10-QPeriod: Q3 FY2021

DANAHER CORP /DE/ Quarterly Report for Q3 Ended Jul 2, 2021

Filed July 22, 2021For Securities:DHR

Summary

Danaher Corporation reported robust financial performance for the quarter ending July 2, 2021, with overall revenues increasing by 36.5% compared to the prior year, driven by strong core sales growth of 31.5%. This growth was significantly boosted by the Life Sciences segment, which saw a 41.5% revenue increase, largely attributed to the ongoing demand for COVID-19 related products and services, as well as the positive impact of the Cytiva acquisition. The Diagnostics segment also delivered strong performance with a 40.5% revenue increase, benefiting from both COVID-19 testing and a rebound in non-COVID-19 diagnostic volumes. Operationally, the company experienced a substantial improvement in operating profit margins across all segments, driven by higher sales volumes, favorable product mix, and ongoing productivity initiatives. Danaher also announced a definitive agreement to acquire Aldevron for approximately $9.6 billion, signaling continued strategic growth through acquisition. Despite ongoing uncertainties related to the COVID-19 pandemic, Danaher projects continued core sales growth in the next quarter, albeit at a moderated pace compared to the first half of the year.

Financial Highlights

50 data points
Beta

Revenue

$7.22B

60.9% Gross Margin

Net Income

$1.78B

24.7% Net Margin

EPS (Diluted)

$2.40

Total Assets

$78.03B

Cash & Equivalents

$7.32B

Free Cash Flow

$1.81B

Financial Statements
Beta
Revenue$7.22B
Cost of Revenue$2.82B
Gross Profit$4.40B
R&D Expenses$426.00M
SG&A Expenses$1.97B
Operating Income$2.00B
Interest Expense$62.00M
Net Income$1.78B
EPS (Basic)$2.44
EPS (Diluted)$2.40
Shares Outstanding (Basic)714.50M
Shares Outstanding (Diluted)736.00M

Key Highlights

  • 1Strong Q2 2021 revenue growth of 36.5% year-over-year, driven by a 31.5% increase in core sales.
  • 2Life Sciences segment revenue surged by 41.5%, bolstered by demand for COVID-19 related products and the Cytiva acquisition.
  • 3Diagnostics segment revenue rose by 40.5%, benefiting from both COVID-19 testing and recovering non-COVID-19 diagnostic demand.
  • 4Significant improvement in operating profit margins across all segments due to higher sales, favorable mix, and cost efficiencies.
  • 5Announced definitive agreement to acquire Aldevron for approximately $9.6 billion to expand capabilities in genomic medicine.
  • 6Positive impact from foreign currency exchange rates contributed 4.0% to revenue growth in the quarter.
  • 7Company anticipates continued core sales growth in Q3 2021, though at a slower rate than the first half of the year.

Frequently Asked Questions

The significant revenue increase of 36.5% in Q2 2021 was primarily driven by a strong core sales growth of 31.5%. This was further boosted by the positive impact of the Cytiva acquisition and favorable foreign currency exchange rates. Demand for products supporting COVID-19 related research, development, and testing, alongside a recovery in non-COVID-19 related product demand across the Life Sciences and Diagnostics segments, were key contributors.

Danaher announced a definitive agreement to acquire Aldevron for approximately $9.6 billion. This acquisition is expected to strengthen Danaher's Life Sciences segment by expanding its product line diversity, particularly in areas supporting genomic medicine, through Aldevron's high-quality plasmid DNA, mRNA, and protein manufacturing capabilities.

The COVID-19 pandemic continued to be a significant factor, driving strong demand for certain products, especially in the Life Sciences segment for bioprocessing, filtration, and genomic products, and in the Diagnostics segment for molecular testing. While this created significant revenue opportunities, the company also noted ongoing uncertainties and potential risks related to the pandemic's evolution and its impact on supply chains and demand for non-COVID-19 related products.

Danaher expects core sales to grow in the third quarter of 2021 compared to the prior year, driven by continued demand for COVID-19 related solutions and the recovery of other businesses. However, the growth rate is anticipated to be lower than that experienced in the first half of 2021, as the company saw an acceleration in the latter half of 2020.