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Danaher Reports Record Second Quarter 2013 Results



              Danaher Reports Record Second Quarter 2013 Results

PR Newswire

WASHINGTON, July 18, 2013

WASHINGTON, July 18, 2013 /PRNewswire/ -- Danaher Corporation (NYSE: DHR)
today announced results for the second quarter of 2013.  All financial metrics
in this release reflect only the Company's continuing operations unless
otherwise noted.

Net earnings for the quarter ended June 28, 2013 were $616.8 million, or $0.87
per share on a diluted basis, a 3.5% increase over diluted net earnings per
share of $0.84 for the second quarter of 2012.  As summarized in the attached
reconciliation schedule, included in the second quarter 2012 diluted net
earnings per share is a $0.03 benefit from discrete tax items, a lower than
anticipated income tax rate, as well as a gain from resolving a contingency
related to a prior asset disposal.  Excluding these gains, adjusted diluted
net earnings per share increased 7.5% from the second quarter of 2012 to the
second quarter of 2013.

Revenues for the quarter were $4.7 billion, 4% higher than the $4.6 billion
reported for the second quarter of 2012.  Core revenues increased 2.5% in the
second quarter of 2013 compared to the second quarter of 2012.

The Company anticipates that GAAP diluted net earnings per share for the
quarter ending September 27, 2013 will be in the range of $0.78 to $0.83.  The
Company narrowed its full year 2013 adjusted diluted net earnings per share
guidance to $3.37 to $3.42 from a previous range of $3.32 to $3.47.

H. Lawrence Culp, Jr., President and Chief Executive Officer, stated, "Core
revenue growth in the quarter was slightly better than we anticipated and,
combined with our team's outstanding execution, led to earnings
outperformance, excellent margin expansion and superior cash flow.  As we look
to the second half of the year, we maintain a conservative macro outlook,
while remaining confident in our ability to deliver solid operating margin
expansion.  Our earnings outperformance in the second quarter allows us to
make additional high impact growth investments and to fund productivity and
efficiency initiatives that we believe will position us well for the balance
of 2013 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
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 will remain available until the
next quarterly earnings call.  The conference call can be accessed by dialing
888-726-2470 within the U.S. or by dialing 913-312-1475 outside the U.S. a few
minutes before the 8:00 a.m. EDT start and telling the operator that you are
dialing in for Danaher's earnings conference call (access code 5527091).  A
replay of the conference call will be available shortly after the conclusion
of the call and through Thursday, July 25, 2013.  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 5527091.  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."

Danaher is a science and technology leader that designs, manufactures, and
markets innovative products and services to professional, medical, industrial,
and commercial customers.  Our premier brands are among the most highly
recognized in each of the markets we serve.  The Danaher Business System
provides a foundation to our 63,000 associates around the world, serving
customers in more than 125 countries.  In 2012, we generated $18.3 billion of
revenue.  For more information please visit our website: 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.

Statements in this release that are not strictly historical, including the
statements regarding the Company's anticipated diluted net earnings per share
for the third quarter and full year 2013, the macro-economic outlook, the
Company's ability to expand operating margins, the Company's investments in
growth and in productivity and efficiency initiatives and the potential impact
thereof, the Company's positioning for the balance and 2013 and beyond 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 and 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, contingent liabilities relating to
acquisitions and divestures, 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 reduction 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 defects and recalls, risks relating
to product manufacturing, the impact of our debt obligations on our
operations, 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, labor matters,
 international economic, political, legal 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 2012 Annual Report on Form 10-K and Quarterly
Report on Form 10-Q for the second quarter of 2013. 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
                    June 28, 2013  June 29, 2012  June 28, 2013  June 29, 2012
Sales               $  4,737.5     $  4,553.5     $  9,182.2     $  8,869.7
Cost of sales       (2,242.0)      (2,198.0)      (4,361.0)      (4,278.7)
Gross profit        2,495.5        2,355.5        4,821.2        4,591.0
Operating costs and
other:
Selling, general
and administrative  (1,339.7)      (1,278.6)      (2,638.1)      (2,523.5)
expenses
Research and
development         (312.2)        (283.6)        (608.6)        (553.7)
expenses
Earnings from
unconsolidated      —              18.0           —              32.4
joint venture
Operating profit    843.6          811.3          1,574.5        1,546.2
Non-operating
income (expense):
Gain on sale of
unconsolidated      —              —              229.8          —
joint venture
Interest expense    (39.4)         (37.9)         (78.6)         (77.3)
Interest income     1.6            0.7            2.5            1.4
Earnings from
continuing          805.8          774.1          1,728.2        1,470.3
operations before
income taxes
Income taxes        (189.0)        (173.9)        (419.5)        (350.1)
Net earnings from
continuing          616.8          600.2          1,308.7        1,120.2
operations
Earnings from
discontinued        —              —              —              92.9
operations, net of
income taxes
Net earnings        $  616.8       $  600.2       $  1,308.7     $  1,213.1
Net earnings per
share from
continuing
operations:
Basic               $  0.89        $  0.86        $  1.89        $  1.62
Diluted             $  0.87        $  0.84        $  1.85        $  1.57
Net earnings per
share from
discontinued
operations:
Basic               $  —           $  —           $  —           $  0.13
Diluted             $  —           $  —           $  —           $  0.13
Net earnings per
share:
Basic               $  0.89        $  0.86        $  1.89        $  1.75
Diluted             $  0.87        $  0.84        $  1.85        $  1.70
Average common
stock and common
equivalent shares
outstanding:
Basic               695.2          695.6          693.6          693.5
Diluted             709.8          714.9          709.1          714.5

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

($ in millions except per share data)

 

Second Quarter Earnings Per Share
                                        Three Months Ended            %
                                        June 28, 2013  June 29, 2012  Increase
Diluted Net Earnings Per Share from     $   0.87       $   0.84       3.5   %
Continuing Operations
Gains from discrete tax items and
reduction of anticipated                —              (0.02)

 effective tax rate ($11 million)
2012 gain on resolution of
contingencies associated with

previously disposed assets ($11 million —              (0.01)
pre-tax, $8 million

 after-tax)
Adjusted Diluted Net Earnings Per Share $   0.87       $   0.81       7.5   %
from Continuing Operations (Non-GAAP)

Forecasted Earnings Per Share

 

                                        Three Months Ending  Year Ending
                                        September 27, 2013   December 31, 2013
                                        Low End    High End  Low End  High End
Diluted Net Earnings Per Share from     $  0.78    $  0.83   $ 3.60   $  3.65
Continuing Operations
Gain on the sale of investment in Apex
Tool 

Group LLC in the first quarter of 2013  —          —         (0.20)   (0.20)
($230

million pre-tax, $144 million
after-tax)
Gain from retroactive reinstatement of

certain federal tax provisions
contained in the
                                        —          —         (0.03)   (0.03)
American Tax Relief Act of 2012 and
other

discrete tax items.
Adjusted Diluted Net Earnings Per Share $  0.78    $  0.83   $ 3.37   $  3.42
from Continuing Operations (Non-GAAP)

 

 

Core Revenue Growth
                                          Three Months

                                          Ended June 28,

Components of Revenue Growth              2013 vs.

                                          Comparable 2012

                                          Period
Core (Non-GAAP)                           2.5       %
Acquisitions (Non-GAAP)                   2.0       %
Impact of Currency Translation (Non-GAAP) (0.5)     %
Total Revenue Growth (GAAP)               4.0       %

 

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 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 non-GAAP
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
impact from the divestiture of a product line the sales of which (prior to the
divestiture) were included in sales from acquired businesses ("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 this measure provides 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 because the nature, size and number of acquisitions
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. 

SOURCE Danaher Corporation

Website: http://www.danaher.com
Contact: Matt R. McGrew, Vice President, Investor Relations, Danaher
Corporation, 2200 Pennsylvania Ave, NW, Suite 800W Washington, D.C. 20037,
Telephone: (202) 828-0850, Fax: (202) 828-0860
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