8-KOther EventsExhibits & Filings

DANAHER CORP /DE/ 8-K Report, Corporate Update (Mar 10, 2006)

Filed March 10, 2006For Securities:DHR

Summary

Danaher Corporation (DHR) announced on March 9, 2006, the settlement of a significant lawsuit filed by Federal Express Corporation against its subsidiary, Accu-Sort, Inc. The litigation, initiated in May 2001, involved allegations of breach of contract, misappropriation of trade secrets, breach of fiduciary duty, unjust enrichment, and conversion. While the terms of the settlement were not disclosed beyond being "not material to its financial position," Danaher has adjusted previously established reserves by $15.5 million, resulting in a $9.9 million after-tax charge ($0.03 per diluted share). This charge will be reflected in the Company's 2005 fiscal year results, leading to a slight downward revision in previously reported net earnings and diluted earnings per share for that period. Danaher also stated its intention to seek recovery from the seller of Accu-Sort under the acquisition agreement, as indemnification provisions exist.

Key Highlights

  • 1Danaher subsidiary Accu-Sort, Inc. has settled a lawsuit with Federal Express Corporation.
  • 2The lawsuit, filed in May 2001, included claims of breach of contract and misappropriation of trade secrets, among others.
  • 3The settlement amount is considered not material to Danaher's overall financial position.
  • 4Danaher adjusted previously booked reserves by $15.5 million in connection with the settlement.
  • 5This adjustment resulted in a $9.9 million after-tax charge, impacting 2005 earnings per share by $0.03.
  • 6Danaher will report slightly lower net earnings and EPS for fiscal year 2005 in its upcoming 10-K filing.
  • 7The company plans to pursue indemnification from the seller of Accu-Sort as per the purchase agreement.

Frequently Asked Questions

The litigation involved allegations by Federal Express against Accu-Sort, a Danaher subsidiary, for breach of contract, misappropriation of trade secrets, breach of fiduciary duty, unjust enrichment, and conversion.

Danaher adjusted previously established reserves by $15.5 million, leading to a $9.9 million after-tax charge, which reduces the previously reported 2005 diluted EPS by $0.03. The settlement itself is considered not material to the company's financial position.

The settlement charge will be reflected in Danaher's 2005 fiscal year results. Consequently, the reported net earnings for the full year 2005 will be $897.8 million ($2.76 per diluted share), a slight decrease from the $907.7 million ($2.79 per diluted share) initially reported in the January 26, 2006 earnings release.

Yes, Danaher intends to pursue recovery under the purchase agreement through indemnification provisions from the seller of Accu-Sort, as the agreement includes such terms regarding this matter.