10-QPeriod: Q2 FY2009

DANAHER CORP /DE/ Quarterly Report for Q2 Ended Apr 3, 2009

Filed April 23, 2009For Securities:DHR

Summary

Danaher Corporation (DHR) reported its first quarter results for the period ending April 3, 2009. The company experienced a decline in sales and net earnings compared to the prior year, reflecting the broader economic downturn's impact on its diverse end markets. Despite the challenging environment, Danaher demonstrated resilience through effective cost management, benefiting from restructuring actions initiated in late 2008 and ongoing operational improvements via the Danaher Business System. The company's liquidity remains strong, supported by robust operating cash flow and a substantial cash balance. Danaher also successfully issued new debt in March 2009, bolstering its financial flexibility. While several segments saw revenue decreases, particularly in Industrial Technologies and Tools & Components, Medical Technologies and parts of Professional Instrumentation showed some resilience or modest growth, highlighting the diversification benefits of Danaher's portfolio. Management is proactively addressing the economic headwinds with additional restructuring plans for 2009.

Financial Highlights

30 data points
Beta

Revenue

$2.63B

47.9% Gross Margin

Net Income

$237.70M

9.0% Net Margin

EPS (Diluted)

$0.36

Cash & Equivalents

$975.95M

Free Cash Flow

$280.27M

Financial Statements
Beta
Revenue$2.63B
Cost of Revenue$1.37B
Gross Profit$1.26B
R&D Expenses$160.90M
SG&A Expenses$757.50M
Operating Expenses$2.29B
Operating Income$340.20M
Interest Expense$24.06M
Net Income$237.70M
EPS (Basic)$0.37
EPS (Diluted)$0.36
Shares Outstanding (Basic)638.67M
Shares Outstanding (Diluted)666.96M

Key Highlights

  • 1Consolidated sales decreased by 13% to $2.63 billion compared to the prior year's first quarter, reflecting the global economic downturn.
  • 2Net earnings declined to $237.7 million ($0.72 diluted EPS) from $276.5 million ($0.83 diluted EPS) in the prior year's first quarter.
  • 3The company maintained a strong liquidity position with $975.9 million in cash and cash equivalents at quarter-end and generated $316.7 million in cash from operating activities.
  • 4Danaher completed a public offering of $750 million in senior unsecured notes due 2019, enhancing its financial flexibility.
  • 5Restructuring actions initiated in Q4 2008 are expected to yield over $100 million in annual pre-tax savings, with additional restructuring planned for 2009.
  • 6Sales in the Industrial Technologies and Tools & Components segments experienced significant declines, while Medical Technologies showed some resilience.
  • 7The company is actively managing costs, with SG&A as a percentage of sales increasing due to lower volumes, partially offset by cost savings from restructuring.

Frequently Asked Questions

In the first quarter of 2009, Danaher Corporation reported a year-over-year decrease in both sales and net earnings. Sales fell by 13% to $2.63 billion, and diluted earnings per share decreased to $0.72 from $0.83 in the prior year's first quarter. This performance reflects the impact of the global economic recession across many of its end markets.

Danaher maintains a strong liquidity position, ending the quarter with $975.9 million in cash and cash equivalents. The company generated $316.7 million in cash from operations. Furthermore, Danaher successfully raised $750 million through a new debt issuance in March 2009, providing additional financial flexibility to manage its operations, potential acquisitions, and debt obligations.

The company's Medical Technologies segment showed resilience with modest sales growth, while some areas within Professional Instrumentation also performed relatively well. However, segments like Industrial Technologies and Tools & Components experienced significant sales declines, largely due to weak demand in industrial and consumer-oriented markets, which are more sensitive to the economic downturn.

Danaher is implementing cost reduction measures, including workforce reductions and facility consolidations. Restructuring actions initiated in late 2008 are expected to generate significant annual savings, and the company has announced further restructuring plans for 2009. These initiatives, combined with the ongoing application of the Danaher Business System, aim to improve operational efficiency and adapt the cost structure to current demand levels.