WASHINGTON, Oct. 22 /PRNewswire-FirstCall/ -- Danaher Corporation
(NYSE: DHR) announced today that GAAP net earnings for the quarter
ended October 2, 2009 were $351 million, or $1.05 per diluted
share, a 5.5% decrease as compared to the Company's 2008 third
quarter GAAP net earnings of $372 million, or $1.11 per diluted
share. On a non-GAAP basis, which reflects the adjustments
identified in the attached reconciliation, adjusted net earnings
for the quarter ended October 2, 2009 were $299 million or $0.89
per diluted share, a 22% decrease over 2008 third quarter adjusted
net earnings of $382 million or $1.14 per diluted share. Sales for
the 2009 third quarter were $2.75 billion, 14.5% less than the
$3.21 billion reported for the 2008 third quarter. Core revenues
declined 14% in the quarter, compared to the third quarter of 2008.
GAAP net earnings for the first nine months of 2009 were $885
million, or $2.66 per diluted share, compared with GAAP net
earnings of $1.01 billion, or $3.03 per diluted share for the first
nine months of 2008. Sales for the first nine months of 2009 were
$8.05 billion compared to $9.52 billion for the first nine months
of 2008, a decrease of 15.5%. H. Lawrence Culp, Jr., President and
Chief Executive Officer, stated, "We were encouraged by the
sequential improvement in revenues and our very strong margin and
cash flow performance in the quarter. Our free cash flow was $472
million in the quarter, with a free cash flow to net income
conversion ratio of 134%. Our focus on capturing market share while
also accelerating cost reductions in a difficult economy, coupled
with our continued progress in our acquisition efforts, positions
us well for the balance of 2009 and beyond." Danaher will discuss
its results during its investor conference call today starting at
8:00 a.m. EDT. 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 888-438-5449 or 719-325-2495 a few minutes before the 8:00
a.m. EDT start and telling the operator that you are dialing in for
Danaher's investor conference call, access code 8728742. A replay
of the conference call will be available shortly after the
conclusion of the call until October 27, 2009 and you can access
the replay by dialing 888-203-1112 or 719-457-0820, access code
8728742. 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 50,000 associates serve customers in more than 125
countries and generated $12.7 billion of revenue in 2008. 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
cost reduction activities, acquisitions, efforts to increase market
share and expectations for the balance of 2009 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.
These factors include, among other things, the current global
economic recession and the upheaval in the credit markets and
financial services industry, competition, our ability to develop
and successfully market new products and technologies, the
contractions or growth rates and cyclicality of markets we serve,
our ability to expand our business in new markets, our ability to
successfully identify, consummate and integrate appropriate
acquisitions, the impact of our debt obligations on our operations,
litigation and other contingent liabilities including intellectual
property and environmental matters, our compliance with applicable
laws and regulations and changes in applicable laws and
regulations, tax audits and changes in our tax rate, risks relating
to potential impairment of goodwill and other long-lived assets,
currency exchange rates, pension plan costs, commodity costs and
surcharges, labor matters, our relationships with and the
performance of our channel partners, our ability to achieve
projected efficiencies, cost reductions, sales growth and earnings,
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 any forward-looking statement. To download a
copy of the full earnings report, please go to
http://www.danaher.com/. DANAHER CORPORATION CONSOLIDATED CONDENSED
STATEMENTS OF EARNINGS ($ and shares in thousands, except per share
amounts) (unaudited) Three Months Ended Nine Months Ended October
2, September October 2, September 26, 2009 26, 2008 2009 2008
---------- --------- ---------- ------------ Sales $2,750,693
$3,208,181 $8,052,046 $9,520,950 ---------- ---------- ----------
---------- Operating costs and expenses: Cost of sales 1,429,736
1,697,611 4,210,211 5,032,365 Selling, general and administrative
expenses 782,438 806,424 2,299,756 2,484,783 Research and
development expenses 159,040 182,006 478,435 557,976 Other (income)
expense (85,118) -- (85,118) -- ------- ------- Total operating
expenses 2,286,096 2,686,041 6,903,284 8,075,124 ---------
--------- --------- --------- Operating profit 464,597 522,140
1,148,762 1,445,826 Interest expense (31,842) (30,218) (87,228)
(104,741) Interest income 1,594 1,070 3,385 6,004 ----- ----- -----
----- Earnings before income taxes 434,349 492,992 1,064,919
1,347,089 Income taxes (82,986) (121,000) (180,150) (335,144)
------- -------- -------- -------- Net earnings $351,363 $371,992
$884,769 $1,011,945 ======== ======== ======== ========== Net
earnings per share: Basic $1.09 $1.16 $2.78 $3.17 ----- ----- -----
----- Diluted $1.05 $1.11 $2.66 $3.03 ===== ===== ===== =====
Average common stock and common equivalent shares outstanding:
Basic 321,093 319,887 318,519 319,307 Diluted 336,268 337,334
334,763 336,619 See the accompanying Notes to Consolidated
Condensed Financial Statements. A complete copy of Danaher's Form
10-Q financial statements is available on the Company's website
(http://www.danaher.com/). DANAHER CORPORATION RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES ($ in 000's except per share
data) Three Months Ended ------------------ October 2, September
26, Adjusted Net Earnings 2009 2008 % Change ---------------------
---------- ------------- -------- Net Earnings (GAAP) $351,363
$371,992 -5.5% ==== Restructuring activities (other than
restructuring activities originally budgeted for 2009) approved by
the Company totaling $33 million and $67 million pre-tax for the
three and nine months ended October 2, 2009, respectively (included
as part of the total restructuring charges incurred by the Company
of $45 million and $101 million for the three and nine months ended
October 2, 2009, respectively). ("2009 Additional Restructurings")
25,115 - 2009 transaction costs associated with completed and
pending acquisitions expensed in accordance with the adoption of
the new business combination accounting standard ($8 million and
$11 million pre-tax for the three and nine months ended October 2,
2009) and fair value adjustments to recorded inventory and deferred
revenue balances related to 2009 acquisitions ($7 million and $11
million pre-tax for the three months and nine months ended October
2, 2009) and 2008 acquisitions ($13 million & $53 million
pre-tax for the three months and nine months ended September 26,
2008, respectively). ("Acquisition Related Costs") 12,697 9,727
Gain on intellectual property litigation settlement with Align
Technology, Inc.($85 million pre-tax for both the three and nine
months ended October 2, 2009, respectively). ("Align Settlement
Gain") (53,412) - Gains from net reduction in income tax reserves
and discrete tax benefits ("Discrete Income Tax Items") (36,729)
(149) -------- -------- Adjusted Net Earnings (Non-GAAP) $299,034
$381,570 -21.6% ======== ======== ===== Adjusted Diluted Net
Earnings per Share -------------------- Diluted Net Earnings Per
Share (GAAP) $1.05 $1.11 -5.4% ==== 2009 Additional Restructurings
0.07 - Acquisition Related Costs 0.04 0.03 Align Settlement Gain
(0.16) - Discrete Income Tax Items (0.11) - ----- ----- Adjusted
Diluted Net Earnings Per Share (Non- GAAP) $0.89 $1.14 -21.9% =====
===== ===== Nine Months Ended ----------------- October 2,
September 26, Adjusted Net Earnings 2009 2008 % Change
--------------------- ---------- ------------- -------- Net
Earnings (GAAP) $884,769 $1,011,945 -12.6% ===== Restructuring
activities (other than restructuring activities originally budgeted
for 2009) approved by the Company totaling $33 million and $67
million pre-tax for the three and nine months ended October 2,
2009, respectively (included as part of the total restructuring
charges incurred by the Company of $45 million and $101 million for
the three and nine months ended October 2, 2009, respectively).
("2009 Additional Restructurings") 50,615 - 2009 transaction costs
associated with completed and pending acquisitions expensed in
accordance with the adoption of the new business combination
accounting standard ($8 million and $11 million pre-tax for the
three and nine months ended October 2, 2009) and fair value
adjustments to recorded inventory and deferred revenue balances
related to 2009 acquisitions ($7 million and $11 million pre-tax
for the three months and nine months ended October 2, 2009) and
2008 acquisitions ($13 million & $53 million pre-tax for the
three months and nine months ended September 26, 2008,
respectively). ("Acquisition Related Costs") 17,517 39,315 Gain on
intellectual property litigation settlement with Align Technology,
Inc.($85 million pre-tax for both the three and nine months ended
October 2, 2009, respectively). ("Align Settlement Gain") (53,412)
- Gains from net reduction in income tax reserves and discrete tax
benefits ("Discrete Income Tax Items") (97,229) (8,364) --------
---------- Adjusted Net Earnings (Non-GAAP) $802,260 $1,042,896
-23.1% ======== ========== ===== Adjusted Diluted Net Earnings per
Share -------------------- Diluted Net Earnings Per Share (GAAP)
$2.66 $3.03 -12.2% ===== 2009 Additional Restructurings 0.15 -
Acquisition Related Costs 0.05 0.12 Align Settlement Gain (0.16) -
Discrete Income Tax Items (0.29) (0.03) ----- ----- Adjusted
Diluted Net Earnings Per Share (Non- GAAP) $2.41 $3.12 -22.8% =====
===== ===== DANAHER CORPORATION RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES ($ in 000's except per share data) Core Sales
Growth ----------------- Three Months Ended October 2, 2009 vs.
Nine Months Ended October Components of Sales Comparable 2, 2009
vs. Comparable Growth 2008 Period 2008 Period ------------
------------------------- Core (non-GAAP) -14.0% -13.0%
Acquisitions (non-GAAP) 1.5% 2.0% Impact of currency translation
(non-GAAP) -2.0% -4.5% ---- ---- Total Sales Growth (GAAP) -14.5%
-15.5% ===== ===== Free Cash Flow -------------- Three Months Ended
October 2, Nine Months Ended October 2009 2, 2009 ------------
------------------------- Operating Cash Flow (GAAP) $503,148
$1,305,492 Less: Purchases of Property, Plant and Equipment
(31,471) (115,414) ------- -------- Free Cash Flow (Non- GAAP)
471,677 1,190,078 Net Income (GAAP) 351,363 884,769 ------- -------
Free Cash Flow to Net Income Conversion Ratio (Non-GAAP) 134% 135%
=== === General We believe that the non-GAAP measures set forth
above, 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. A
general limitation of these non-GAAP measures is that use of these
measures (as compared to the related GAAP measures) may reduce
comparability with other companies who may define or calculate
similar non-GAAP measures differently. Danaher management
compensates, and believes that investors should compensate, for the
limitations of these measures by also considering Danaher's
financial performance as determined in accordance with GAAP.
Adjusted Net Earnings and Adjusted Diluted Net Earnings Per Share
We use the term adjusted net earnings and adjusted diluted net
earnings per share (on an actual and/or forecasted basis) to refer
to GAAP earnings per share, excluding the items 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 us and 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 use these measures, and 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. Danaher's management also uses
these measures in making decisions about internal budgets, resource
allocation and financial goals for its business units. A particular
limitation of these non-GAAP measures is that they exclude charges
or gains that can significantly affect Danaher's results of
operations and that may recur in the course of Danaher's business
(though at times and in amounts that may be difficult to predict).
Core Revenue and Core Revenue Growth/Decline We use the term "core
revenue" to refer to GAAP revenue from (1) existing businesses and
(2) acquired businesses starting from and after the first
anniversary of the acquisition, but in both cases excluding the
effect of foreign currency translation. We use the related 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 foreign currency translation
from these measures because foreign currency translation is not
completely under management's control, is subject to volatility and
can therefore obscure underlying business trends. We exclude the
effect of acquisitions and divestitures because the nature, size
and number of acquisitions and divestitures 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 us and 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 use these measures,
and believe that investors use these measures, to help gauge
Danaher's long-term growth prospects and to value Danaher. A
particular limitation of these non-GAAP measures is that they
exclude items that can significantly affect Danaher's revenues and
that may recur in the course of Danaher's business (though at times
and in amounts that may be difficult to predict). Free Cash Flow
and Free Cash Flow to Net Income Conversion Ratio We use the term
"free cash flow" to refer to GAAP operating cash flow less
purchases of property, plant and equipment. We use the related term
"free cash flow to net income conversion ratio" to refer to free
cash flow divided by GAAP net income. 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, helps us and our investors to better
understand Danaher's ability to generate cash without external
financings. We use these measures, and believe investors use these
measures, to help gauge the resources available for strategic
opportunities such as making acquisitions, investing in the
business and strengthening the balance sheet, and to assess the
strength of Danaher's earnings performance. In addition, management
uses these measures in making operating decisions, allocating
financial resources and for budget planning purposes. A particular
limitation of these non-GAAP measures is that they do not take into
account the Company's debt service requirements and other
non-discretionary expenditures and therefore are not necessarily
indicative of amounts of cash that may be available for
discretionary uses. 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/
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