01—Abstract
Summary
Summary of the 10-K filed February 21, 2008. Cited figures are marked; the original filing is the authoritative source.
Danaher Corporation's 2007 10-K filing reveals a year of significant growth, driven by strategic acquisitions and expansion across its four key segments: Professional Instrumentation, Medical Technologies, Industrial Technologies, and Tools & Components.
The company reported a substantial increase in sales, bolstered by the integration of newly acquired businesses, most notably Tektronix, Inc. and ChemTreat, Inc. These acquisitions are expected to contribute to future growth and operational efficiencies. Danaher continues to leverage its Danaher Business System (DBS) to drive performance improvements in quality, delivery, cost, and innovation across its diverse portfolio. Financially, the company demonstrated robust operating cash flow generation.
Despite significant investment in acquisitions, Danaher maintained a strong liquidity position. The company also continued its share repurchase program and paid dividends, reflecting a commitment to shareholder returns.
Management highlighted ongoing efforts to improve operating profit margins through cost reduction initiatives and strategic sourcing. The company's global reach, with over half of its sales generated outside the U.S., provides diversification and resilience against regional economic fluctuations.
02—Key points
Key Highlights
- Danaher achieved significant sales growth in 2007, driven by strategic acquisitions like Tektronix and ChemTreat, complementing its existing businesses.
- The company's operational efficiency is managed through the Danaher Business System (DBS), aimed at continuous improvement in quality, delivery, cost, and innovation.
- Operating cash flow remained strong, supporting the company's aggressive acquisition strategy and capital allocation priorities.
- Danaher continued to invest in research and development across its segments, particularly in Medical Technologies and Professional Instrumentation, to drive future product innovation.
- Approximately 51% of Danaher's total sales were generated from international markets, showcasing its global diversification.
- The company actively managed its capital structure, utilizing commercial paper and senior notes to finance acquisitions, while also engaging in share repurchases and dividend payments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2007, Danaher Corp kept $0.12.
- Revenue$11.03B100.0%
- Cost of revenue−$5.99B54.3%
- Gross profit$5.04B45.7%
- Operating costs−$3.30B29.9%
- Operating income$1.74B15.8%
- Interest, other & tax−$370.8M3.4%
- Net income$1.37B12.4%
Where FY2007 revenue went
$11.03B- Cost of revenue: $5.99B, 54% of revenue
- SG&A: $2.71B, 25% of revenue
- Net income: $1.37B, 12% of revenue
- R&D: $601.4M, 5.5% of revenue
- Interest, other & tax: $370.8M, 3.4% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 21, 2008Financial Statements
| Revenue | $11.03B |
| Cost of Revenue | $5.99B |
| Gross Profit | $5.04B |
| R&D Expenses | $601.42M |
| SG&A Expenses | $2.71B |
| Operating Expenses | $9.29B |
| Operating Income | $1.74B |
| Interest Expense | $109.70M |
| Net Income | $1.37B |
| EPS (Basic) | $2.20 |
| EPS (Diluted) | $2.10 |
| Shares Outstanding (Basic) | 622.45M |
| Shares Outstanding (Diluted) | 658.92M |
05—Questions
Frequently Asked Questions
What were Danaher's primary growth drivers in 2007?
Danaher's growth in 2007 was primarily driven by strategic acquisitions, most notably Tektronix, Inc. and ChemTreat, Inc., which expanded its presence in the Professional Instrumentation and Medical Technologies segments. Organic growth from existing businesses, supported by new product introductions and market penetration, also contributed to the overall sales increase.
How did Danaher finance its significant acquisitions in 2007?
The company financed its major acquisitions in 2007 through a combination of sources, including proceeds from the issuance of commercial paper, proceeds from a common stock offering, and existing cash balances. For instance, the Tektronix acquisition was partly funded by commercial paper and a November 2007 stock offering, with a portion of the commercial paper subsequently refinanced through a senior notes offering.
What is Danaher's approach to shareholder returns?
Danaher aims to create shareholder value through multiple avenues. This includes delivering sales growth, achieving upper quartile financial performance, and generating strong cash flow. The company actively repurchases its own stock under an authorized program and has been paying regular dividends, indicating a commitment to returning capital to shareholders.
How diversified is Danaher's business by segment and geography?
Danaher operates through four distinct segments: Professional Instrumentation, Medical Technologies, Industrial Technologies, and Tools & Components, offering a broad product portfolio. Geographically, the company is well-diversified, with approximately 51% of its sales generated outside the United States in 2007, primarily in Europe and Asia, which helps mitigate risks associated with any single market.
06—Continue