01—Abstract
Summary
Summary of the 10-K filed February 24, 2010. Cited figures are marked; the original filing is the authoritative source.
Danaher Corporation's 2010 10-K filing for the fiscal year ending December 31, 2009, reveals a company navigating the challenging economic conditions of 2009.
Despite a significant 12%a year-over-year sales decline, Danaher demonstrated resilience by maintaining operating profit margins through cost-saving measures and restructuring actions. The company actively pursued growth through strategic acquisitions, completing 15 businesses during the year, and significantly expanding its presence in life sciences and diagnostics with key acquisitions post-year-end. Financially, Danaher managed its liquidity effectively, generating substantial operating cash flow and reducing inventory levels.
The company also took steps to strengthen its financial position by issuing new debt. While facing headwinds from reduced customer demand and currency fluctuations, Danaher's diversified business segments and ongoing commitment to the Danaher Business System provided a foundation for anticipated modest sales growth in 2010 and a focus on continued operational improvements and strategic investments.
02—Key points
Key Highlights
- Sales decreased by 12% in 2009 compared to 2008, reflecting challenging economic conditions, with declines observed across all segments and major geographic regions.
- Danaher maintained its operating profit margin at 13.8% in 2009, down slightly from 14.7% in 2008, through restructuring actions, productivity improvements, and cost reductions.
- The company completed 15 acquisitions in 2009 for approximately $704 million, focusing on its Medical Technologies, Professional Instrumentation, and Industrial Technologies segments.
- Significant restructuring charges of $238.5 million were recorded in 2009 to align the cost structure with lower demand, with expected pre-tax savings of $170 million in 2010.
- Operating cash flow from continuing operations was $1.8 billion, a slight decrease from 2008, with improved operating working capital contributing positively.
- The company held $1.7 billion in cash and cash equivalents as of December 31, 2009, providing significant liquidity.
- Subsequent to year-end, Danaher completed the acquisition of the Analytical Technologies division of MDS and the remaining stake in AB SCIEX for $1.1 billion, significantly bolstering its Life Sciences and Diagnostics business.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Danaher Corp kept $0.11.
- Revenue$10.52B100.0%
- Cost of revenue−$5.45B51.8%
- Gross profit$5.07B48.2%
- Operating costs−$3.63B34.5%
- Operating income$1.44B13.7%
- Interest, other & tax−$288.0M2.7%
- Net income$1.15B11.0%
Where FY2009 revenue went
$10.52B- Cost of revenue: $5.45B, 52% of revenue
- SG&A: $3.12B, 30% of revenue
- Net income: $1.15B, 11% of revenue
- R&D: $600.3M, 5.7% of revenue
- Interest, other & tax: $288.0M, 2.7% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 24, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $10.52B$12.70B | −17.2% |
| Cost of Revenue | $5.45B$6.76B | −19.4% |
| Gross Profit | $5.07B$5.94B | −14.6% |
| R&D Expenses | $600.27M$725.44M | −17.3% |
| SG&A Expenses | $3.12B$3.35B | −6.9% |
| Operating Expenses | $9.64B$10.83B | −10.9% |
| Operating Income | $1.44B$1.87B | −23.0% |
| Interest Expense | $118.65M$130.17M | −8.8% |
| Net Income | $1.15B$1.32B | −12.6% |
| EPS (Basic) | $1.80$2.06 | −12.6% |
| EPS (Diluted) | $1.73$1.98 | −12.6% |
| Shares Outstanding (Basic) | 641.53M638.72M | +0.4% |
| Shares Outstanding (Diluted) | 671.48M671.73M | 0.0% |
05—Questions
Frequently Asked Questions
How did Danaher's sales performance fare in 2009 given the economic climate?
Danaher experienced a 12% decrease in sales in 2009 compared to 2008, totaling $11.18 billion. This decline was attributed to lower customer demand across most of its businesses due to the global economic downturn. The company noted that while sales declined across all segments and geographies, the rate of decline improved in the fourth quarter of 2009.
What were Danaher's key strategic initiatives in 2009?
Danaher's primary strategic initiatives in 2009 focused on adapting to the economic environment and pursuing growth. This included implementing significant restructuring actions to reduce costs and rationalize its cost structure, completing 15 strategic acquisitions to complement existing businesses, and managing its liquidity effectively. Post-year-end, the company made a substantial investment in the Life Sciences and Diagnostics sector through significant acquisitions.
How did the company manage its financial resources and liquidity during 2009?
Danaher maintained strong liquidity, ending 2009 with $1.7 billion in cash and cash equivalents. The company generated $1.8 billion in operating cash flow from continuing operations and effectively managed its working capital by reducing inventory levels and collecting accounts receivable. Danaher also issued $750 million in senior unsecured notes to bolster its financial flexibility for general corporate purposes, including acquisitions.
What is the outlook for Danaher in 2010 based on this report?
Based on the stabilizing economic conditions observed towards the end of 2009, Danaher anticipates modest overall sales growth in 2010 compared to 2009. The company expects the restructuring actions undertaken in 2008 and 2009 to positively impact earnings and operating cash flow, supporting continued investment in its competitive position and growth potential.
06—Continue