01—Abstract
Summary
Summary of the 10-K filed February 21, 2014. Cited figures are marked; the original filing is the authoritative source.
Danaher Corporation's 2013 10-K filing highlights a diversified company with five key segments: Test & Measurement, Environmental, Life Sciences & Diagnostics, Dental, and Industrial Technologies.
The company's strategy is centered on driving shareholder value through sales growth exceeding market growth, achieving upper-quartile financial performance, and generating strong cash flow, all underpinned by the Danaher Business System (DBS). Financially, the company demonstrated revenue growth driven by both existing businesses and acquisitions, with approximately 58% of sales generated internationally. While facing some market challenges and currency headwinds, Danaher continued to invest in R&D, with expenditures totaling $1.25 billiona.
The company also actively managed its capital structure, reducing debt and approving a new share repurchase program. Key financial indicators such as sales, operating profit, and net earnings showed an upward trend compared to the previous year, reflecting the company's operational execution and strategic acquisitions.
02—Key points
Key Highlights
- Danaher operates across five diverse segments: Test & Measurement, Environmental, Life Sciences & Diagnostics, Dental, and Industrial Technologies, indicating a broad market reach.
- The company's core strategy revolves around the Danaher Business System (DBS) to drive continuous improvement in quality, delivery, cost, and innovation, aiming for superior financial performance and cash flow generation.
- In 2013, Danaher reported total sales of $19.118 billion, a 4.5% increase from the prior year, with a significant portion (58%) of sales coming from international markets.
- The Life Sciences & Diagnostics segment was the largest contributor to revenue ($6.856 billion), followed by Test & Measurement ($3.417 billion) and Industrial Technologies ($3.432 billion).
- Research and development expenses increased to $1.25 billion in 2013, signaling continued investment in innovation and product development across its segments.
- The company demonstrated a healthy debt reduction, with total debt decreasing from $5.343 billion in 2012 to $3.499 billion in 2013, and maintained a strong liquidity position with $3.1 billion in cash and cash equivalents as of year-end 2013.
- Danaher completed 14 acquisitions in 2013 for a total consideration of $957 million, alongside significant divestitures like the sale of its investment in the Apex Tool Group, demonstrating active portfolio management.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Danaher Corp kept $0.15.
- Revenue$18.28B100.0%
- Cost of revenue−$8.94B48.9%
- Gross profit$9.34B51.1%
- Operating costs−$6.22B34.0%
- Operating income$3.12B17.1%
- Interest, other & tax−$425.5M2.3%
- Net income$2.69B14.7%
Where FY2013 revenue went
$18.28B- Cost of revenue: $8.94B, 49% of revenue
- SG&A: $5.12B, 28% of revenue
- Net income: $2.69B, 15% of revenue
- R&D: $1.10B, 6.0% of revenue
- Interest, other & tax: $425.5M, 2.3% of revenue
Kept 15% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 21, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $18.28B$18.26B | +0.1% |
| Cost of Revenue | $8.94B$8.85B | +1.1% |
| Gross Profit | $9.34B$9.41B | −0.8% |
| R&D Expenses | $1.10B$1.14B | −2.9% |
| SG&A Expenses | $5.12B$5.18B | −1.2% |
| Operating Income | $3.12B$3.17B | −1.4% |
| Interest Expense | $141.20M$157.50M | −10.3% |
| Net Income | $2.69B$2.39B | +12.7% |
| EPS (Basic) | $3.87$3.45 | +12.2% |
| EPS (Diluted) | $3.80$3.36 | +13.1% |
| Shares Outstanding (Basic) | 696.00M693.40M | +0.4% |
| Shares Outstanding (Diluted) | 711.00M713.10M | −0.3% |
05—Questions
Frequently Asked Questions
What are Danaher's main business segments and how did they perform in 2013?
Danaher operates in five segments: Test & Measurement, Environmental, Life Sciences & Diagnostics, Dental, and Industrial Technologies. In 2013, Life Sciences & Diagnostics was the largest segment by revenue, followed by Test & Measurement and Industrial Technologies. The company reported overall sales growth driven by existing businesses and acquisitions across these segments.
How has Danaher's financial health evolved, particularly concerning debt and liquidity?
Danaher significantly reduced its total debt from $5.343 billion in 2012 to $3.499 billion in 2013. The company maintained strong liquidity, ending 2013 with $3.1 billion in cash and cash equivalents, supported by robust operating cash flows and its credit facility, indicating a sound financial position.
What is Danaher's strategy for growth and value creation?
Danaher's strategy focuses on delivering sales growth exceeding market growth, achieving top-quartile financial performance compared to peers, and generating strong cash flow. This is achieved through the Danaher Business System (DBS), continuous innovation, and strategic acquisitions, alongside disciplined portfolio management through divestitures.
06—Continue