WASHINGTON, Jan. 28, 2021 /PRNewswire/ -- Danaher
Corporation (NYSE: DHR) (the "Company") today announced results for
the fourth quarter and full year 2020. All results in this
release reflect only continuing operations unless otherwise
noted.
For the quarter ended December 31,
2020, net earnings were $1.2
billion, or $1.66 per diluted
common share which represents a 55.0% year-over-year increase from
the comparable 2019 period.
Non-GAAP adjusted diluted net earnings per common share for the
fourth quarter 2020 were $2.08 which
represents a 62.5% increase over the comparable 2019 period.
For the fourth quarter 2020, revenues increased 39.0%
year-over-year to $6.8 billion, with
15.5% non-GAAP core revenue growth including Cytiva.
For the full year 2020, net earnings were $3.6 billion, or $4.89 per diluted common share which represents a
50.0% year-over-year increase. Non-GAAP adjusted diluted net
earnings per common share for 2020 were $6.31 per share, which represents a 43.0%
increase over the comparable 2019 amount. Revenues for the
full year 2020 increased 24.5% to $22.3
billion, with 9.5% non-GAAP core revenue growth including
Cytiva.
Operating cash flow for the full year 2020 was $6.2 billion, representing a 70.0% increase
year-over-year, and non-GAAP free cash flow was $5.4 billion, representing a 79.0% increase
year-over-year.
For the first quarter 2021 the Company anticipates that non-GAAP
core revenue growth including Cytiva will be in the mid to
high-teens range.
For the full year 2021, the Company anticipates non-GAAP core
revenue growth including Cytiva will be in the low-double digit
range.
Rainer M. Blair, President and
Chief Executive Officer, stated, "For the full year 2020, we
achieved nearly 10% core revenue growth including Cytiva, strong
margin expansion, and more than $5
billion of free cash flow. But our financial results only
tell part of the story. Despite many unforeseen challenges as a
result of the COVID-19 pandemic, our team turned the challenges we
faced into impactful opportunities to support our customers and the
global community. We're proud to play a pivotal role in the fight
against COVID-19, and our 2020 results are a testament to our
team's commitment and perseverance."
Blair added, "2020 was also a transformative year for Danaher
with the addition of Cytiva—the largest acquisition in our
Company's history and one that has strengthened our position as a
global science and technology leader. Going forward, we believe the
combination of our portfolio, innovative team, and strong balance
sheet—all powered by the Danaher Business System—positions us to
deliver sustainable, long-term shareholder value for many 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 "Events &
Presentations." 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 866-503-8675
within the U.S. or by dialing +1 786-815-8792 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 earnings conference call (access code 7971317). A
replay of the conference call will be available shortly after the
conclusion of the call and until February
11, 2021. You can access the replay dial-in
information on the "Investors" section of Danaher's website under
the subheading "Events & Presentations." In addition,
presentation materials relating to Danaher's results have been
posted to the "Investors" section of Danaher's website under the
subheading "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
has leadership positions in the demanding and attractive health
care, environmental and applied end-markets. With more than 20
operating companies, Danaher's globally diverse team of
approximately 69,000 associates is united by a common culture and
operating system, the Danaher Business System, and its Shared
Purpose, Helping Realize Life's Potential. For more
information, please visit www.danaher.com.
NON-GAAP MEASURES
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), this earnings
release also contains non-GAAP financial measures.
Calculations of these 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, as
applicable, and other information relating to these non-GAAP
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
financial performance for the first quarter and full year 2021,
role in the fight against COVID-19, positioning to deliver
long-term 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, the highly uncertain and
unpredictable severity, magnitude and duration of the COVID-19
pandemic (and the related governmental, business and community
responses thereto) on our business, results of operations and
financial condition, Danaher's ability to successfully integrate
the operations and employees of the Biopharma business Danaher
acquired from General Electric Company (now known as Cytiva) with
Danaher's existing business, the ability to realize anticipated
financial, tax and operational synergies and benefits from such
acquisition, Cytiva's performance and maintenance of important
business relationships, the impact of our debt obligations
(including the debt incurred to finance the acquisition of Cytiva)
on our operations and liquidity, deterioration of or instability in
the economy, the markets we serve and the financial markets
(including as a result of the COVID-19 pandemic), developments and
uncertainties in U.S. policy stemming from the U.S. administration,
such as changes in U.S. trade and tariff policies and the reaction
of other countries thereto, 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 compliance with
applicable laws and regulations (including regulations relating to
medical devices and the health care industry), the results of our
clinical trials and perceptions thereof, our ability to effectively
address cost reductions and other changes in the health care
industry, our ability to successfully identify and consummate
appropriate acquisitions and strategic investments and successfully
complete divestitures and other dispositions, our ability to
integrate the businesses we acquire and achieve the anticipated
benefits of such acquisitions, contingent liabilities relating to
acquisitions, investments and divestitures (including tax-related
and other contingent liabilities relating to past and future IPOs,
split-offs or spin-offs), security breaches or other disruptions of
our information technology systems or violations of data privacy
laws, the impact of our restructuring activities on our ability to
grow, 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, changes in tax laws
applicable to multinational companies, litigation and other
contingent liabilities including intellectual property and
environmental, health and safety matters, the rights of
the United States government to
use, disclose and license certain intellectual property we license
if we fail to commercialize it, risks relating to product, service
or software defects, product liability and recalls, risks relating
to product manufacturing, our relationships with and the
performance of our channel partners, uncertainties relating to
collaboration arrangements with third-parties, commodity costs and
surcharges, our ability to adjust purchases and manufacturing
capacity to reflect market conditions, reliance on sole sources of
supply, the impact of deregulation on demand for our products and
services, labor matters, international economic, political, legal,
compliance and business factors (including the impact of the
United Kingdom's separation from
the EU and remaining uncertainty relating to the terms of such
separation), disruptions relating to man-made and natural disasters
(including pandemics such as COVID-19) 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 2019 Annual Report
on Form 10-K and our first, second and third quarter 2020 Quarterly
Reports on Form 10-Q. These forward-looking statements speak only
as of the date of this release and except to the extent required by
applicable law, 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
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
|
Adjusted Diluted
Net Earnings Per Common Share from Continuing
Operations 1
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
December 31,
2020
|
|
December 31,
2019
|
|
December 31,
2020
|
|
December 31,
2019
|
Diluted Net
Earnings Per Common Share from Continuing Operations
(GAAP)
|
$
|
1.66
|
|
|
$
|
1.07
|
|
|
$
|
4.89
|
|
|
$
|
3.26
|
|
Pretax amortization
of acquisition-related intangible assets A
|
0.45
|
|
|
0.21
|
|
|
1.55
|
|
|
0.85
|
|
Pretax
acquisition-related fair value adjustments to inventory and
deferred revenue, incremental transaction costs deemed significant
and integration preparation costs, in each case related to the
acquisition of Cytiva B
|
0.06
|
|
|
0.04
|
|
|
0.77
|
|
|
0.13
|
|
Loss on early
extinguishment of debt C
|
0.04
|
|
|
0.01
|
|
|
0.04
|
|
|
0.01
|
|
Loss on partial
settlement of a defined benefit plan D
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.01
|
|
Pretax impairment
charges related to a facility in the Diagnostics segment in the
first quarter of 2020, trade name and other intangible assets in
the Environmental & Applied Solutions segment in the first
quarter of 2020 and trade names in the Environmental & Applied
Solutions segment in the third of quarter 2020
E
|
—
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
Pretax fair value
(gains) and losses on the Company's equity and limited partnership
investments F
|
(0.04)
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
Gain on the sale of
certain product lines in the Life Sciences segment in the second
quarter of 2020 G
|
—
|
|
|
—
|
|
|
(0.62)
|
|
|
—
|
|
Tax effect of all
adjustments reflected above H
|
(0.10)
|
|
|
(0.05)
|
|
|
(0.27)
|
|
|
(0.17)
|
|
Discrete tax
adjustments and other tax-related adjustments
I
|
—
|
|
|
(0.02)
|
|
|
(0.12)
|
|
|
0.29
|
|
Declared dividends on
the MCPS assuming "if-converted" method J
|
0.01
|
|
|
0.01
|
|
|
0.06
|
|
|
0.04
|
|
Adjusted Diluted
Net Earnings Per Common Share from Continuing Operations
(Non-GAAP)
|
$
|
2.08
|
|
|
$
|
1.28
|
|
|
$
|
6.31
|
|
|
$
|
4.42
|
|
|
|
1
|
Each of the per share
adjustment amounts above have been calculated assuming the
Mandatory Convertible Preferred Stock ("MCPS") had been converted
into shares of common stock.
|
Adjusted Average
Common Stock and Common Equivalent Diluted Shares
Outstanding
|
(shares in
millions)
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
December 31,
2020
|
|
December 31,
2019
|
|
December 31,
2020
|
|
December 31,
2019
|
Average common stock
and common equivalent shares outstanding - diluted
|
724.5
|
|
|
726.3
|
|
|
718.7
|
|
|
725.5
|
|
Converted shares
2
|
19.6
|
|
|
11.0
|
|
|
17.1
|
|
|
9.7
|
|
Adjusted average
common stock and common equivalent shares outstanding -
diluted
|
744.1
|
|
|
737.3
|
|
|
735.8
|
|
|
735.2
|
|
|
|
2
|
The number of
converted shares assumes the conversion of all MCPS and issuance of
the underlying shares applying the "if-converted" method of
accounting and using an average 20 trading-day trailing volume
weighted average price ("VWAP") of $223.43 and $150.10 as of
December 31, 2020 and December 31, 2019, respectively.
|
See the accompanying Notes to Reconciliation of
GAAP to Non-GAAP Financial Measures
Core Sales Growth
and Core Sales Growth Including Cytiva
|
|
|
% Change
Three-Month
Period Ended December
31, 2020 vs. Comparable
2019 Period
|
|
% Change Year
Ended
December 31, 2020 vs.
Comparable 2019 Period
|
Total sales growth
(GAAP)
|
39.0
|
%
|
|
24.5
|
%
|
Impact of:
|
|
|
|
Acquisitions/divestitures
|
(24.5)
|
%
|
|
(18.0)
|
%
|
Currency exchange
rates
|
(2.5)
|
%
|
|
—
|
%
|
Core sales growth
(non-GAAP)
|
12.0
|
%
|
|
6.5
|
%
|
Impact of Cytiva
sales growth (net of divested product lines)
|
3.5
|
%
|
|
3.0
|
%
|
Core sales growth
including Cytiva (non-GAAP)
|
15.5
|
%
|
|
9.5
|
%
|
Forecasted Core
Sales Growth and Core Sales Growth Including
Cytiva 3
|
|
|
% Change
Three-Month
Period Ending April 2,
2021 vs. Comparable 2020
Period
|
|
% Change Year
Ending
December 31, 2021 vs.
Comparable 2020 Period
|
Core sales growth
(non-GAAP)
|
+High-single to
low-double digit
|
|
+High-single to
low-double digit
|
Impact of Cytiva
sales growth (net of divested product lines)
|
>500
bps
|
|
>100
bps
|
Core sales growth
including Cytiva (non-GAAP)
|
+Mid to
high-teens
|
|
+Low-double
digit
|
|
|
3
|
We do not reconcile
these measures to the comparable GAAP measure because of the
inherent difficulty in predicting and estimating the future impact
and timing of currency translation, acquisitions and divested
product lines, which would be reflected in any forecasted GAAP
revenue.
|
Free Cash Flow
from Continuing Operations
|
($ in
millions)
|
|
|
Year
Ended
|
|
Year-over-Year
Change
|
|
December 31,
2020
|
|
December 31,
2019
|
|
Cash Flows from
(used in) Continuing Operations:
|
|
|
|
|
|
Operating Cash Flows
from Continuing Operations (GAAP)
|
$
|
6,215
|
|
|
$
|
3,657
|
|
|
|
Investing Cash Flows
used in Continuing Operations (GAAP)
|
$
|
(21,239)
|
|
|
$
|
(1,166)
|
|
|
|
Financing Cash Flows
from Continuing Operations (GAAP)
|
$
|
1,006
|
|
|
$
|
16,589
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
from Continuing Operations:
|
|
|
|
|
|
Operating Cash Flows
from Continuing Operations (GAAP)
|
$
|
6,215
|
|
|
$
|
3,657
|
|
|
~ 70.0%
|
Less: payments for
additions to property, plant and equipment (capital expenditures)
from continuing operations (GAAP)
|
(791)
|
|
|
(636)
|
|
|
|
Plus: proceeds from
sales of property, plant and equipment (capital disposals) from
continuing operations (GAAP)
|
2
|
|
|
13
|
|
|
|
Free Cash Flow from
Continuing Operations (Non-GAAP)
|
$
|
5,426
|
|
|
$
|
3,034
|
|
|
~ 79.0%
|
We define free cash flow as operating cash flows from continuing
operations, less payments for additions to property, plant and
equipment from continuing operations ("capital expenditures") plus
the proceeds from sales of plant, property and equipment from
continuing operations ("capital disposals").
See the accompanying Notes to Reconciliation of
GAAP to Non-GAAP Financial Measures
Notes to Reconciliation of GAAP to Non-GAAP
Financial Measures
A
|
Amortization of
acquisition-related intangible assets in the following historical
periods ($ in millions) (only the pretax amounts set forth below
are reflected in the amortization line item above):
|
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
December 31,
2020
|
|
December 31,
2019
|
|
December 31,
2020
|
|
December 31,
2019
|
Pretax
|
$
|
336
|
|
|
$
|
156
|
|
|
$
|
1,138
|
|
|
$
|
625
|
|
After-tax
|
270
|
|
|
125
|
|
|
915
|
|
|
504
|
|
|
|
B
|
Pretax costs incurred
for fair value adjustments to inventory and deferred revenue
related to the acquisition of Cytiva in the three-month period
ended December 31, 2020, ($49 million pretax as reported in this
line item, $39 million after-tax) and fair value adjustments to
inventory and deferred revenue, transaction costs deemed
significant and integration preparation costs related to the
acquisition of Cytiva for the year ended December 31, 2020, ($568
million pretax as reported in this line item, $450 million
after-tax). Pretax costs incurred for transaction costs
deemed significant and integration preparation costs related to the
acquisition of Cytiva in the three-month period ended December 31,
2019, ($30 million pretax as reported in this line item, $27
million after-tax) and the year ended December 31, 2019, ($93
million pretax as reported in this line item, $84 million
after-tax). 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.
|
|
|
C
|
Loss on early
extinguishment of debt resulting from "make-whole" payments
associated with the retirement of the 2022 Euronotes ($26 million
pretax as reported in this line item, $20 million after-tax) in
both the three-month period and year ended December 31, 2020 and
the 2020 U.S. Notes and the 2020 Assumed Pall Notes ($7 million
pretax as reported in this line item, $5 million after-tax) in both
the three-month period and year ended December 31, 2019.
|
|
|
D
|
Loss on partial
settlement of a defined benefit plan resulting from the transfer of
a portion of Danaher's non-U.S. pension liabilities to a third
party ($7 million pretax as reported in this line item, $6 million
after-tax) in both the three-month period and year ended December
31, 2019.
|
|
|
E
|
Pretax impairment
charges related to a facility in the Diagnostics segment, trade
name and other intangible assets in the Environmental & Applied
Solutions segment in the first quarter of 2020 ($8 million pretax
as reported in this line item, $6 million after-tax) and trade
names in the Environmental & Applied Solutions segment in the
third quarter of 2020 ($14 million pretax as reported in this line
item, $11 million after-tax).
|
|
|
F
|
Pretax fair value
(gains) and losses on the Company's equity and limited partnership
investments recorded in the three-month period ($31 million pretax
as reported in this line item, $24 million after-tax) and year
ended December 31, 2020 ($18 million pretax as reported in this
line item, $14 million after-tax).
|
|
|
G
|
Pretax gain on the
sale of certain product lines in the Life Sciences segment in the
year ended December 31, 2020 ($455 million pretax as reported in
this line item, $305 million after-tax).
|
|
|
H
|
This line item
reflects the aggregate tax effect of all nontax adjustments
reflected in the preceding line items of the table. In
addition, the footnotes above indicate the after-tax amount of each
individual adjustment item. Danaher estimates the tax effect
of each adjustment item by applying Danaher's overall estimated
effective tax rate to the pretax 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 MCPS
dividends are not tax deductible and therefore the tax effect of
the adjustments does not include any tax impact of the MCPS
dividends.
|
|
|
I
|
Discrete tax
adjustments and other tax-related adjustments for the year ended
December 31, 2020, include the impact of net discrete tax gains of
$85 million (or $0.12 per diluted common share), related primarily
to the release of reserves for uncertain tax positions from audit
settlements and expiration of statutes of limitation and excess tax
benefits from stock-based compensation, partially offset by a
higher tax rate associated with the gain on the divestiture of
certain product lines in the Life Sciences segment and changes in
estimates associated with prior period uncertain tax
positions. Discrete tax adjustments and other tax-related
adjustments for the three-month period and year ended December 31,
2019, include the impact of net discrete tax gains of $12 million
(or $0.02 per diluted common share) and discrete tax charges of
$215 million (or $0.29 per diluted common share),
respectively. The discrete tax matters for the three-month
period and year ended December 31, 2019 relate primarily to changes
in estimates associated with prior period uncertain tax positions
and audit settlements, net of the release of valuation allowances
associated with certain foreign tax credits and tax benefits
resulting from a change in law. The Company anticipates
excess tax benefits from stock compensation of approximately $7
million per quarter and therefore excludes benefits in excess of
this amount in the calculation of adjusted diluted net earnings per
common share from continuing operations.
|
|
|
J
|
In March 2019, the
Company issued $1.65 billion in aggregate liquidation preference of
4.75% MCPS. In May 2020, the Company issued $1.72 billion in
aggregate liquidation preference of 5.0% MCPS. Dividends on
the 4.75% and 5.0% MCPS are payable on a cumulative basis at an
annual rate of 4.75% and 5.0%, respectively, on the liquidation
preference of $1,000 per share. Unless earlier converted,
each share of 4.75% MCPS will automatically convert on April 15,
2022 into between 6.6563 and 8.1538 shares of Danaher's common
stock, subject to further anti-dilution adjustments. Unless
earlier converted, each share of 5.0% MCPS will automatically
convert on April 15, 2023 into between 5.0081 and 6.1349 shares of
Danaher's common stock, subject to further anti-dilution
adjustments. The number of shares of Danaher's common stock
issuable on conversion of the MCPS will be determined based on the
VWAP per share of the Company's common stock over the 20
consecutive trading day period beginning on, and including, the
21st scheduled trading day immediately before April 15, 2022 and
April 15, 2023 for the 4.75% and 5.0% MCPS, respectively. For
the purposes of calculating adjusted earnings per share, the
Company has excluded the paid and anticipated MCPS cash dividends
and assumed the "if-converted" method of share dilution (the
incremental shares of common stock deemed outstanding applying the
"if-converted" method of calculating share dilution are referred to
as the "Converted Shares".)
|
Statement Regarding Non-GAAP Measures
Each of the non-GAAP measures set forth in this file 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 these measures provide useful information
to investors by offering additional ways of viewing Danaher
Corporation's ("Danaher" or the "Company") results that, when
reconciled to the corresponding GAAP measure, help our investors
to:
- with respect to adjusted diluted net earnings per common share,
understand the long-term profitability trends of our business and
compare our profitability to prior and future periods and to our
peers;
- with respect to core sales, identify underlying growth trends
in our business and compare our sales performance with prior and
future periods and to our peers; and
- with respect to free cash flow, understand Danaher's ability to
generate cash without external financings, strengthen its balance
sheet, invest in its business and grow its business through
acquisitions and other strategic opportunities (although a
limitation of free cash flow is that it does not take into account
the Company's debt service requirements and other non-discretionary
expenditures, and as a result the entire free cash flow amount is
not necessarily available for discretionary expenditures).
We also present core sales on a basis that includes sales
attributable to Cytiva (formerly the Biopharma Business of General
Electric Company's ("GE") Life Sciences business), which Danaher
acquired from GE on March 31,
2020. Historically Danaher has calculated core sales solely
on a basis that excludes sales from acquired businesses recorded
prior to the first anniversary of the acquisition. However,
given Cytiva's significant size and historical core sales growth
rate, in each case compared to Danaher's existing businesses,
management believes it is appropriate to also present core sales on
a basis that includes Cytiva sales. Management believes this
presentation provides useful information to investors by
demonstrating the impact Cytiva has on the Company's current growth
profile, rather than waiting to demonstrate such impact 12 months
after the acquisition when Cytiva would normally have been included
in Danaher's core sales calculation. Danaher calculates
period-to-period core sales growth including Cytiva by adding to
the baseline period sales Cytiva's historical sales from such
period (when it was owned by GE, as applicable), net of the sales
of the divested product lines and also adding the Cytiva sales to
the current period.
Management uses these non-GAAP measures to measure the Company's
operating and financial performance, and uses core sales and
non-GAAP measures similar to adjusted diluted net earnings per
common share and free cash flow in the Company's executive
compensation program.
- The items we exclude from adjusted diluted net earnings per
common share are excluded for the following reasons:
-
- Amortization of Intangible Assets. We exclude the
amortization of acquisition-related intangible assets because the
amount and timing of such charges are significantly impacted by the
timing, size, number and nature of the acquisitions we consummate.
While we have a history of significant acquisition activity we do
not acquire businesses on a predictable cycle, and the amount of an
acquisition's purchase price allocated to intangible assets and
related amortization term are unique to each acquisition and can
vary significantly from acquisition to acquisition. Exclusion of
this amortization expense facilitates more consistent comparisons
of operating results over time between our newly acquired and
long-held businesses, and with both acquisitive and non-acquisitive
peer companies. We believe however that it is important for
investors to understand that such intangible assets contribute to
sales generation and that intangible asset amortization related to
past acquisitions will recur in future periods until such
intangible assets have been fully amortized.
- Restructuring Charges. We exclude costs incurred
pursuant to discrete restructuring plans that are fundamentally
different (in terms of the size, strategic nature and planning
requirements, as well as the inconsistent frequency, of such plans)
from the ongoing productivity improvements that result from
application of the Danaher Business System. Because these
restructuring plans are incremental to the core activities that
arise in the ordinary course of our business and we believe are not
indicative of Danaher's ongoing operating costs in a given period,
we exclude these costs to facilitate a more consistent comparison
of operating results over time.
- Other Adjustments. With respect to the other items
excluded (as applicable), we exclude these items because they are
of a nature and/or size that occur with inconsistent frequency,
occur for reasons that may be unrelated to Danaher's commercial
performance during the period and/or we believe that such items may
obscure underlying business trends and make comparisons of
long-term performance difficult.
- With respect to adjusted average common stock and common
equivalent shares outstanding, Danaher's Mandatory Convertible
Preferred Stock ("MCPS") will mandatorily convert into Danaher
common stock on the mandatory conversion date, which is expected to
be April 15, 2022 and April 15, 2023 for the 4.75% and 5.0% MCPS,
respectively (unless converted or redeemed earlier in accordance
with the terms of the applicable certificate of designations). In
this file, we use this measure to present the earnings per
share-related non-GAAP measures on a basis that assumes the MCPS
had already been converted as of the beginning of the applicable
period (and accordingly also exclude the dividends that were
actually paid on the MCPS during such period, since such dividends
would no longer be paid once the MCPS convert). We believe this
presentation provides useful information to investors by helping
them understand what the net impact will be on Danaher's earnings
per share-related non-GAAP measures once the MCPS convert into
Danaher common stock.
- With respect to core sales and core sales including Cytiva, (1)
we exclude the impact of currency translation because it is not
under management's control, is subject to volatility and can
obscure underlying business trends, and (2) we exclude the effect
of acquisitions (other than Cytiva, in the case of core sales
including Cytiva) and divested product lines because the timing,
size, number and nature of such transactions can vary significantly
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.
- With respect to the free cash flow, we exclude payments for
additions to property, plant and equipment (net of the proceeds
from capital disposals) to demonstrate the amount of operating cash
flow for the period that remains after accounting for the Company's
capital expenditure requirements.
- With respect to forecasted core sales and forecasted core sales
including Cytiva, we do not reconcile these measures to the
comparable GAAP measure because of the inherent difficulty in
predicting and estimating the future impact and timing of currency
translation, acquisitions and divested product lines, which would
be reflected in any forecasted GAAP revenue.
DANAHER
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS (unaudited)
|
($ in millions,
except per share amount)
|
|
|
As of December
31
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
equivalents
|
$
|
6,035
|
|
|
$
|
19,912
|
|
Trade accounts
receivable, less allowance for doubtful accounts of $132 as of
December 31, 2020 and $104 as of December 31, 2019
|
4,045
|
|
|
3,191
|
|
Inventories
|
2,292
|
|
|
1,628
|
|
Prepaid expenses and
other current assets
|
1,430
|
|
|
865
|
|
Total current
assets
|
13,802
|
|
|
25,596
|
|
Property, plant and
equipment, net
|
3,262
|
|
|
2,302
|
|
Other long-term
assets
|
2,395
|
|
|
1,721
|
|
Goodwill
|
35,420
|
|
|
22,713
|
|
Other intangible
assets, net
|
21,282
|
|
|
9,750
|
|
Total
assets
|
$
|
76,161
|
|
|
$
|
62,082
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Notes payable and
current portion of long-term debt
|
$
|
11
|
|
|
$
|
212
|
|
Trade accounts
payable
|
2,049
|
|
|
1,515
|
|
Accrued expenses and
other liabilities
|
5,342
|
|
|
3,205
|
|
Total current
liabilities
|
7,402
|
|
|
4,932
|
|
Other long-term
liabilities
|
7,789
|
|
|
5,351
|
|
Long-term
debt
|
21,193
|
|
|
21,517
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock, no
par value, 15.0 million shares authorized; 1.65 million shares of
4.75% Mandatory Convertible Preferred Stock, Series A, issued and
outstanding as of December 31, 2020 and December 31, 2019; 1.72
million shares of 5.00% Mandatory Convertible Preferred Stock,
Series B, issued and outstanding as of December 31, 2020 and no
shares issued or outstanding as of December 31, 2019
|
3,268
|
|
|
1,600
|
|
Common stock - $0.01
par value, 2.0 billion shares authorized; 851.3 million issued and
711.0 million outstanding as of December 31, 2020; 835.5 million
issued and 695.5 million outstanding as of December 31,
2019
|
9
|
|
|
8
|
|
Additional paid-in
capital
|
9,698
|
|
|
7,565
|
|
Retained
earnings
|
27,159
|
|
|
24,166
|
|
Accumulated other
comprehensive income (loss)
|
(368)
|
|
|
(3,068)
|
|
Total Danaher
stockholders' equity
|
39,766
|
|
|
30,271
|
|
Noncontrolling
interests
|
11
|
|
|
11
|
|
Total stockholders'
equity
|
39,777
|
|
|
30,282
|
|
Total liabilities and
stockholders' equity
|
$
|
76,161
|
|
|
$
|
62,082
|
|
|
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 EARNINGS (unaudited)
|
($ and shares in
millions, except per share amounts)
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
|
December 31,
2020
|
|
December 31,
2019
|
|
December 31,
2020
|
|
December 31,
2019
|
|
Sales
|
$
|
6,760
|
|
|
$
|
4,868
|
|
|
$
|
22,284
|
|
|
$
|
17,911
|
|
|
Cost of
sales
|
(2,806)
|
|
|
(2,164)
|
|
|
(9,809)
|
|
|
(7,927)
|
|
|
Gross
profit
|
3,954
|
|
|
2,704
|
|
|
12,475
|
|
|
9,984
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(1,957)
|
|
|
(1,449)
|
|
|
(6,896)
|
|
|
(5,589)
|
|
|
Research and
development expenses
|
(396)
|
|
|
(294)
|
|
|
(1,348)
|
|
|
(1,126)
|
|
|
Operating
profit
|
1,601
|
|
|
961
|
|
|
4,231
|
|
|
3,269
|
|
|
Nonoperating income
(expense):
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
35
|
|
|
(2)
|
|
|
39
|
|
|
12
|
|
|
Gain on sale of
product lines
|
—
|
|
|
—
|
|
|
455
|
|
|
—
|
|
|
Loss on early
extinguishment of borrowings
|
(26)
|
|
|
(7)
|
|
|
(26)
|
|
|
(7)
|
|
|
Interest
expense
|
(72)
|
|
|
(44)
|
|
|
(275)
|
|
|
(108)
|
|
|
Interest
income
|
4
|
|
|
67
|
|
|
71
|
|
|
139
|
|
|
Earnings from
continuing operations before income taxes
|
1,542
|
|
|
975
|
|
|
4,495
|
|
|
3,305
|
|
|
Income
taxes
|
(301)
|
|
|
(182)
|
|
|
(849)
|
|
|
(873)
|
|
|
Net earnings from
continuing operations
|
1,241
|
|
|
793
|
|
|
3,646
|
|
|
2,432
|
|
|
Earnings from
discontinued operations, net of income taxes
|
—
|
|
|
482
|
|
|
—
|
|
|
576
|
|
|
Net
earnings
|
1,241
|
|
|
1,275
|
|
|
3,646
|
|
|
3,008
|
|
|
Mandatory convertible
preferred stock dividends
|
(41)
|
|
|
(19)
|
|
|
(136)
|
|
|
(68)
|
|
|
Net earnings
attributable to common stockholders
|
$
|
1,200
|
|
|
$
|
1,256
|
|
|
$
|
3,510
|
|
|
$
|
2,940
|
|
|
Net earnings per
common share from continuing operations:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.69
|
|
|
$
|
1.08
|
|
|
$
|
4.97
|
|
|
$
|
3.31
|
|
|
Diluted
|
$
|
1.66
|
|
|
$
|
1.07
|
|
|
$
|
4.89
|
|
|
$
|
3.26
|
|
|
Net earnings per
common share from discontinued operations:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
—
|
|
|
$
|
0.67
|
|
|
$
|
—
|
|
|
$
|
0.81
|
|
|
Diluted
|
$
|
—
|
|
|
$
|
0.66
|
|
|
$
|
—
|
|
|
$
|
0.79
|
|
|
Net earnings per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.69
|
|
|
$
|
1.75
|
|
|
$
|
4.97
|
|
|
$
|
4.11
|
|
*
|
Diluted
|
$
|
1.66
|
|
|
$
|
1.73
|
|
|
$
|
4.89
|
|
|
$
|
4.05
|
|
|
Average common stock
and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
711.6
|
|
|
716.1
|
|
|
706.2
|
|
|
715.0
|
|
|
Diluted
|
724.5
|
|
|
726.3
|
|
|
718.7
|
|
|
725.5
|
|
|
|
* Net earnings
per common share amount does not add due to rounding.
|
|
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 (unaudited)
|
($ in
millions)
|
|
|
Year
Ended
|
|
December 31,
2020
|
|
December 31,
2019
|
Cash flows from
operating activities:
|
|
|
|
Net
earnings
|
$
|
3,646
|
|
|
$
|
3,008
|
|
Less: earnings from
discontinued operations, net of income taxes
|
—
|
|
|
576
|
|
Net earnings from
continuing operations
|
3,646
|
|
|
2,432
|
|
Noncash
items:
|
|
|
|
Depreciation
|
637
|
|
|
564
|
|
Amortization of
intangible assets
|
1,138
|
|
|
625
|
|
Amortization of
acquisition-related inventory fair value step-up
|
457
|
|
|
—
|
|
Stock-based
compensation expense
|
187
|
|
|
159
|
|
Pretax gain on sale of
product lines
|
(455)
|
|
|
—
|
|
Change in deferred
income taxes
|
518
|
|
|
(415)
|
|
Change in trade
accounts receivable, net
|
(264)
|
|
|
(157)
|
|
Change in
inventories
|
(123)
|
|
|
(22)
|
|
Change in trade
accounts payable
|
227
|
|
|
18
|
|
Change in prepaid
expenses and other assets
|
102
|
|
|
48
|
|
Change in accrued
expenses and other liabilities
|
145
|
|
|
405
|
|
Total operating cash
provided by continuing operations
|
6,215
|
|
|
3,657
|
|
Total operating cash
(used in) provided by discontinued operations
|
(7)
|
|
|
295
|
|
Net cash provided by
operating activities
|
6,208
|
|
|
3,952
|
|
Cash flows from
investing activities:
|
|
|
|
Cash paid for
acquisitions
|
(20,971)
|
|
|
(331)
|
|
Payments for additions
to property, plant and equipment
|
(791)
|
|
|
(636)
|
|
Proceeds from sales of
property, plant and equipment
|
2
|
|
|
13
|
|
Payments for purchases
of investments
|
(342)
|
|
|
(241)
|
|
Proceeds from sales of
investments
|
13
|
|
|
—
|
|
Proceeds from sale of
product lines
|
826
|
|
|
—
|
|
All other investing
activities
|
24
|
|
|
29
|
|
Total investing cash
used in continuing operations
|
(21,239)
|
|
|
(1,166)
|
|
Total investing cash
used in discontinued operations
|
—
|
|
|
(72)
|
|
Net cash used in
investing activities
|
(21,239)
|
|
|
(1,238)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from the
issuance of common stock in connection with stock-based
compensation
|
153
|
|
|
130
|
|
Proceeds from the
public offering of common stock, net of issuance costs
|
1,729
|
|
|
1,443
|
|
Proceeds from the
public offering of preferred stock, net of issuance
costs
|
1,668
|
|
|
1,600
|
|
Net proceeds from the
sale of Envista Holdings Corporation common stock, net of issuance
costs
|
—
|
|
|
643
|
|
Payment of
dividends
|
(615)
|
|
|
(527)
|
|
Net (repayments of)
proceeds from borrowings (maturities of 90 days or less)
|
(4,637)
|
|
|
2,802
|
|
Proceeds from
borrowings (maturities longer than 90 days)
|
8,670
|
|
|
12,113
|
|
Repayments of
borrowings (maturities longer than 90 days)
|
(5,933)
|
|
|
(1,565)
|
|
Make-whole premiums to
redeem borrowings prior to maturity
|
(29)
|
|
|
(7)
|
|
All other financing
activities
|
—
|
|
|
(43)
|
|
Total financing cash
provided by continuing operations
|
1,006
|
|
|
16,589
|
|
Cash distributions to
Envista Holdings Corporation, net
|
—
|
|
|
(224)
|
|
Net cash provided by
financing activities
|
1,006
|
|
|
16,365
|
|
Effect of exchange
rate changes on cash and equivalents
|
148
|
|
|
45
|
|
Net change in cash
and equivalents
|
(13,877)
|
|
|
19,124
|
|
Beginning balance of
cash and equivalents
|
19,912
|
|
|
788
|
|
Ending balance of
cash and equivalents
|
$
|
6,035
|
|
|
$
|
19,912
|
|
|
|
|
|
Supplemental
disclosure:
|
|
|
|
Shares redeemed
through the split-off of Envista Holdings Corporation (22.9 million
shares held as Treasury shares)
|
$
|
—
|
|
|
$
|
3,452
|
|
|
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 (unaudited)
|
($ in
millions)
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
December 31,
2020
|
|
December 31,
2019
|
|
December 31,
2020
|
|
December 31,
2019
|
Sales:
|
|
|
|
|
|
|
|
Life
Sciences
|
$
|
3,361
|
|
|
$
|
1,916
|
|
|
$
|
10,576
|
|
|
$
|
6,951
|
|
Diagnostics
|
2,227
|
|
|
1,804
|
|
|
7,403
|
|
|
6,561
|
|
Environmental &
Applied Solutions
|
1,172
|
|
|
1,148
|
|
|
4,305
|
|
|
4,399
|
|
Total
|
$
|
6,760
|
|
|
$
|
4,868
|
|
|
$
|
22,284
|
|
|
$
|
17,911
|
|
|
|
|
|
|
|
|
|
Operating
Profit:
|
|
|
|
|
|
|
|
Life
Sciences
|
$
|
811
|
|
|
$
|
405
|
|
|
$
|
2,054
|
|
|
$
|
1,401
|
|
Diagnostics
|
586
|
|
|
352
|
|
|
1,538
|
|
|
1,134
|
|
Environmental &
Applied Solutions
|
272
|
|
|
291
|
|
|
979
|
|
|
1,052
|
|
Other
|
(68)
|
|
|
(87)
|
|
|
(340)
|
|
|
(318)
|
|
Total
|
$
|
1,601
|
|
|
$
|
961
|
|
|
$
|
4,231
|
|
|
$
|
3,269
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margins:*
|
|
|
|
|
|
|
|
Life
Sciences
|
24.1
|
%
|
|
21.2
|
%
|
|
19.4
|
%
|
|
20.2
|
%
|
Diagnostics
|
26.3
|
%
|
|
19.5
|
%
|
|
20.8
|
%
|
|
17.3
|
%
|
Environmental &
Applied Solutions
|
23.2
|
%
|
|
25.3
|
%
|
|
22.7
|
%
|
|
23.9
|
%
|
Total
|
23.7
|
%
|
|
19.8
|
%
|
|
19.0
|
%
|
|
18.3
|
%
|
|
* Operating
profit margins for 2019 are calculated using whole dollars to agree
to prior year reported amounts.
|
|
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.
|
View original
content:http://www.prnewswire.com/news-releases/danaher-reports-fourth-quarter-and-full-year-2020-results-301216809.html
SOURCE Danaher Corporation