10-KPeriod: FY2014

DANAHER CORP /DE/ Annual Report, Year Ended Dec 31, 2014

Filed February 25, 2015For Securities:DHR

Summary

Danaher Corporation reported robust performance for the fiscal year ending December 31, 2014, demonstrating sales growth driven by both existing businesses and strategic acquisitions. The company's diversified five-segment structure, encompassing Test & Measurement, Environmental, Life Sciences & Diagnostics, Dental, and Industrial Technologies, contributed to its stable global performance. Danaher's commitment to its "Danaher Business System" (DBS) continues to be a key driver for operational efficiency and innovation across its diverse product and service offerings. Financially, the company saw an increase in consolidated sales of 4.0% compared to the prior year. Management highlighted a strategic acquisition of Nobel Biocare in the Dental segment, alongside sixteen other acquisitions across various segments, reinforcing its growth-through-acquisition strategy. The company also announced plans to spin off or split off its communications business from the Test & Measurement segment and merge it with NetScout Systems, Inc., a significant strategic move expected to be completed in 2015. Danaher's financial health appears solid, with substantial cash from operations and manageable debt levels.

Financial Highlights

54 data points
Beta

Revenue

$12.87B

53.2% Gross Margin

Net Income

$2.60B

20.2% Net Margin

EPS (Diluted)

$3.63

Total Assets

$36.99B

Cash & Equivalents

$3.01B

Free Cash Flow

$3.29B

Financial Statements
Beta
Revenue$12.87B
Cost of Revenue$6.02B
Gross Profit$6.85B
R&D Expenses$769.40M
SG&A Expenses$4.04B
Operating Income$2.04B
Interest Expense$94.70M
Net Income$2.60B
EPS (Basic)$3.70
EPS (Diluted)$3.63
Shares Outstanding (Basic)702.20M
Shares Outstanding (Diluted)716.10M

Key Highlights

  • 1Danaher reported a 4.0% increase in consolidated sales for 2014, reaching $19.9 billion, with existing businesses contributing 3.5% growth.
  • 2The company completed a significant acquisition of Nobel Biocare in the Dental segment for approximately $1.9 billion, alongside sixteen other acquisitions totaling $1.3 billion.
  • 3A major strategic initiative was announced to combine the majority of Danaher's Test & Measurement segment's communications business with NetScout Systems, Inc., expected to be completed in 2015.
  • 4The Life Sciences & Diagnostics segment continued to be the largest revenue contributor, showing mid-single digit growth from existing businesses.
  • 5The company maintained strong operating profit margins, with the Industrial Technologies segment showing the highest operating profit margin at 22.7%.
  • 6Danaher's R&D expenditures increased to $1.314 billion, reflecting a commitment to innovation across its segments.
  • 7The company generated substantial operating cash flow of $3.76 billion, supporting its investing activities, including acquisitions and capital expenditures.

Frequently Asked Questions

Danaher reported consolidated sales of $19.91 billion for the year ended December 31, 2014, representing a 4.0% increase compared to 2013. This growth was attributed to a 3.5% increase from existing businesses and a 1.5% contribution from acquired businesses, partially offset by a 1.0% negative impact from currency translation.

In 2014, Danaher acquired Nobel Biocare for approximately $1.9 billion, significantly bolstering its Dental segment. Additionally, the company acquired sixteen other businesses for approximately $1.3 billion, complementing its existing segments. Danaher also divested its electric vehicle systems/hybrid product line for $87 million. A major strategic move was the agreement to combine its communications business with NetScout Systems, Inc., expected to close in 2015.

Danaher's five segments showed varied performance: Test & Measurement sales increased slightly due to its instruments business, though communications business sales declined. Environmental saw a 7.0% sales increase, driven by water quality and retail petroleum businesses. Life Sciences & Diagnostics reported a 5.0% sales increase, with both diagnostics and life sciences businesses performing well. The Dental segment grew 4.5%, with the Nobel Biocare acquisition expected to enhance future performance. Industrial Technologies achieved a 2.5% sales increase, with strong performance in product identification and other businesses.

The company expects overall sales growth to continue in 2015, with sales from existing businesses projected to grow at a level consistent with 2014. However, management expressed caution regarding macro-economic and geopolitical uncertainties. Growth is expected to be driven by ongoing investments in sales initiatives and strategic acquisitions, as well as positive contributions from high-growth markets.