10-QPeriod: Q2 FY2015

DANAHER CORP /DE/ Quarterly Report for Q2 Ended Apr 3, 2015

Filed April 23, 2015For Securities:DHR

Summary

Danaher Corporation reported a 4.5% increase in consolidated sales for the first quarter of 2015 compared to the prior year, reaching $4.87 billion. This growth was driven by a 5.0% increase from existing businesses and a 6.0% contribution from recent acquisitions, though partially offset by a 6.5% negative impact from currency exchange rates. The company is progressing with its plan to spin off its communications business into a separate entity combined with NetScout, which is expected to close mid-2015, and has received regulatory clearance for this transaction. While overall sales showed positive momentum, operating profit margins slightly decreased from 16.9% to 15.9%, primarily due to the dilutive effect of acquired businesses and acquisition-related charges, partially offset by cost savings from restructuring and productivity improvements. The company continues to strategically invest in growth initiatives and high-growth markets, despite facing global economic uncertainties and currency headwinds. Danaher maintained a strong liquidity position with $2.5 billion in cash and cash equivalents at the end of the quarter.

Financial Highlights

51 data points
Beta

Revenue

$3.19B

54.6% Gross Margin

Net Income

$569.80M

17.8% Net Margin

EPS (Diluted)

$0.79

Total Assets

$36.07B

Cash & Equivalents

$2.51B

Free Cash Flow

$406.60M

Financial Statements
Beta
Revenue$3.19B
Cost of Revenue$2.23B
Gross Profit$1.74B
R&D Expenses$299.40M
SG&A Expenses$1.41B
Operating Income$447.70M
Interest Expense$29.30M
Net Income$569.80M
EPS (Basic)$0.81
EPS (Diluted)$0.79
Shares Outstanding (Basic)707.20M
Shares Outstanding (Diluted)718.70M

Key Highlights

  • 1Consolidated sales increased by 4.5% year-over-year to $4.87 billion in Q1 2015.
  • 2Sales from existing businesses grew by 5.0%, demonstrating underlying organic growth.
  • 3Acquisitions contributed 6.0% to sales growth, highlighting successful integration of new businesses.
  • 4Operating profit margins slightly declined from 16.9% to 15.9% due to acquisition-related costs and dilutive effects, partially offset by cost savings.
  • 5The planned spin-off of the communications business with NetScout received regulatory clearance and is expected to close mid-2015.
  • 6Foreign currency exchange rates had a notable negative impact, reducing reported sales by 6.5%.
  • 7The company ended the quarter with a strong liquidity position, holding $2.5 billion in cash and cash equivalents.

Frequently Asked Questions

Danaher Corporation reported a 4.5% increase in consolidated sales for the first quarter of 2015, reaching $4.87 billion, compared to the same period in the prior year. This growth was driven by both existing businesses and recent acquisitions.

The company is proceeding with its plan to combine its communications business with NetScout Systems, Inc. The transaction has received regulatory clearance, with the Department of Justice closing its investigation. It is expected to close in mid-2015 and will be structured as a distribution of the business to Danaher shareholders followed by a merger.

Foreign currency exchange rates had a significant negative impact on reported sales, reducing them by approximately 6.5% year-over-year due to the strengthening U.S. dollar against most major currencies. The company anticipates this trend could continue to impact full-year sales.

Operating profit margins decreased from 16.9% to 15.9%. This was primarily due to the incremental net dilutive effect of acquired businesses and acquisition-related charges (such as fair value adjustments to acquired inventory), partially offset by higher sales volumes, cost savings from restructuring and productivity initiatives, and investments in new product development and sales growth.