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Danaher Corporation
Attached is a reconciliation of adjusted diluted net earnings per share from continuing operations to diluted net earnings per share from continuing operations calculated according to GAAP, for the three and twelve month periods ended December 31, 2007 and the comparable prior year periods.
Sales from continuing operations for the 2007 fourth quarter were $3.1 billion, 19.5% higher than the $2.6 billion reported for the 2006 fourth quarter.
Net earnings from continuing operations for the full year 2007 were $1.2 billion, or $3.72 per diluted share. In addition to the fourth quarter 2007 items noted in the first paragraph, full year 2007 earnings per diluted share benefited from a $0.02 per diluted share gain related to the collection of indemnity proceeds and a $0.02 per diluted share gain resulting primarily from the impact of income tax rate reductions in certain international jurisdictions. Excluding these gains, as well as the other 2007 items referenced in the first paragraph, adjusted earnings per diluted share from continuing operations for the 2007 full year was $3.83, an increase of 19% compared to 2006 full year adjusted earnings per diluted share. Adjusted earnings per diluted share was $3.85 including the impact of $0.02 per diluted share for discontinued operations from prior quarters. For the 2007 full year, net earnings per diluted share was $4.19 which includes the gain on the sale of the Power Quality business in July 2007.
Sales from continuing operations for 2007 were $11 billion compared to $9.6 billion for 2006, an increase of 16.5%.
H. Lawrence Culp, Jr., President and Chief Executive Officer, stated, "We are pleased once again to report record fourth quarter and full year results. For the quarter, growth from existing businesses, also known as core revenues, increased 4.5%. Operating cash flow from continuing operations for the year was a record $1.7 billion, representing an 11% increase over 2006. Despite softness in some of our OEM and U.S. consumer facing end markets, we continue to see strength across most of our businesses and remain confident in our ability to again deliver in 2008."
Danaher Corporation is a leading manufacturer of Professional Instrumentation, Medical Technologies, Industrial Technologies, and Tools and Components (www.danaher.com).
Statements in this release that are not strictly historical, including the statements regarding expectations for 2008 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. These factors include, among other things, competition, our ability to develop and successfully market new products and technologies, our ability to expand our business in new geographic markets, our ability to identify, consummate and integrate appropriate acquisitions, litigation and other contingent liabilities including intellectual property matters, our compliance with applicable laws and regulations, the performance of our distribution and other channel partners, our ability to achieve projected efficiencies, cost reductions, sales growth and earnings, economic conditions in the end-markets we sell into, commodity costs and surcharges, currency exchange rates, tax audits, and general domestic and international economic conditions. 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 2006 Annual Report on Form 10-K and Third Quarter 2007 Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date of this release and the Company does not assume any obligation or intend to update any forward-looking statement except as required by law. 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
12/31/07 12/31/06 12/31/07 12/31/06
Sales $3,141,177 $2,625,394 $11,025,917 $9,466,056
Operating costs
and expenses:
Cost of sales 1,690,647 1,445,567 5,985,022 5,268,996
Selling, general
and administrative
expenses 769,178 627,793 2,713,097 2,273,227
Research and
development
expenses 216,582 109,827 601,424 440,002
Other (income)
expense - - (14,335) (16,379)
Total operating
expenses 2,676,407 2,183,187 9,285,208 7,965,846
Operating profit 464,770 442,207 1,740,709 1,500,210
Interest expense (32,793) (25,811) (109,702) (79,375)
Interest income 2,735 1,236 6,092 8,008
Earnings from
continuing operations
before income taxes 434,712 417,632 1,637,099 1,428,843
Income taxes (114,487) (97,623) (423,101) (319,637)
Earnings from
continuing operations 320,225 320,009 1,213,998 1,109,206
Earnings from
discontinued operations,
net of income taxes - 3,708 155,906 12,823
Net earnings $320,225 $323,717 $1,369,904 $1,122,029
Earnings per share from
continuing operations:
Basic $1.02 $1.04 $3.90 $3.60
Diluted $0.97 $0.99 $3.72 $3.44
Earnings per share from
discontinued operations:
Basic $0.00 $0.01 $0.50 $0.04
Diluted $0.00 $0.01 $0.47 $0.04
Net earnings per share:
Basic $1.02 $1.05 $4.40 $3.64
Diluted $0.97 $1.00 $4.19 $3.48
Average common stock
and common equivalent
shares outstanding:
Basic 315,437 308,894 311,225 307,984
Diluted 334,013 327,219 329,459 325,251
This information is presented for reference only. Final audited financial statements will include footnotes, which should be referenced when available,
to more fully understand the contents of this information.
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31 ($ in thousands)
ASSETS 2007 2006
Current Assets:
Cash and equivalents $239,108 $317,810
Trade accounts receivable, less allowance
for doubtful accounts of $108,782 and
$102,369 1,984,384 1,654,725
Inventories 1,193,615 988,709
Prepaid expenses and other current assets 632,660 475,495
Total current assets 4,049,767 3,436,739
Property, plant and equipment, net 1,108,634 868,623
Other assets 356,176 300,226
Goodwill 9,241,011 6,560,239
Other intangible assets, net 2,564,973 1,698,324
Total assets $17,320,561 $12,864,151
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current portion of
long-term debt $330,480 $10,855
Trade accounts payable 1,125,600 932,870
Accrued expenses and other liabilities 1,358,773 1,515,989
Total current liabilities 2,814,853 2,459,714
Other liabilities 2,024,256 1,336,916
Long-term debt 3,395,764 2,422,861
Stockholders' equity:
Common stock - $0.01 par value, 500,000
shares authorized; 352,608 and 341,223
issued; 317,984 and 308,242 outstanding 3,526 3,412
Additional paid-in capital 1,718,716 1,027,454
Accumulated other comprehensive income 542,690 191,985
Retained earnings 6,820,756 5,421,809
Total stockholders' equity 9,085,688 6,644,660
Total liabilities and stockholders' equity $17,320,561 $12,864,151
This information is presented for reference only. Final audited financial statements will include footnotes, which should be referenced when available,
to more fully understand the contents of this information.
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31 ($ in thousands)
2007 2006
Cash flows from operating activities:
Net earnings $1,369,904 $1,122,029
Less: earnings from discontinued
operations, net of tax 155,906 12,823
Net earnings from continuing operations 1,213,998 1,109,206
Non-cash items, net of the effect of
discontinued operations:
Depreciation 173,942 151,524
Amortization 94,550 64,173
Stock compensation expense 73,347 67,191
Change in deferred income taxes 39,336 24,154
Change in trade accounts receivable, net (72,555) (48,255)
Change in inventories 38,094 3,683
Change in accounts payable 103,800 75,927
Change in prepaid expenses and other
assets 38,601 (14,962)
Change in accrued expenses and other
liabilities (3,805) 98,088
Total operating cash flows from
continuing operations 1,699,308 1,530,729
Total operating cash flows from
discontinued operations (53,533) 16,522
Net cash flows from operating
activities 1,645,775 1,547,251
Cash flows from investing activities:
Payments for additions to property,
plant and equipment (162,071) (136,411)
Proceeds from disposals of property,
plant and equipment 15,537 9,988
Cash paid for acquisitions (3,576,562) (2,656,035)
Cash paid for investment in acquisition
target and other marketable securities (23,219) (84,102)
Proceeds from sale of investment and
divestitures 301,278 98,485
Total investing cash flows from
continuing operations (3,445,037) (2,768,075)
Total investing cash flows from
discontinued operations (722) (1,295)
Net cash used in investing
activities (3,445,759) (2,769,370)
Cash flows from financing activities:
Proceeds from issuance of common stock 733,028 98,415
Payment of dividends (34,275) (24,589)
Purchase of treasury stock (117,486) -
Net increase in borrowings
(maturities of 90 days or less) 647,761 846,897
Proceeds from debt borrowings
(maturities longer than 90 days) 493,705 757,490
Debt repayments (10,563) (459,372)
Net cash used in financing
activities $1,712,170 1,218,841
Effect of exchange rate changes on cash
and equivalents 9,112 5,537
Net change in cash and equivalents (78,702) 2,259
Beginning balance of cash and equivalents 317,810 315,551
Ending balance of cash and equivalents $239,108 $317,810
This information is presented for reference only. Final audited financial statements will include footnotes, which should be referenced when available,
to more fully understand the contents of this information.
DANAHER CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
($ in thousands, unaudited)
Sales
Three Months Ended Year Ended
12/31/07 12/31/06 12/31/07 12/31/06
Professional
Instrumentation $1,097,511 $799,247 $3,537,912 $2,906,464
Medical Technologies 866,311 697,386 2,997,986 2,219,976
Industrial Technologies 812,436 756,914 3,153,378 2,988,820
Tools & Components 364,919 371,847 1,336,641 1,350,796
$3,141,177 $2,625,394 $11,025,917 $9,466,056
Operating Profit
Professional
Instrumentation $175,227 $178,387 $709,502 $625,577
Medical Technologies 132,863 102,088 393,230 261,604
Industrial Technologies 132,046 123,570 532,477 467,737
Tools & Components 43,210 54,513 175,634 194,063
Other (18,576) (16,351) (70,134) (48,771)
$464,770 $442,207 $1,740,709 $1,500,210
Operating Margins
Professional
Instrumentation 16.0% 22.3% 20.1% 21.5%
Medical Technologies 15.3% 14.6% 13.1% 11.8%
Industrial Technologies 16.3% 16.3% 16.9% 15.7%
Tools & Components 11.8% 14.7% 13.1% 14.4%
Total 14.8% 16.8% 15.8% 15.9%
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
Supplemental Reconciliation of Diluted Earnings Per Share from Continuing
Operations (GAAP) to Adjusted Diluted Earnings Per Share from Continuing
Operations (Non-GAAP)
Three Months and Years Ended December 31, 2007 and
December 31, 2006
Three Months Ended Years Ended
December December % December December %
31, 2007 31, 2006 Change 31, 2007 31, 2006 Change
Earnings from
Continuing
Operations per
GAAP $320,225 $320,009 0.0% $1,213,998 $1,109,206 9.5%
After-tax gain on
indemnity proceeds
related to
litigation matter
($12.5 million
pre-tax) - - (8,110) -
After-tax gain on
sale of securities
acquired in
connection with an
unsuccessful
acquisition bid
(First Technology
- $14 million
pre-tax) - - - (9,083)
Gains from net
reduction in
income tax
reserves and
discrete tax
benefits (14,562) (16,800) (21,084) (69,473)
After-tax charges
related to the
acquisition of
Tektronix, for
purchased in-
process research
and development
and fair value
adjustments to
recorded
inventory and
deferred revenue
balances ($68.2
Million pre-tax) 66,000 - 66,000
Adjusted Earnings
from Continuing
Operations
(Non-GAAP) $371,663 $303,209 22.5% $1,250,804 $1,030,650 21.5%
Diluted Earnings
Per Share from
Continuing
Operations per
GAAP $0.97 $0.99 -2.0% $3.72 $3.44 8.0%
After-tax gain on
indemnity proceeds
related to
litigation matter
($12.5 million
pre-tax) - - $(0.02) -
After-tax gain on
sale of securities
acquired in
connection with
an unsuccessful
acquisition bid
(First Technology
- $14 million
pre-tax) - - - (0.03)
Gains from net
reduction in
income tax
reserves and
discrete tax
benefits (0.05) (0.05) (0.07) (0.21)
After-tax charges
related to the
acquisition of
Tektronix, for
purchased in-
process research
and development
and fair value
adjustments to
recorded
inventory and
deferred revenue
balances ($68.2
Million pre-tax) 0.20 0.20
Adjusted Diluted
Earnings Per Share
from Continuing
Operations
(Non-GAAP) $1.12 $0.94 19.0% $3.83 $3.20 19.0%
NOTE: In addition to the results provided in this release in accordance
with U.S. Generally Accepted Accounting Principles ("GAAP"), the Company
has provided the non-GAAP measure of adjusted diluted earnings per share
from continuing operations (the "non-GAAP measure") which compares
diluted net earnings per share from continuing operations for the three
months and year ended December, 2007 to diluted earnings per share from
continuing operations for the three months and year ended December 31,
2006 on a basis which:
-- In the 2007 period, excludes (1) the gain on indemnity proceeds
received in connection with a litigation matter, (2) gains related to
a net reduction of income tax reserves and discrete tax benefits, and
(3) certain non-cash charges related to the acquisition of Tektronix,
Inc. for purchased in-process research and development and the fair
value adjustments to recorded inventory and deferred revenue
balances; and
-- In the 2006 period, excludes (1) gains related to a net reduction of
income tax reserves and discrete tax benefits, and (2) gains related
to the sale of securities acquired in connection with an unsuccessful
acquisition bid.
The non-GAAP measure should be considered in addition to, and not as a
replacement for or superior to, diluted net earnings per share calculated
according to GAAP. Danaher's non-GAAP measure may be defined differently
than similar non-GAAP measures that are used by other companies.
Danaher management believes that the non-GAAP measure reflects an
additional way of viewing aspects of Danaher's operations that, when
viewed with and reconciled to the corresponding GAAP measure, provide a
more complete understanding of Danaher's current performance and
performance compared to previous periods and forecasts, and helps identify
underlying trends in Danaher's business. The gains related to indemnity
proceeds, the sale of securities and the net reductions in income tax
reserves and discrete tax benefits have been excluded from the non-GAAP
measure because items of this nature and size occur with inconsistent
frequency and for reasons that may be unrelated to Danaher's commercial
performance during the period. The charges related to the Tektronix
acquisition have been excluded because acquisition-related charges of this
nature and size occur with inconsistent frequency and we believe are not
indicative of Danaher's ongoing operating costs in a given period.
Danaher management references the non-GAAP measure in assessing current
performance and making decisions about internal budgets, resource
allocation and financial goals for its business units. Danaher management
believes that the non-GAAP measure helps investors and others, if they so
choose, in understanding and evaluating Danaher's current operating
performance and future prospects in the same manner as management does. In
addition, Danaher believes that analysts and others in the investment
community use the non-GAAP measure to assess Danaher's performance,
identify trends in Danaher's performance and provide estimates of future
performance.
A general limitation of the non-GAAP measure is that use of the non-GAAP
measure (as compared to the related GAAP measure) may reduce comparability
with other companies who may calculate similar non-GAAP measures
differently. Another limitation of the non-GAAP measure is that it
excludes items of income that affect Danaher's operations and that may
recur in the course of Danaher's business (though at times and in amounts
that may be difficult to predict). Danaher management compensates for
these and other limitations of the non-GAAP measure by also considering
Danaher's financial results as determined in accordance with GAAP.
First Call Analyst:
FCMN Contact:
SOURCE: Danaher Corporation
CONTACT: Andy Wilson, Vice President, Investor Relations of Danaher
Corporation, +1-202-828-0850
Web site: http://www.danaher.com/