01—Abstract
Summary
Summary of the 10-K filed February 22, 2013. Cited figures are marked; the original filing is the authoritative source.
Danaher Corporation's 2012 10-K filing reveals a company focused on diversified growth through its five key segments: Test & Measurement, Environmental, Life Sciences & Diagnostics, Dental, and Industrial Technologies.
The company emphasizes its Danaher Business System (DBS) as a core driver for continuous improvement in quality, delivery, cost, and innovation. Strategic acquisitions played a significant role in expanding its portfolio, notably the substantial acquisition of Beckman Coulter in 2011, which bolstered the Life Sciences & Diagnostics segment. The company also actively manages its portfolio through divestitures of non-core assets.
The report highlights consistent sales growth, driven by both organic improvements and strategic acquisitions, with a notable presence in high-growth markets. Danaher demonstrates a commitment to shareholder value through consistent dividend payments and a share repurchase program, alongside a robust approach to managing its financial resources and operational efficiencies.
02—Key points
Key Highlights
- Danaher operates across five distinct segments: Test & Measurement, Environmental, Life Sciences & Diagnostics, Dental, and Industrial Technologies, showcasing a diversified business model.
- The Danaher Business System (DBS) is identified as a key strategic tool for driving continuous improvement in operational performance across all segments.
- Significant strategic acquisitions, particularly the acquisition of Beckman Coulter in 2011, were a major growth driver, substantially expanding the Life Sciences & Diagnostics segment.
- The company actively manages its portfolio by divesting non-core businesses, such as the Accu-Sort and Kollmorgen Electro-Optical businesses in 2012.
- Sales growth in 2012 was 13.5% year-over-year, with existing businesses contributing 2.5% and acquired businesses contributing 13.0%, offset by a 2.0% negative impact from currency translation.
- Research and development expenditures increased across all segments, reflecting a commitment to innovation and product development.
- The company maintained a strong liquidity position, with $1.7 billion in cash and cash equivalents as of December 31, 2012, and a $2.5 billion revolving credit facility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Danaher Corp kept $0.13.
- Revenue$18.26B100.0%
- Cost of revenue−$8.85B48.4%
- Gross profit$9.41B51.6%
- Operating costs−$6.25B34.2%
- Operating income$3.17B17.3%
- Interest, other & tax−$772.9M4.2%
- Net income$2.39B13.1%
Where FY2012 revenue went
$18.26B- Cost of revenue: $8.85B, 48% of revenue
- SG&A: $5.18B, 28% of revenue
- Net income: $2.39B, 13% of revenue
- R&D: $1.14B, 6.2% of revenue
- Interest, other & tax: $772.9M, 4.2% of revenue
Kept 13% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 22, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $18.26B$16.09B | +13.5% |
| Cost of Revenue | $8.85B$7.91B | +11.8% |
| Gross Profit | $9.41B$8.18B | +15.1% |
| R&D Expenses | $1.14B$1.02B | +11.7% |
| SG&A Expenses | $5.18B$4.61B | +12.4% |
| Operating Income | $3.17B$2.62B | +20.9% |
| Interest Expense | $157.50M$141.60M | +11.2% |
| Net Income | $2.39B$2.17B | +10.1% |
| EPS (Basic) | $3.45$3.21 | +7.5% |
| EPS (Diluted) | $3.36$3.11 | +8.0% |
| Shares Outstanding (Basic) | 693.40M676.20M | +2.5% |
| Shares Outstanding (Diluted) | 713.10M701.20M | +1.7% |
05—Questions
Frequently Asked Questions
What is Danaher's overall strategy for growth?
Danaher's growth strategy is multi-faceted, focusing on delivering sales growth from existing businesses that outpaces the overall market, achieving upper quartile financial performance compared to peers, and generating strong cash flow. This is achieved through the application of the Danaher Business System (DBS), strategic acquisitions of complementary businesses, continuous portfolio assessment including divestitures of non-strategic assets, and investment in innovation and product development.
How significant were acquisitions to Danaher's performance in 2012?
Acquisitions were a significant driver of Danaher's performance in 2012. The company acquired fourteen businesses for a total consideration of $1.8 billion, which contributed 13.0% to the year-over-year sales growth. The impact of the 2011 acquisition of Beckman Coulter was particularly substantial, significantly expanding the Life Sciences & Diagnostics segment and contributing to overall revenue and earnings growth.
What is the financial health and liquidity of Danaher as of the end of 2012?
Danaher demonstrated strong financial health and liquidity at the end of 2012. The company reported $1.7 billion in cash and cash equivalents. It also maintained a $2.5 billion unsecured revolving credit facility, indicating robust access to capital. The company's operating cash flows from continuing operations increased by approximately 28% in 2012 compared to 2011, highlighting its ability to generate substantial cash from its operations.
How did currency fluctuations affect Danaher's financial results in 2012?
Currency exchange rates had a negative impact on Danaher's sales in 2012. The U.S. dollar was, on average, stronger against other major currencies compared to 2011, which decreased sales by 2.0%. The company noted that any strengthening of the U.S. dollar would continue to adversely impact sales and results of operations.
06—Continue