WASHINGTON, July 23, 2015 /PRNewswire/ -- Danaher
Corporation (NYSE:DHR) today announced record results for the
second quarter 2015.
For the quarter ended July 3,
2015, non-GAAP adjusted diluted net earnings per share were
$1.08, which reflects the adjustments
identified in the attached reconciliation schedule. On a GAAP
basis, diluted net earnings for the second quarter were
$696 million, or $0.97 per share. Revenue for the second quarter
2015 increased 3.5% to $5.1 billion
with core revenues also increasing 3.5%.
The Company anticipates that non-GAAP, adjusted diluted net
earnings per share from continuing operations for the third quarter
2015 will be in the range of $1.00 to
$1.04. The Company is raising its full year 2015 non-GAAP
adjusted diluted net earnings per share from continuing operations
guidance to $4.25 to $4.33 from
$4.23 to $4.33.
Beginning with third quarter of 2015 results, the recently
divested Communications Business will be reclassified to
discontinued operations for all prior periods, resulting in a
$0.03 reduction in adjusted diluted
net earnings per share for the first half of 2015. This reduction
is essentially offset by the Company's second quarter earnings
outperformance relative to its April
2015 guidance. In addition, the Company's prospective
earnings per share results will be impacted by a reduction in the
number of common shares outstanding, as 26 million shares of
Danaher common stock were tendered to Danaher in exchange for the
Communications Business before it was merged with NetScout Systems,
Inc. The Company's updated 2015 guidance of $4.25 to $4.33 is inclusive of these changes.
Refer to the attached reconciliation for additional details.
Thomas P. Joyce, Jr., President
and Chief Executive Officer, stated, "This was an exciting quarter
for Danaher. Our team executed well, using the Danaher Business
System to deliver solid core revenue growth, excellent margin
expansion and earnings outperformance. We also announced the
pending acquisition of Pall Corporation-the largest in our
history-and our intent to separate into two public companies, all
while sustaining our significant organic growth investments. As we
move into the second half of 2015, we're confident that our focus
on driving growth and optimizing our portfolio will offer our
shareholders substantial value for years to come."
Danaher will discuss its results during its quarterly investor
conference call today starting at 8:00 a.m.
ET. The call and an accompanying slide presentation will be
webcast on the "Investors" section of Danaher's website,
www.danaher.com, under the subheading "Investor Events." A replay
of the webcast will be available in the same section of Danaher's
website shortly after the conclusion of the presentation and will
remain available until the next quarterly earnings call.
The conference call can be accessed by dialing 888-632-5017
within the U.S. or by dialing 913-981-5581 outside the U.S. a few
minutes before the 8:00 a.m. ET start
and telling the operator that you are dialing in for Danaher's
investor conference call (access code 1995288). A replay of the
conference call will be available shortly after the conclusion of
the call and until Thursday, July 30,
2015. The replay can be accessed by dialing 888-203-1112
within the U.S. or 719-457-0820 outside the U.S. with the access
code 1995288. In addition, presentation materials relating to
Danaher's results have been posted to the "Investors" section of
Danaher's website under the subheading "Financial Information -
Quarterly Earnings."
ABOUT DANAHER
Danaher is a global science and technology innovator committed
to helping its customers solve complex challenges and improving
quality of life around the world. Its family of world class brands
have leadership positions in some of the most demanding and
attractive industries, including health care, environmental and
industrial. The Company's globally diverse team of 71,000
associates is united by a common culture and operating system, the
Danaher Business System. In 2014, Danaher generated $19.9 billion in revenue and its market
capitalization exceeded $60 billion.
For more information please visit: www.danaher.com.
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), this earnings
release also contains non-GAAP financial measures. The reasons why
we believe these measures provide useful information to investors,
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.
FORWARD LOOKING STATEMENTS
Statements in this release that are not strictly historical,
including the statements regarding the Company's anticipated
adjusted diluted net earnings per share for the third quarter and
full year 2015, the anticipated earnings impact from the
Communications business reclassification, the pending acquisition
of Pall Corporation, the anticipated separation of Danaher into two
public companies, the Company's plans to drive growth and optimize
its portfolio and any other statements regarding events or
developments that we believe or anticipate will or may occur in the
future are "forward-looking" statements within the meaning of the
federal securities laws. There are a number of important factors
that could cause actual results, developments and business
decisions 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, deterioration of or instability in the
economy, the markets we serve and the financial 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, the
potential for improper conduct by our employees, agents or business
partners, our ability to successfully identify, consummate and
integrate appropriate acquisitions and successfully complete
divestitures and other dispositions, contingent liabilities
relating to acquisitions and divestitures, our ability to close the
acquisition of Pall Corporation and achieve the anticipated
benefits of that transaction, our ability to successfully
consummate the separation of Danaher into two public companies and
realize the anticipated benefits of that transaction, our
compliance with applicable laws and regulations (including
regulations relating to medical devices and the healthcare
industry) and changes in applicable laws and regulations, our
ability to effectively address cost reductions and other changes in
the healthcare industry, risks relating to potential impairment of
goodwill and other intangible assets, currency exchange rates, tax
audits and changes in our tax rate and income tax liabilities,
litigation and other contingent liabilities including intellectual
property and environmental, health and safety matters, risks
relating to product, service or software defects, product liability
and recalls, risks relating to product manufacturing, the impact of
our debt obligations on our operations and liquidity, our
relationships with and the performance of our channel partners,
commodity costs and surcharges, our ability to adjust purchases and
manufacturing capacity to reflect market conditions, reliance on
sole sources of supply, labor matters, international economic,
political, legal, compliance and business factors, disruptions
relating to man-made and natural disasters, security breaches or
other disruptions of our information technology systems and pension
plan costs. 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 2014 Annual Report on Form 10-K and Quarterly Report
on Form 10-Q for the second quarter of 2015. 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.
DANAHER
CORPORATION
|
CONSOLIDATED
CONDENSED STATEMENTS OF EARNINGS
|
($ and shares in
millions, except per share amounts)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 3,
2015
|
|
June 27,
2014
|
|
July 3,
2015
|
|
June 27,
2014
|
Sales
|
$
|
5,127.1
|
|
|
$
|
4,963.6
|
|
|
$
|
10,000.4
|
|
|
$
|
9,626.3
|
|
Cost of
sales
|
(2,366.9)
|
|
|
(2,343.4)
|
|
|
(4,640.2)
|
|
|
(4,553.2)
|
|
Gross
profit
|
2,760.2
|
|
|
2,620.2
|
|
|
5,360.2
|
|
|
5,073.1
|
|
Operating
costs:
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(1,484.2)
|
|
|
(1,394.5)
|
|
|
(2,970.9)
|
|
|
(2,745.1)
|
|
Research and
development expenses
|
(344.9)
|
|
|
(336.4)
|
|
|
(684.0)
|
|
|
(649.8)
|
|
Operating
profit
|
931.1
|
|
|
889.3
|
|
|
1,705.3
|
|
|
1,678.2
|
|
Non-operating income
(expense):
|
|
|
|
|
|
|
|
Other
income
|
—
|
|
|
19.2
|
|
|
—
|
|
|
19.2
|
|
Interest
expense
|
(29.8)
|
|
|
(33.2)
|
|
|
(60.0)
|
|
|
(65.7)
|
|
Interest
income
|
2.3
|
|
|
3.7
|
|
|
4.6
|
|
|
8.6
|
|
Earnings before
income taxes
|
903.6
|
|
|
879.0
|
|
|
1,649.9
|
|
|
1,640.3
|
|
Income
taxes
|
(208.0)
|
|
|
(202.6)
|
|
|
(384.5)
|
|
|
(384.2)
|
|
Net
earnings
|
$
|
695.6
|
|
|
$
|
676.4
|
|
|
$
|
1,265.4
|
|
|
$
|
1,256.1
|
|
Net earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.98
|
|
|
$
|
0.96
|
|
|
$
|
1.79
|
|
|
$
|
1.79
|
|
Diluted
|
$
|
0.97
|
|
|
$
|
0.95
|
|
|
$
|
1.76
|
|
|
$
|
1.76
|
|
Average common stock
and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
709.5
|
|
|
701.2
|
|
|
708.4
|
|
|
700.6
|
|
Diluted
|
719.6
|
|
|
715.6
|
|
|
719.2
|
|
|
715.2
|
|
This information is presented for reference
only. A complete copy of Danaher's Form 10-Q financial
statements is available on the Company's website
(www.danaher.com).
DANAHER
CORPORATION
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
Diluted Net
Earnings Per Share as Reported
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 3,
2015
|
|
June 27,
2014
|
|
July 3,
2015
|
|
June 27,
2014
|
Diluted Net
Earnings Per Share (GAAP)
|
$
|
0.97
|
|
|
$
|
0.95
|
|
|
$
|
1.76
|
|
|
$
|
1.76
|
|
Fair value
adjustments to Nobel Biocare acquisition-related inventory ($20
million pre-tax, $15 million after-tax) incurred in the three
months ended April 3, 2015
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Gain on sale of
marketable securities ($19 million pre-tax, $12 million after-tax)
in the three months ended June 27, 2014
|
—
|
|
|
(0.02)
|
|
|
—
|
|
|
(0.02)
|
|
Discrete income tax
charges ($17 million after-tax) incurred in the three months ended
July 3, 2015 in connection with the disposition of the
Communications Business (disposed of July 14, 2015)
|
0.02
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Other discrete income
tax items ($16 million after-tax) incurred in the three months
ended July 3, 2015
|
(0.02)
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
Amortization of
acquisition-related intangible assets in the three months ($107
million pre-tax, $82 million after-tax) and six months ($216
million pre-tax, $165 million after-tax) ended July 3, 2015 and for
the three months ($95 million pre-tax, $72 million after-tax) and
six months ($188 million pre-tax, $143 million after-tax) ended
June 27, 2014
|
0.11
|
|
|
0.10
|
|
|
0.23
|
|
|
0.20
|
|
Adjusted Diluted
Net Earnings Per Share (Non-GAAP)
|
$
|
1.08
|
|
|
$
|
1.03
|
|
|
$
|
2.01
|
|
|
$
|
1.94
|
|
Diluted Net
Earnings Per Share Reflecting the Communications Business (Disposed
of July 14, 2015) as a Discontinued Operation
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 3,
2015
|
|
June 27,
2014
|
|
July 3,
2015
|
|
June 27,
2014
|
Diluted Net
Earnings Per Share (GAAP)
|
$
|
0.97
|
|
|
$
|
0.95
|
|
|
$
|
1.76
|
|
|
$
|
1.76
|
|
(Income) Loss from
Discontinued Operations - Communications Business (disposed on July
14, 2015)
|
0.03
|
|
|
(0.01)
|
|
|
0.01
|
|
|
(0.06)
|
|
Diluted Net
Earnings Per Share From Continuing Operations reflecting the
Communications Business (disposed of July 14, 2015) as Discontinued
Operations (GAAP)
|
1.00
|
|
|
0.94
|
|
|
1.77
|
|
|
1.70
|
|
Fair value
adjustments to Nobel Biocare acquisition-related inventory ($20
million pre-tax, $15 million after-tax) incurred in the three
months ended April 3, 2015
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Gain on sale of
marketable securities ($19 million pre-tax, $12 million after-tax)
in the three months ended June 27, 2014
|
—
|
|
|
(0.02)
|
|
|
—
|
|
|
(0.02)
|
|
Other discrete income
tax items ($16 million after-tax) incurred in the three months
ended July 3, 2015
|
(0.02)
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
Amortization of
acquisition-related intangible assets in the three months ($99
million pre-tax, $76 million after-tax) and six months ($200
million pre-tax, $153 million after-tax) ended July 3, 2015 and for
the three months ($86 million pre-tax, $65 million after-tax) and
six months ($171 million pre-tax, $130 million after-tax) ended
June 27, 2014, in each case excluding amortization related to
intangible assets disposed of in connection with the Communications
Business disposition on July 14, 2015
|
0.10
|
|
|
0.09
|
|
|
0.21
|
|
|
0.18
|
|
Adjusted Diluted
Net Earnings Per Share From Continuing Operations Reflecting the
Communications Business (disposed of July 14, 2015) as Discontinued
Operations (Non-GAAP)
|
$
|
1.08
|
|
|
$
|
1.01
|
|
|
$
|
1.98
|
|
|
$
|
1.86
|
|
Forecasted Diluted
Earnings Per Share Guidance Which Reflects the Communications
Business (Disposed of July 14, 2015) as a Discontinued Operation in
All Periods
|
|
|
Three Months
Ending
October 2,
2015
|
|
Year
Ending
December 31,
2015
|
|
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
Diluted Net
Earnings Per Share From Continuing Operations (GAAP)
|
$
|
0.89
|
|
|
$
|
0.93
|
|
|
$
|
3.82
|
|
|
$
|
3.90
|
|
Fair value
adjustments to Nobel Biocare acquisition-related inventory ($20
million pre-tax, $15 million after-tax)
|
—
|
|
|
—
|
|
|
0.02
|
|
|
0.02
|
|
Other discrete income
tax items ($16 million after-tax) incurred in the three months
ended July 3, 2015
|
—
|
|
|
—
|
|
|
(0.02)
|
|
|
(0.02)
|
|
Amortization of
acquisition-related intangible assets in the three months ending
October 2, 2015 ($101 million pre-tax, $77 million after-tax) and
the year ending December 31, 2015 ($400 million pre-tax, $306
million after-tax) in each case excluding amortization related to
intangible assets disposed of in connection with the Communications
Business disposition on July 14, 2015
|
0.11
|
|
|
0.11
|
|
|
0.43
|
|
|
0.43
|
|
Adjusted Diluted
Net Earnings Per Share from Continuing Operations
(Non-GAAP)
|
$
|
1.00
|
|
|
$
|
1.04
|
|
|
$
|
4.25
|
|
|
$
|
4.33
|
|
Core Revenue
Growth
|
Components of Revenue
Growth
|
Three Months
Ended
July 3, 2015 vs.
Comparable 2014
Period
|
|
Six Months
Ended
July 3, 2015 vs.
Comparable 2014 Period
|
Core
(Non-GAAP)
|
3.5
|
%
|
|
4.0
|
%
|
Acquisitions
(Non-GAAP)
|
6.5
|
%
|
|
6.5
|
%
|
Impact of Currency
Translation (Non-GAAP)
|
(6.5)
|
%
|
|
(6.5)
|
%
|
Total Revenue Growth
(GAAP)
|
3.5
|
%
|
|
4.0
|
%
|
Adjusted Diluted Net Earnings Per Share
We disclose the non-GAAP measure of adjusted diluted net
earnings per share, which refers to GAAP diluted net earnings per
share, excluding the items identified in the reconciliation
schedule above. This non-GAAP measure should be considered in
addition to, and not as a replacement for or superior to, the
comparable GAAP measure, and may not be comparable to similarly
titled measures reported by other companies.
Management believes that this measure provides useful
information to investors by reflecting additional ways of viewing
aspects of Danaher's operations that, when reconciled to the
corresponding GAAP measure, helps our investors to better
understand the long-term profitability trends of our business, and
facilitates easier comparisons of our profitability to prior and
future periods and to our peers. The items described above
have been excluded from this measure because items of this nature
and/or size occur with inconsistent frequency, occur 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, which we
believe may obscure underlying business trends and make comparisons
of long-term performance difficult. The Company deems
acquisition-related transaction costs incurred in a given period to
be significant (generally relating to the Company's larger
acquisitions) if it determines that such costs exceed the range of
acquisition-related transaction costs typical for Danaher in a
given period.
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. The Communications Business will be treated as a
discontinued operation in the Company's financial reporting
beginning with the third quarter Form 10Q filed with the Securities
and Exchange Commission.
Core Revenue and Core Revenue Growth
We use the term "core revenue" or "sales from existing
businesses" to refer to GAAP revenue from existing operations
excluding (1) sales from acquired businesses recorded prior to the
first anniversary of the acquisition less the amount of sales
attributable to divested product lines not considered discontinued
operations ("acquisition sales"), and (2) the impact of currency
translation. The portion of GAAP revenue from existing operations
attributable to currency translation is calculated as the
difference between (a) the period-to-period change in 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" to refer to the measure of comparing
current period core revenue with the corresponding period of the
prior year. These non-GAAP measures should be considered in
addition to, and not as a replacement for or superior to, the
comparable GAAP measures, and may not be comparable to similarly
titled measures reported by other companies.
Management believes that these non-GAAP measures provide useful
information to investors by helping identify underlying growth
trends in our business and facilitating easier comparisons of our
revenue performance with prior and future periods and to our peers.
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 obscure underlying business trends.
We exclude the effect of acquisitions and divested product lines
because the nature, size and number of such transactions can vary
dramatically from period to period and between us and our peers,
which we believe may obscure underlying business trends and make
comparisons of long-term performance difficult.
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SOURCE Danaher Corporation