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Danaher Reports Fourth Quarter and Full Year 2009 Results

WASHINGTON, Jan 28, 2010 /PRNewswire via COMTEX/ -- 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 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: 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 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.

SOURCE Danaher Corporation