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WASHINGTON, Jan. 28 /PRNewswire-FirstCall/ -- Danaher Corporation (NYSE: DHR) announced today that GAAP net earnings for the quarter ended December 31, 2009 were $267 million, or $0.80 per diluted share, a 13% decrease as compared to the Company's 2008 fourth quarter GAAP net earnings of $306 million, or $0.92 per diluted share. On a non-GAAP basis, which reflects the adjustments identified in the attached reconciliation schedule, adjusted net earnings for the quarter ended December 31, 2009 were $375 million or $1.12 per diluted share, a 1% increase over 2008 fourth quarter adjusted net earnings of $371 million or $1.11 per diluted share. Sales for the 2009 fourth quarter were $3.1 billion, 1.5% less than the $3.2 billion reported for the 2008 fourth quarter. Core revenues declined 9% in the quarter, compared to the fourth quarter of 2008.
GAAP net earnings for the full year 2009 were $1.15 billion, or $3.46 per diluted share, compared with GAAP net earnings of $1.32 billion, or $3.95 per diluted share for 2008. Sales for the full year 2009 were $11.2 billion compared to $12.7 billion for the full year 2008, a decrease of 12%.
H. Lawrence Culp, Jr., President and Chief Executive Officer, stated, "We were encouraged by the continued sequential end market improvements in the fourth quarter, as well as our team's solid execution on the restructuring initiatives undertaken throughout the year. Our continued focus on internal growth investments, new product introductions and strategic M&A opportunities give us confidence that we can outperform in 2010 and over the long term."
Danaher will discuss its results during its investor conference call today starting at 7:30 a.m. EST. The call and an accompanying slide presentation will be webcast on the "Investors" section of Danaher's website at http://www.danaher.com/. A replay of the webcast can be accessed on the "Investors" section of Danaher's website (under the subheading "Investor Events") shortly after the conclusion of the presentation, and the webcast will remain available until the next quarterly earnings call. The conference call can be accessed by dialing 888-417-2254 in the US or 719-325-2339 outside the US a few minutes before the 7:30 a.m. EST start and telling the operator that you are dialing in for Danaher's investor conference call, access code 5742258. A replay of the conference call will be available shortly after the conclusion of the call until February 2, 2010 and you can access the replay by dialing 888-203-1112 in the US or 719-457-0820 outside the US, access code 5742258. In addition, presentation materials relating to Danaher's results have been posted to the "Investors" section of Danaher's website under the subheading "Earnings."
Danaher is a diversified technology leader that designs, manufactures, and markets innovative products and services to professional, medical, industrial, and commercial customers. Our portfolio of premier brands is among the most highly recognized in each of the markets we serve. Driven by a foundation provided by the Danaher Business System, our 47,000 associates serve customers in more than 125 countries and generated $11.2 billion of revenue in 2009. For more information please visit our website: http://www.danaher.com/.
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings announcement also contains non-GAAP financial measures. The reasons why we use these measures, a reconciliation of these measures to the most directly comparable GAAP measures and other information relating to these measures are included in the supplemental reconciliation schedule attached.
Statements in this release that are not strictly historical, including the statements regarding execution of cost reduction activities, growth investments, new product introductions, acquisitions and expectations for 2010 and future periods and any other statements regarding events or developments that we believe or anticipate will or may occur in the future, may be "forward-looking" statements. There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include, among other things, the current uncertainty in the global economy and credit markets, the impact of our restructuring activities on our ability to grow, contractions or growth rates and cyclicality of markets we serve, competition, our ability to develop and successfully market new products and technologies and expand into new markets, our ability to successfully identify, consummate and integrate appropriate acquisitions, contingent liabilities relating to acquisitions, risks relating to potential impairment of goodwill and other long-lived assets, currency exchange rates, our compliance with applicable laws and regulations and changes in applicable laws and regulations, tax audits and changes in our tax rate, litigation and other contingent liabilities including intellectual property and environmental matters, risks relating to product defects and recalls, the impact of our debt obligations on our operations, pension plan costs, commodity costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, legislative health care reform and other changes in health care industry, labor matters, our relationships with and the performance of our channel partners, risks relating to man-made and natural disasters, our ability to achieve projected cost reductions and growth, and international economic, political, legal and business factors. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our 2008 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarter ended October 2, 2009. These forward-looking statements speak only as of the date of this release and the Company does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
To download a copy of the full earnings report, please go to http://www.danaher.com/.
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
($ in thousands, except per share amounts)
Three Months Ended Year Ended
12/31/09 12/31/08 12/31/09 12/31/08
-------- -------- -------- --------
Sales $3,132,892 $3,176,506 $11,184,938 $12,697,456
Operating costs
and expenses:
Cost of sales 1,694,507 1,724,897 5,904,718 6,757,262
Selling,
general and
administrative
expenses 890,455 860,491 3,190,211 3,345,274
Research and
development
expenses 154,216 167,467 632,651 725,443
Other (income)
expense -- -- (85,118) --
--- --- ------- ---
Total
operating
expenses 2,739,178 2,752,855 9,642,462 10,827,979
Operating profit 393,714 423,651 1,542,476 1,869,477
Interest expense (35,428) (25,433) (122,656) (130,174)
Interest income 1,649 4,000 5,034 10,004
----- ----- ----- ------
Earnings before
income taxes 359,935 402,218 1,424,854 1,749,307
Income taxes (93,000) (96,532) (273,150) (431,676)
------- ------- -------- --------
Net earnings $266,935 $305,686 $1,151,704 $1,317,631
======== ======== ========== ==========
Net earnings
per share:
Basic $0.83 $0.96 $3.59 $4.13
----- ----- ----- -----
Diluted $0.80 $0.92 $3.46 $3.95
===== ===== ===== =====
Average common stock
and common
equivalent shares
outstanding:
Basic 322,716 319,523 320,765 319,361
Diluted 338,680 333,593 335,742 335,863
This information is presented for reference only. Final audited financial
statements will include footnotes, which should be referenced when
available, to more fully understand the contents of this information.
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31 ($ and shares in thousands)
ASSETS
2009 2008
---- ----
Current Assets:
Cash and equivalents $1,721,920 $392,854
Trade accounts receivable, less allowance
for doubtful accounts of $133,103 and
$120,730, respectively
1,916,831 1,894,585
Inventories 993,016 1,142,309
Prepaid expenses and other current assets 588,861 757,371
------- -------
Total current assets 5,220,628 4,187,119
Property, plant and equipment, net 1,143,331 1,108,653
Other assets 758,035 464,353
Goodwill 9,817,923 9,210,581
Other intangible assets, net 2,655,503 2,519,422
--------- ---------
Total assets $19,595,420 $17,490,128
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current portion of long-
term debt $44,186 $66,159
Trade accounts payable 1,051,487 1,108,961
Accrued expenses and other liabilities 1,665,287 1,569,977
--------- ---------
Total current liabilities 2,760,960 2,745,097
Other long-term liabilities 2,315,261 2,383,299
Long-term debt 2,889,023 2,553,170
Stockholders' equity:
Common stock -$0.01 par value, 1 billion
shares authorized; 358,922 and 354,487
issued; 322,735 and 318,380 outstanding,
respectively 3,589 3,544
Additional paid-in capital 2,074,501 1,812,963
Retained earnings 9,205,142 8,095,155
Accumulated other comprehensive income
(loss) 346,944 (103,100)
------- --------
Total stockholders' equity 11,630,176 9,808,562
---------- ---------
Total liabilities and stockholders' equity $19,595,420 $17,490,128
=========== ===========
This information is presented for reference only. Final audited financial
statements will include footnotes, which should be referenced when
available, to more fully understand the contents of this information.
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31 ($ in thousands)
2009 2008
---- ----
Cash flows from operating activities:
Net earnings $1,151,704 $1,317,631
Non-cash items:
Depreciation 184,524 193,997
Amortization 157,063 145,290
Stock compensation expense 87,350 86,000
Consideration received in shares (84,749) --
Change in deferred income taxes (120,031) 27,691
Change in trade accounts receivable, net 106,132 71,403
Change in inventories 211,595 33,119
Change in accounts payable (89,853) 3,713
Change in prepaid expenses and other
assets 142,396 (4,773)
Change in accrued expenses and other
liabilities 54,703 (15,042)
------ -------
Total operating cash flows 1,800,834 1,859,029
--------- --------
Cash flows from investing activities:
Payments for additions to property, plant
and equipment (188,547) (193,783)
Proceeds from disposals of property, plant
and equipment 6,090 1,088
Cash paid for acquisitions (703,511) (423,208)
Cash paid for other investments (66,768) --
Proceeds from divestitures, sale of
investment and refundable escrowed
purchase price 9,795 48,504
----- ------
Total investing cash flows (942,941) (567,399)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock 174,233 82,430
Payment of dividends (41,717) (38,259)
Purchase of treasury stock -- (74,165)
Net repayments of borrowings (maturities
of 90 days or less) (445,711) (905,567)
Proceeds of borrowings (maturities longer
than 90 days) 744,615 72,652
Repayments of borrowings (maturities
longer than 90 days) (24,188) (259,344)
------- --------
Net cash (used in) provided by financing
activities 407,232 (1,122,253)
------- ----------
Effect of exchange rate changes on cash
and equivalents 63,941 (15,631)
------ -------
Net change in cash and equivalents 1,329,066 153,746
Beginning balance of cash and equivalents 392,854 239,108
------- ------
Ending balance of cash and equivalents $1,721,920 $392,854
========== ========
This information is presented for reference only. Final audited financial
statements will include footnotes, which should be referenced when
available, to more fully understand the contents of this
information.
DANAHER CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
($ in thousands, unaudited)
Sales Three Months Ended Year Ended
----- ------------------ ----------
12/31/09 12/31/08 12/31/09 12/31/08
-------- -------- -------- --------
Professional
Instrumentation $1,224,686 $1,243,949 $4,330,695 $4,860,764
Medical Technologies 921,050 843,820 3,141,916 3,277,026
Industrial Technologies 705,116 777,932 2,658,041 3,265,451
Tools & Components 282,040 310,805 1,054,286 1,294,215
------- ------- --------- ---------
$3,132,892 $3,176,506 $11,184,938 $12,697,456
========== ========== =========== ===========
Operating
Profit
---------
Professional
Instrumentation $228,171 $221,960 $728,479 $907,254
Medical Technologies 78,043 90,134 395,489 370,473
Industrial Technologies 80,926 106,569 383,241 522,112
Tools & Components 29,520 30,343 124,814 157,673
Other (22,946) (25,355) (89,547) (88,035)
------- ------- ------- -------
$393,714 $423,651 $1,542,476 $1,869,477
======== ======== ========== ==========
Operating Margins
-----------------
Professional
Instrumentation 18.6% 17.8% 16.8% 18.7%
Medical Technologies 8.5% 10.7% 12.6% 11.3%
Industrial Technologies 11.5% 13.7% 14.4% 16.0%
Tools & Components 10.5% 9.8% 11.8% 12.2%
Total 12.6% 13.3% 13.8% 14.7%
Restructuring & Other
Related Charges
---------------------
Professional
Instrumentation $40,184 $28,813 $99,016 $28,813
Medical Technologies 44,847 26,081 60,531 26,081
Industrial Technologies 40,858 23,093 60,701 23,093
Tools & Components 11,243 3,978 18,281 3,978
------ ----- ------ -----
Total $137,132 $81,965 $238,529 $81,965
======== ======= ======== =======
Restructuring Cost
Classification
------------------
Cost of sales $87,303 $33,130 $121,783 $33,130
Selling, general
and administrative
expenses 49,829 48,835 116,746 48,835
------ ------ ------- ------
$137,132 $81,965 $238,529 $81,965
======== ======= ======== =======
This information is presented for reference only. Final audited financial
statements will include footnotes, which should be referenced when
available, to more fully understand the contents of this information
DANAHER CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
($ in 000's except per share data)
Three Months Ended
------------------
December 31, December 31,
Adjusted Net Earnings 2009 2008 % Change
--------------------- ---- ---- --------
Net Earnings (GAAP) $266,935 $305,686 -12.7%
=====
Restructuring charges in excess
of amounts originally budgeted
for the applicable period ($125
million and $82 million pre-tax
for the three months ended December
31, 2009 and 2008, respectively,
and $190 million and $82 million
pre-tax for the years ended
December 31, 2009 and 2008,
respectively) ("Additional
Restructurings") 93,750 61,500
2009 transaction costs associated
with completed and pending
acquisitions (expensed in accordance
with the adoption of the new business
combination accounting standard)
($12 million and $24 million pre-tax
for the three months and year ended
December 31, 2009, respectively), and
fair value adjustments to
acquisition-related inventory and
deferred revenue balances incurred
in 2009 ($3 million and $13 million
pre-tax for the three months and year
ended December 31, 2009, respectively)
and in 2008 ($7 million and $52 million
pre-tax for the three months and year
ended December 31, 2008, respectively)
("Acquisition Related Costs") 14,250 5,150
Gain on intellectual property
litigation settlement with Align
Technology, Inc. ($85 million
pre-tax). ("Align Settlement Gain") - -
Gains from net reduction in income
tax reserves and discrete tax benefits
("Discrete Income Tax Items") - (1,160)
--- ------
Adjusted Net Earnings (Non-
GAAP) $374,935 $371,176 1.0%
======== ======== ===
Adjusted Diluted Net Earnings
Per Share
-----------------------------
Diluted Net Earnings Per Share
(GAAP) $0.80 $0.92 -13.0%
====
Additional Restructurings 0.28 0.18
Acquisition Related Costs 0.04 0.01
Align Settlement Gain - -
Discrete Income Tax Items - -
--- ---
Adjusted Diluted Net Earnings
Per Share (Non-GAAP) $1.12 $1.11 0.9%
===== ===== ===
Year Ended
----------
December 31, December 31,
Adjusted Net Earnings 2009 2008 % Change
--------------------- ---- ---- --------
Net Earnings (GAAP) $1,151,704 $1,317,631 -12.6%
======
Restructuring charges in excess
of amounts originally budgeted
for the applicable period ($125
million and $82 million pre-tax
for the three months ended December
31, 2009 and 2008, respectively,
and $190 million and $82 million
pre-tax for the years ended December
31, 2009 and 2008, respectively)
("Additional Restructurings") 144,365 61,500
2009 transaction costs associated
with completed and pending
acquisitions (expensed in accordance
with the adoption of the new
business combination accounting
standard) ($12 million and $24 million
pre-tax for the three months and
year ended December 31, 2009,
respectively), and fair value
adjustments to acquisition-related
inventory and deferred revenue
balances incurred in 2009 ($3 million
and $13 million pre-tax for the
three months and year ended
December 31, 2009, respectively)
and in 2008 ($7 million and $52
million pre-tax for the three
months and year ended December 31,
2008, respectively) ("Acquisition
Related Costs") 31,767 44,465
Gain on intellectual property
litigation settlement with Align
Technology, Inc. ($85 million
pre-tax). ("Align Settlement Gain") (53,412) -
Gains from net reduction in
income tax reserves and discrete
tax benefits ("Discrete Income Tax
Items") (97,229) (9,524)
-------- -------
Adjusted Net Earnings (Non-
GAAP) $1,177,195 $1,414,072 -16.8%
========== ========== =====
Adjusted Diluted Net Earnings
Per Share
-----------------------------
Diluted Net Earnings Per Share
(GAAP) $3.46 $3.95 -12.4%
=====
Additional Restructurings 0.43 0.18
Acquisition Related Costs 0.09 0.13
Align Settlement Gain (0.16) -
Discrete Income Tax Items (0.29) (0.03)
----- -----
Adjusted Diluted Net Earnings
Per Share (Non-GAAP) $3.53 $4.23 -16.5%
===== ===== =====
Core Revenue Growth / Decline
-----------------------------
Three Months
Ended Year Ended
December 31, December 31,
2009 vs. 2009 vs.
Comparable Comparable 2008
Components of Sales Growth 2008 Period Period
------------- ----------------
Core (non-GAAP) -9.0% -12.0%
Acquisitions (non-GAAP) 3.0% 2.0%
Impact of currency translation (non-
GAAP) 4.5% -2.0%
--- ----
Total Sales Growth/Decline (GAAP) -1.5% -12.0%
==== =====
General
We believe that the non-GAAP measures set forth in this presentation, when viewed with and reconciled to the corresponding GAAP measures, provide additional understanding of Danaher's performance and help identify underlying trends in Danaher's business. The non-GAAP measures should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measures.
Adjusted Net Earnings and Adjusted Diluted Net Earnings Per Share
We use the term adjusted net earnings and adjusted diluted net earnings per share to refer to GAAP net earnings and GAAP diluted earnings per share, respectively excluding the items identified in the reconciliation schedule above. These items have been excluded from the non-GAAP measures because items of this nature and/or size occur with inconsistent frequency, for reasons that may be unrelated to Danaher's commercial performance during the period and/or we believe are not indicative of Danaher's ongoing operating costs or gains in a given period. We believe that these measures reflect additional ways of viewing aspects of Danaher's operations that, when viewed with and reconciled to the corresponding GAAP measures, help our investors to better understand the long-term profitability trends of our business, and facilitate easier comparisons of our profitability to prior and future periods and to our peers. We believe that investors use these measures to (1) generally assess the performance of our operating model, including assessing Danaher's performance against prior period performance, forecasted performance and/or peer company performance, (2) forecast financial results for future periods, (3) identify trends in Danaher's performance, and (4) value Danaher.
The Company estimates the tax effect of the items identified in the reconciliation schedule above by applying the Company's overall estimated effective tax rate to the pre-tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.
Core Revenue and Core Revenue Growth/Decline
We use the term "core revenue" to refer to GAAP revenue excluding (1) sales from acquired businesses recorded prior to the first anniversary of the acquisition ("acquisition sales"), and (2) the impact of currency translation. The portion of GAAP revenue attributable to currency translation is calculated as the difference between (a) the period-to-period change in GAAP revenue (excluding acquisition sales) and (b) the period-to-period change in revenue (excluding acquisition sales) after applying current period foreign exchange rates to the prior year period. We use the term "core revenue growth/decline" to refer to the measure of comparing current period core revenue with the corresponding period of the prior year. We exclude the effect of currency translation from these measures because currency translation is not under management's control, is subject to volatility and can therefore obscure underlying business trends. We exclude the effect of acquisitions because the nature, size and number of acquisitions can vary dramatically from period to period and between us and our peers, which we believe may obscure underlying business trends and makes comparisons of long-term performance difficult. We believe that these measures reflect additional ways of viewing aspects of Danaher's operations that, when viewed with and reconciled to the corresponding GAAP measures, help our investors to better identify and understand underlying growth trends in our business, and facilitate easier comparisons of our results of operations with prior and future periods and to our peers. We believe that investors use these measures to help gauge Danaher's long-term growth prospects and to value Danaher.
DATASOURCE: Danaher Corporation
CONTACT: Matt R. McGrew, Vice President, Investor Relations, Danaher
Corporation, +1-202-828-0850, Fax: +1-202-828-0860
Web Site: http://www.danaher.com/