Summary
Danaher Corporation's 2015 10-K filing reveals a company strategically positioned for significant transformation with a notable increase in debt driven by the substantial acquisition of Pall Corporation. Despite a strong revenue growth of 7.5% to $20.6 billion, operating profit saw a slight decrease to $3.47 billion due to acquisition-related charges, separation costs, and currency headwinds. The company is actively preparing to split into two distinct entities: a science and technology-focused "New Danaher" and a diversified industrial firm named "Fortive." This separation, slated for the third quarter of 2016, is a key strategic move aiming to unlock value and allow each entity to pursue tailored growth strategies. Financially, the period was marked by the large-scale Pall acquisition, significantly increasing total assets and long-term debt. While operating cash flow remained robust, the substantial debt load taken on for the acquisition warrants investor attention. The company maintained its commitment to shareholders through dividends, and its diversified business segments across Test & Measurement, Environmental, Life Sciences & Diagnostics, Dental, and Industrial Technologies provided a resilient revenue base. The Life Sciences & Diagnostics segment, bolstered by Pall, became the largest revenue contributor. Investors should monitor the successful integration of Pall and the execution of the forthcoming corporate separation.
Financial Highlights
53 data points| Revenue | $14.43B |
| Cost of Revenue | $6.66B |
| Gross Profit | $7.77B |
| R&D Expenses | $861.40M |
| SG&A Expenses | $4.75B |
| Operating Income | $2.16B |
| Interest Expense | $139.80M |
| Net Income | $3.36B |
| EPS (Basic) | $4.81 |
| EPS (Diluted) | $4.74 |
| Shares Outstanding (Basic) | 698.10M |
| Shares Outstanding (Diluted) | 708.50M |
Key Highlights
- 1Danaher announced its intention to separate into two independent public companies in Q3 2016: 'New Danaher' (Life Sciences & Diagnostics, Dental, Water Quality, Product Identification) and 'Fortive' (Test & Measurement, Industrial Technologies excluding product ID, Retail/Commercial Petroleum).
- 2The company completed its largest acquisition to date, Pall Corporation, for approximately $13.6 billion, significantly expanding its Life Sciences & Diagnostics segment.
- 3Total sales increased by 7.5% to $20.56 billion in 2015, driven by both existing businesses (3.0% growth) and acquisitions (10.5% growth).
- 4Long-term debt increased substantially to $12.03 billion from $3.40 billion, primarily due to financing the Pall acquisition.
- 5Despite increased sales, operating profit saw a slight decrease to $3.47 billion from $3.35 billion, impacted by acquisition-related charges and separation costs.
- 6The Life Sciences & Diagnostics segment became the largest by revenue, reaching $8.21 billion, largely due to the Pall acquisition.
- 7The company continued to return capital to shareholders, increasing its quarterly dividend in 2015 and maintaining a share repurchase program with 20 million shares available.