10-QPeriod: Q1 FY2012

DANAHER CORP /DE/ Quarterly Report for Q1 Ended Mar 30, 2012

Filed April 19, 2012For Securities:DHR

Summary

Danaher Corporation (DHR) reported strong top-line growth for the first quarter of 2012, with total sales increasing by 31.0% year-over-year to $4.32 billion. This growth was significantly driven by the acquisition of Beckman Coulter in June 2011, which contributed 30.5% to the sales increase. Excluding acquisitions and currency impacts, existing businesses showed a modest 1.5% growth. Net earnings also saw a substantial increase, rising to $612.9 million ($0.89 per diluted share) from $429.4 million ($0.63 per diluted share) in the prior year period. This performance was bolstered by a significant gain from the sale of discontinued operations. The company's operating profit margin slightly decreased to 17.0% from 17.8%, impacted by the lower margins of acquired businesses, though productivity improvements and cost savings offered some offset. Danaher announced a pending acquisition of X-Rite, Inc. for approximately $625 million, expected to close in Q2 2012 and to be financed with available cash.

Financial Highlights

50 data points
Beta

Revenue

$4.32B

51.8% Gross Margin

Net Income

$612.90M

14.2% Net Margin

EPS (Diluted)

$0.86

Total Assets

$30.42B

Cash & Equivalents

$1.04B

Free Cash Flow

$527.50M

Financial Statements
Beta
Revenue$4.32B
Cost of Revenue$2.08B
Gross Profit$2.24B
R&D Expenses$270.10M
SG&A Expenses$1.24B
Operating Income$734.90M
Interest Expense$39.40M
Net Income$612.90M
EPS (Basic)$0.89
EPS (Diluted)$0.86
Shares Outstanding (Basic)691.50M
Shares Outstanding (Diluted)714.00M

Key Highlights

  • 1Total sales increased by 31.0% to $4.32 billion, largely due to the Beckman Coulter acquisition.
  • 2Net earnings rose significantly to $612.9 million, or $0.89 per diluted share.
  • 3The company generated strong operating cash flow of $645.2 million.
  • 4Danaher completed the sale of its ASI and KEO businesses, realizing a significant after-tax gain of $94 million.
  • 5The company announced a pending acquisition of X-Rite, Incorporated for approximately $625 million.
  • 6Operating profit margin slightly decreased to 17.0% from 17.8% due to acquisition impacts, but was supported by cost savings.
  • 7Cash and cash equivalents stood at $1.04 billion as of March 30, 2012.

Frequently Asked Questions

The primary driver of Danaher's sales growth in the first quarter of 2012 was the acquisition of Beckman Coulter, which significantly boosted the Life Sciences & Diagnostics segment. Existing businesses also contributed modest growth, with North America and emerging markets showing the strongest performance.

While acquisitions, particularly Beckman Coulter, drove top-line growth, they also diluted the overall operating profit margin. The report notes that acquired businesses generally have lower gross profit margins. However, the company implemented cost savings from restructuring and productivity initiatives to partially offset this dilutive effect.

Danaher anticipates year-over-year sales growth from existing businesses in the second quarter of 2012 to exceed that of the first quarter, driven by a backlog built in Q1 and sequential improvements in orders and shipments. The company also expects to complete the acquisition of X-Rite in the second quarter.

In the first quarter of 2012, Danaher completed the sale of its Accu-Sort (ASI) business for $132 million and its Kollmorgen Electro-Optical (KEO) business for $205 million. These divestitures, along with a prior sale of the Pacific Scientific Aerospace (PSA) business, were reported as discontinued operations and generated a significant after-tax gain.