WASHINGTON, Oct. 22, 2015 /PRNewswire/ -- Danaher
Corporation (NYSE: DHR) today announced record results for the
third quarter 2015.
For the quarter ended October 2,
2015, non-GAAP adjusted diluted net earnings per share from
continuing operations were $1.05,
which reflects the adjustments identified in the attached
reconciliation schedule. On a GAAP basis, diluted net earnings from
continuing operations for the third quarter were $590 million, or $0.85 per diluted share. Revenue for the third
quarter 2015 increased 6.5% to $5.0
billion with core revenues increasing 3.0%.
The Company anticipates that non-GAAP, adjusted diluted net
earnings per share from continuing operations for the fourth
quarter 2015 will be in the range of $1.25
to $1.29.
Thomas P. Joyce, Jr., President
and Chief Executive Officer, stated, "Danaher had another good
quarter with solid core revenue growth, free cash flow and earnings
performance. In a challenging global macro environment, we've
continued to enhance our businesses through organic growth
initiatives and strategic acquisitions, most notably Pall. As we
move forward, we believe the strength of our portfolio, combined
with our team's steadfast execution through the Danaher Business
System, will help us continue to deliver strong operating results
and shareholder value."
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 888-215-6894
within the U.S. or by dialing 913-312-1434 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 357158). A replay of the
conference call will be available shortly after the conclusion of
the call and until Thursday, October 29,
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 357158. In addition, presentation materials relating to
Danaher's results have been posted to the "Investors" section of
Danaher's website under the subheading "Events &
Presentations."
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. Our family of world-class brands
has leadership positions in some of the most demanding and
attractive industries, including health care, environmental and
industrial. The Company's globally diverse team of approximately
80,000 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 from continuing operations
for the fourth quarter 2015, the anticipated impact from the
Company's growth investments and strategic acquisitions, the
Company's operating results and shareholder value, 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 integrate the recent 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 third 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
|
|
Nine Months
Ended
|
|
October 2,
2015
|
|
September 26,
2014
|
|
October 2,
2015
|
|
September 26,
2014
|
Sales
|
$
|
5,023.4
|
|
|
$
|
4,707.1
|
|
|
$
|
14,678.3
|
|
|
$
|
13,929.8
|
Cost of
sales
|
(2,386.4)
|
|
|
(2,254.8)
|
|
|
(6,929.1)
|
|
|
(6,699.6)
|
Gross
profit
|
2,637.0
|
|
|
2,452.3
|
|
|
7,749.2
|
|
|
7,230.2
|
Operating
costs:
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(1,528.3)
|
|
|
(1,298.0)
|
|
|
(4,346.9)
|
|
|
(3,894.1)
|
Research and
development expenses
|
(307.9)
|
|
|
(288.1)
|
|
|
(912.0)
|
|
|
(856.3)
|
Operating
profit
|
800.8
|
|
|
866.2
|
|
|
2,490.3
|
|
|
2,479.8
|
Non-operating income
(expense):
|
|
|
|
|
|
|
|
Other
income
|
12.4
|
|
|
38.2
|
|
|
12.4
|
|
|
57.4
|
Interest
expense
|
(45.3)
|
|
|
(29.6)
|
|
|
(103.7)
|
|
|
(93.4)
|
Interest
income
|
0.6
|
|
|
3.6
|
|
|
5.3
|
|
|
12.2
|
Earnings from
continuing operations before income taxes
|
768.5
|
|
|
878.4
|
|
|
2,404.3
|
|
|
2,456.0
|
Income
taxes
|
(178.5)
|
|
|
(197.1)
|
|
|
(540.8)
|
|
|
(562.4)
|
Net earnings from
continuing operations
|
590.0
|
|
|
681.3
|
|
|
1,863.5
|
|
|
1,893.6
|
Earnings (loss) from
discontinued operations, net of income taxes
|
813.3
|
|
|
(0.7)
|
|
|
805.3
|
|
|
43.1
|
Net
earnings
|
$
|
1,403.3
|
|
|
$
|
680.6
|
|
|
$
|
2,668.8
|
|
|
$
|
1,936.7
|
Net earnings per
share from continuing operations:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.86
|
|
|
$
|
0.97
|
|
|
$
|
2.66
|
|
|
$
|
2.70
|
Diluted
|
$
|
0.85
|
|
|
$
|
0.95
|
|
|
$
|
2.62
|
|
|
$
|
2.65
|
Net earnings per
share from discontinued operations:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.18
|
|
|
$
|
—
|
|
|
$
|
1.15
|
|
|
$
|
0.06
|
Diluted
|
$
|
1.16
|
|
|
$
|
—
|
|
|
$
|
1.13
|
|
|
$
|
0.06
|
Net earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
2.04
|
|
|
$
|
0.97
|
|
|
$
|
3.80
|
|
*
|
$
|
2.76
|
Diluted
|
$
|
2.01
|
|
|
$
|
0.95
|
|
|
$
|
3.75
|
|
|
$
|
2.71
|
Average common stock
and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
688.5
|
|
|
702.6
|
|
|
701.7
|
|
|
701.3
|
Diluted
|
698.7
|
|
|
716.2
|
|
|
712.3
|
|
|
715.6
|
|
|
|
|
|
|
|
|
* Earnings per share
amount does not add due to rounding.
|
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 From Continuing Operations
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
October 2,
2015
|
|
September 26,
2014
|
|
October 2,
2015
|
|
September 26,
2014
|
Diluted Net
Earnings Per Share From Continuing Operations
(GAAP)
|
$
|
0.85
|
|
|
$
|
0.95
|
|
|
$
|
2.62
|
|
|
$
|
2.65
|
|
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
|
|
|
—
|
|
Acquisition-related
transaction costs deemed significant ($21 million pre-tax, $16
million after-tax), change in control payments, and fair value
adjustments to inventory balances ($47 million pre-tax, $36 million
after-tax), in each case related to the acquisition of Pall
Corporation and incurred in the three months ended October 2,
2015
|
0.07
|
|
|
—
|
|
|
0.07
|
|
|
—
|
|
Gain on sale of
marketable securities in the three months ended October 2, 2015
($12 million pre-tax, $8 million after-tax) and in the three months
ended June 27, 2014 ($19 million pre-tax, $12 million
after-tax)
|
(0.01)
|
|
|
—
|
|
|
(0.01)
|
|
|
(0.02)
|
|
Costs incurred in the
three months ended October 2, 2015 ($9 million pre-tax, $7 million
after-tax) related to preparation for Danaher's 2016
separation
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
Gain on sale of a
product line ($34 million pre-tax, $26 million after-tax) in the
three months ended September 26, 2014
|
—
|
|
|
(0.04)
|
|
|
—
|
|
|
(0.04)
|
|
Discrete income tax
items incurred in the three months ended July 3, 2015 ($16 million)
and the three months ended September 26, 2014 ($8
million)
|
—
|
|
|
(0.01)
|
|
|
(0.02)
|
|
|
(0.01)
|
|
Amortization of
acquisition-related intangible assets in the three months ($120
million pre-tax, $92 million after-tax) and nine months ($320
million pre-tax, $246 million after-tax) ended October 2, 2015 and
in the three months ($90 million pre-tax, $69 million after-tax)
and nine months ($260 million pre-tax, $199 million after-tax)
ended September 26, 2014
|
0.13
|
|
|
0.09
|
|
|
0.34
|
|
|
0.27
|
|
Adjusted Diluted
Net Earnings Per Share From Continuing Operations
(Non-GAAP)
|
$
|
1.05
|
|
|
$
|
0.99
|
|
|
$
|
3.03
|
|
|
$
|
2.85
|
|
Forecasted Diluted
Earnings Per Share From Continuing Operations
|
|
|
|
|
|
|
|
Three Months
Ending
December 31, 2015
|
|
Three Months
Ended
December 31,
2014
|
|
Low
End
|
|
High
End
|
|
Diluted Net
Earnings Per Share From Continuing Operations
(GAAP)
|
$
|
0.99
|
|
|
$
|
1.03
|
|
|
$
|
0.90
|
|
Acquisition-related
fair value adjustments to inventory and deferred revenue balances
($65 million pre-tax, $50 million after-tax), in each case related
to the acquisition of Pall Corporation and to be incurred in the
three months ending December 31, 2015
|
0.07
|
|
|
0.07
|
|
|
—
|
|
Costs to be incurred
in the three months ending December 31, 2015 ($13 million pre-tax,
$10 million after-tax) related to preparation for Danaher's 2016
separation
|
0.01
|
|
|
0.01
|
|
|
—
|
|
Impact of discrete
income tax items in 2014 and lower than expected effective tax rate
(due primarily to year-end 2014 tax law changes) in the three
months ended December 31, 2014
|
—
|
|
|
—
|
|
|
0.09
|
|
Gain on sale of
marketable equity securities in the three months ended December 31,
2014 ($99 million pre-tax, $62 million after-tax)
|
—
|
|
|
—
|
|
|
(0.09)
|
|
Restructuring charges
in excess of amounts originally budgeted and publicly communicated
in December 2013 for the three months ended December 31, 2014 ($91
million pre-tax and $70 million after-tax)
|
—
|
|
|
—
|
|
|
0.10
|
|
Acquisition-related
transaction costs deemed significant ($12 million pre-tax, $9
million after-tax) and fair value adjustments to acquisition
related inventory ($5 million pre-tax, $4 million after-tax) for
the three months ended December 31, 2014 in each case incurred in
connection with the acquisition of Nobel Biocare
|
—
|
|
|
—
|
|
|
0.02
|
|
Amortization of
acquisition-related intangible assets in the three months ($162
million pre-tax, $124 million after-tax) ending December 31, 2015
and in the three months ($92 million pre-tax, $70 million
after-tax) ended December 31, 2014
|
0.18
|
|
|
0.18
|
|
|
0.10
|
|
Adjusted Diluted
Net Earnings Per Share from Continuing Operations
(Non-GAAP)
|
$
|
1.25
|
|
|
$
|
1.29
|
|
|
$
|
1.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change
|
|
12
|
%
|
|
|
15
|
%
|
|
|
|
|
Core Revenue
Growth
|
|
|
|
|
|
|
|
Components of Revenue
Growth
|
Three Months
Ended
October 2, 2015 vs.
Comparable 2014
Period
|
|
Nine Months
Ended
October 2, 2015 vs.
Comparable 2014
Period
|
Core
(Non-GAAP)
|
3.0
|
%
|
|
4.0
|
%
|
Acquisitions
(Non-GAAP)
|
10.5
|
%
|
|
8.0
|
%
|
Impact of Currency
Translation (Non-GAAP)
|
(7.0)
|
%
|
|
(6.5)
|
%
|
Total Revenue Growth
(GAAP)
|
6.5
|
%
|
|
5.5
|
%
|
Adjusted Diluted Net Earnings Per Share From Continuing
Operations
We disclose the non-GAAP measure of adjusted diluted net
earnings per share from continuing operations, which refers to GAAP
diluted net earnings per share from continuing operations,
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.
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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visit:http://www.prnewswire.com/news-releases/danaher-reports-record-third-quarter-2015-results-300164429.html
SOURCE Danaher Corporation