10-QPeriod: Q2 FY2012

DANAHER CORP /DE/ Quarterly Report for Q2 Ended Jun 29, 2012

Filed July 19, 2012For Securities:DHR

Summary

Danaher Corporation reported solid top-line growth in the second quarter of 2012, primarily driven by the acquisition of Beckman Coulter in June 2011. Consolidated sales from continuing operations increased by 25.0% year-over-year for the quarter. The company also announced a plan to implement cost reductions, expected to be substantially completed by year-end 2012, with an estimated pre-tax charge of approximately $100 million. This initiative aims to improve efficiency in light of macroeconomic uncertainties, particularly in Europe. Acquisitions remain a key growth driver, with eight businesses acquired for $945 million in the first half of 2012. Concurrently, Danaher divested two businesses, ASI and KEO, for $337 million in cash, resulting in an after-tax gain of $94 million. The company generated strong operating cash flow, increasing by 38% to $1.7 billion in the first half of 2012, which funded strategic acquisitions and other operational needs. Despite these positive trends, currency headwinds, particularly a stronger U.S. dollar, negatively impacted reported sales.

Financial Statements
Beta

Key Highlights

  • 1Consolidated sales from continuing operations grew 25.0% year-over-year for the three months ended June 29, 2012, largely driven by the Beckman Coulter acquisition.
  • 2The company announced a new cost reduction plan expected to incur approximately $100 million in pre-tax charges, aiming for completion by December 31, 2012.
  • 3Acquisitions remain a significant strategy, with eight businesses acquired for $945 million in the first half of 2012.
  • 4Divestitures of ASI and KEO businesses generated $337 million in cash proceeds in the first half of 2012, resulting in a $94 million after-tax gain.
  • 5Operating cash flow from continuing operations increased by 38% to $1.7 billion for the six months ended June 29, 2012, demonstrating strong cash generation.
  • 6The Life Sciences & Diagnostics segment saw significant sales growth (124.5% for the quarter) driven by the Beckman Coulter acquisition, although its operating profit margin was impacted by acquisition-related charges and dilutive effects.
  • 7The stronger U.S. dollar negatively impacted reported sales by approximately 3.5% in the second quarter of 2012.

Frequently Asked Questions

The primary driver of Danaher's sales growth in the second quarter of 2012 was the acquisition of Beckman Coulter, Inc. in June 2011, which significantly boosted the Life Sciences & Diagnostics segment's revenue.

Danaher announced a plan to implement cost reductions, expected to be substantially completed by December 31, 2012. This plan involves pre-tax charges of approximately $100 million and is aimed at enhancing operational efficiency in response to global economic uncertainties, particularly in Europe.

Danaher continues to actively manage its portfolio. In the first half of 2012, the company acquired eight businesses for a total of $945 million. Simultaneously, it divested two businesses, ASI and KEO, for $337 million, realizing a substantial after-tax gain.

During the second quarter of 2012, a stronger U.S. dollar negatively impacted reported sales, reducing them by approximately 3.5% compared to the same period in the prior year. The company anticipates further potential negative impact if the dollar remains strong.