGE: 19850221 10-Q 1 FORM 10Q 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 April 2, 1999 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 22, 1999 was 135,408,036. DANAHER CORPORATION INDEX FORM 10-Q PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Condensed Balance Sheets at April 2, 1999 and December 31, 1998 1 Consolidated Condensed Statements of Earnings for the three months ended April 2, 1999 and March 27, 1998 2 Consolidated Condensed Statements of Cash Flows for the three months ended April 2, 1999 and March 27, 1998 3 Notes to Consolidated Condensed Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5-6 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 6 (27) Financial Data Schedules DANAHER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (000's omitted) April 2, December 31, 1999 1998 (unaudited) (NOTE 1) ASSETS Current Assets: Cash and equivalents $ 68,176 $ 41,923 Accounts receivable, net 442,119 467,108 Inventories: Finished goods 126,266 122,141 Work in process 74,391 74,385 Raw material and supplies 124,428 126,960 Total inventories 325,085 323,486 Prepaid expenses and other current assets 54,606 54,387 Total current assets 889,986 886,904 Property, plant and equipment, net of accumulated depreciation of $455,474 and $441,593, respectively 462,802 471,025 Other assets 131,635 96,213 Excess of cost over net assets of acquired companies, net 1,261,741 1,284,573 Total assets $2,746,164 $2,738,715 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable and current portion of long-term debt $ 53,925 $ 59,639 Accounts payable 173,701 158,596 Accrued expenses 496,644 470,470 Total current liabilities 724,270 688,705 Other liabilities 282,978 285,261 Long-term debt 347,480 412,918 Stockholders' equity: Common stock - $.01 par value 1,469 1,467 Additional paid-in capital 379,980 374,412 Retained earnings 1,031,789 978,655 Accumulated other comprehensive income (21,802) (2,703) Total stockholders' equity 1,391,436 1,351,831 Total liabilities and stockholders' equity $2,746,164 $2,738,715 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 April 2, March 27, 1999 1998 Net sales $ 754,590 $ 646,240 Cost of sales 479,441 418,094 Selling, general and administrative expenses 170,041 147,733 Goodwill and other amortization 9,168 6,399 Total operating expenses 658,650 572,226 Operating profit 95,940 74,014 Interest expense, net 6,251 3,197 Earnings from continuing operations before income taxes 89,689 70,817 Income taxes 34,530 26,614 Net earnings $ 55,159 $ 44,203 Basic earnings per share $ .41 $ .33 Average common stock outstanding 135,638 134,032 Diluted earnings per share $ .39 $ .32 Average common stock and common equivalent shares outstanding 139,889 138,247 See notes to consolidated condensed financial statements. DANAHER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (000's omitted) (unaudited) Three Months Ended April 2, March 27, 1999 1998 Cash flows from operating activities: Net earnings from operations $ 55,159 $ 44,203 Noncash items, depreciation and amortization 30,551 23,205 (Increase) decrease in accounts receivable 21,671 2,530 Increase in inventories (2,238) (6,814) Increase in accounts payable 14,792 14,210 Change in other assets and liabilities (15,258) 43,857 Total operating cash flows 104,677 121,191 Cash flows from investing activities: Payments for additions to property, plant, and equipment, net (12,152) (16,905) Cash paid for acquisitions - (375,441) Net cash provided by (used in) investing activities (12,152) (392,346) Cash flows from financing activities: Proceeds from issuance of common stock 5,570 2,611 Dividends paid (2,025) (3,076) Borrowing (repayment) of debt (71,152) 275,980 Net cash provided by (used in) financing activities (67,607) 275,515 Effect of exchange rate changes on cash 1,335 229 Net change in cash and equivalents 26,253 4,589 Beginning balance of cash equivalents 41,923 70,821 Ending balance of cash equivalents $ 68,176 $ 75,410 Supplemental disclosures: Cash interest payments $ 1,621 $ 296 Cash income tax payments $ 9,430 $ 9,693 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 1998 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 April 2, 1999 and December 31, 1998, its results of operations for the three months ended April 2, 1999, and March 27, 1998, and its cash flows for the three months ended April 2, 1999 and March 27, 1998. Total comprehensive income was $36.1 million and $46.3 million for the 1999 and 1998 quarters, respectively. NOTE 2. SEGMENT INFORMATION Segment information is presented consistently with the basis described in the 1998 Annual Report. There has been no material change in total assets or liabilities by segment. Segment results for the 1999 first quarter are shown below: Sales Operating Profit 1999 1998 1999 1998 Process/Environmental Controls $432,744 $346,530 $64,750 $48,250 Tool and Components 321,846 299,710 35,290 29,491 Other - - (4,100) (3,727) $754,590 $646,240 $95,940 $74,014 NOTE 3. MERGER WITH HACH COMPANY On April 22, 1999, the Company announced an agreement to issue common stock in exchange for each outstanding share of Hach Company. The transaction will be a tax-free reorganization and will be accounted for as a pooling-of-interests. Accordingly, future financial statements will be restated to reflect the combined companies. Sales reported will increase $137.0 million in 1998 and $127.1 million in 1997. Reported net income will increase $9.2 million in 1998 and $12.0 million in 1997. 1998 reported diluted earnings per share will increase approximately $.01 and 1997 reported diluted earnings per share will increase approximately $.03. Results for interim periods have not yet been determined on a combined company basis. Hach is engaged in the manufacture and marketing of instruments and kits to analyze the chemical and other properties of water and aqueous solutions. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net Sales for the first quarter of 1999 of $754.6 million were 17% higher than the 1998 quarter. Sales were higher in both business segments. Of this increase, acquisitions accounted for approximately 11% and companies included in both periods accounted for 6%. Increases in the volume of shipments in all business segments provided this growth. Gross profit margin for the first quarter of 1999, as a percentage of sales, was 36.5%, which represents a 1.2 percentage point increase from 1998 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 1999 first quarter were 15% higher than in 1998 because of higher sales levels. As a percentage of sales, these costs decreased by 0.4 percentage points in 1999 to 22.5%, principally due to productivity improvements more than offsetting higher costs in this area associated with acquisitions made since the first quarter of 1998. Interest expense of $6,251,000 in 1999 was higher than the corresponding 1998 period. Average debt levels were higher in 1999, reflecting the large increase in debt associated with the Pacific Scientific acquisition for only the final two weeks of the 1998 first quarter. The 1999 effective tax rate of 38.5% is 0.9% higher than the 1998 effective rate, mainly due to adjustments to the tax rate made by Fluke in the 1998 quarter, which represented the fiscal year-end for Fluke. Liquidity and Capital Resources During the first quarter of 1999, the Company experienced increases in inventory and accounts payable. This is principally due to the lower activity levels experienced in the last weeks of the year due to the holiday season. Total debt under the Company's borrowing facilities decreased to $401.4 million at April 2, 1999, compared to $472.6 million at December 31, 1998. This decrease relates principally to the strong cash flow from operations. The Company declared a regular quarterly dividend of $.015 per share payable on April 30, 1999, to holders of record on March 26, 1999. 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 22, 1999 By: /s/ Patrick W. Allender Patrick W. Allender Chief Financial Officer Date: April 22, 1999 By: /s/ C. Scott Brannan C. Scott Brannan Controller EX-27 2
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