WASHINGTON, April 20, 2017 /PRNewswire/ -- Danaher
Corporation (NYSE: DHR) today announced results for the first
quarter of 2017. All results in this release reflect only
continuing operations unless otherwise noted. For the quarter ended
March 31, 2017, net earnings were
$483.8 million, or $0.69 per diluted share which represents an 18.0%
year-over-year decrease.
Non-GAAP adjusted diluted net earnings per share was
$0.85 per share. This represents an
8.0% increase over the comparable 2016 period. For the first
quarter 2017, revenues increased 7.0% year-over-year to
$4.2 billion, with core revenue
growth of 2.5% (non-GAAP).
For the second quarter of 2017, the Company anticipates that
diluted net earnings per share will be in the range of $0.77 to $0.80 and non-GAAP adjusted diluted net
earnings per share will be in the range of $0.95 to $0.98.
For the full year 2017, the Company anticipates that diluted net
earnings per share will be in the range of $3.13 to $3.23, and continues to expect its
non-GAAP adjusted diluted net earnings per share to be in the range
of $3.85 to $3.95.
Thomas P. Joyce, Jr., President
and Chief Executive Officer, stated, "We are off to a good start in
2017. During the first quarter, our two most recent large
acquisitions, Pall and Cepheid, performed very well. We drove share
gains in a number of our operating companies and achieved
high-single-digit adjusted earnings per share growth. We also
continued to reinvest in our businesses to enhance our long-term
growth trajectory, and we feel well-positioned to benefit from a
number of compelling market drivers across the portfolio."
Joyce continued, "Through focused execution across the
portfolio, and with the Danaher Business System continuing to serve
as our foundation, we see tremendous opportunities to deliver
long-term value creation for shareholders."
Danaher will discuss its results during its quarterly investor
conference call today starting at 8:00 a.m.
ET. The call and an accompanying slide presentation will be
webcast on the "Investors" section of Danaher's website,
www.danaher.com, under the subheading "Events & Presentations."
A replay of the webcast will be available in the same section of
Danaher's website shortly after the conclusion of the presentation
and will remain available until the next quarterly earnings
call.
The conference call can be accessed by dialing 877-675-4753
within the U.S. or by dialing +1-719-325-4806 outside the U.S. a
few minutes before the 8:00 a.m. ET
start and telling the operator that you are dialing in for
Danaher's investor conference call (access code 7663249). A replay
of the conference call will be available shortly after the
conclusion of the call and until Thursday,
April 27, 2017. You can access the replay dial-in
information on the "Investors" section of Danaher's website under
the subheading "Events & Presentations." In addition,
presentation materials relating to Danaher's results have been
posted to the "Investors" section of Danaher's website under the
subheading "Financial Reports & Earnings."
ABOUT DANAHER
Danaher is a global science and
technology innovator committed to helping its customers solve
complex challenges and improving quality of life around the world.
Its family of world class brands has leadership positions in some
of the most demanding and attractive industries, including health
care, environmental and industrial. With more than 20 operating
companies, Danaher's globally diverse team of over 62,000
associates is united by a common culture and operating system, the
Danaher Business System. For more information, please visit
www.danaher.com.
NON-GAAP MEASURES
In addition to the financial
measures prepared in accordance with generally accepted accounting
principles (GAAP), this earnings release also contains non-GAAP
financial measures. Calculations of these measures, the reasons why
we believe these measures provide useful information to investors,
a reconciliation of these measures to the most directly comparable
GAAP measures and other information relating to these non-GAAP
measures are included in the supplemental reconciliation schedule
attached.
FORWARD-LOOKING STATEMENTS
Statements in this release
that are not strictly historical, including the statements
regarding the Company's anticipated financial performance for the
second quarter and full year 2017, the Company's positioning to
take advantage of market growth opportunities, the Company's
opportunities to deliver long-term value creation and any other
statements regarding events or developments that we believe or
anticipate will or may occur in the future are "forward-looking"
statements within the meaning of the federal securities laws. There
are a number of important factors that could cause actual results,
developments and business decisions to differ materially from those
suggested or indicated by such forward-looking statements and you
should not place undue reliance on any such forward-looking
statements. These factors include, among other things,
deterioration of or instability in the economy, the markets we
serve and the financial markets, contractions or growth rates and
cyclicality of markets we serve, competition, our ability to
develop and successfully market new products and technologies and
expand into new markets, the potential for improper conduct by our
employees, agents or business partners, our compliance with
applicable laws and regulations (including regulations relating to
medical devices and the health care industry), our ability to
effectively address cost reductions and other changes in the health
care industry, our ability to successfully identify, consummate and
integrate appropriate acquisitions and successfully complete
divestitures and other dispositions, our ability to integrate the
recent acquisitions of Pall Corporation and Cepheid and achieve the
anticipated benefits of such transactions, contingent liabilities
relating to acquisitions and divestitures (including tax-related
and other contingent liabilities relating to the distributions of
each of Fortive Corporation and our communications business),
security breaches or other disruptions of our information
technology systems or violations of data privacy laws, the impact
of our restructuring activities on our ability to grow, risks
relating to potential impairment of goodwill and other intangible
assets, currency exchange rates, tax audits and changes in our tax
rate and income tax liabilities, changes in tax laws applicable to
multinational companies, litigation and other contingent
liabilities including intellectual property and environmental,
health and safety matters, the rights of the United States government to use, disclose
and license certain intellectual property we license if we fail to
commercialize it, risks relating to product, service or software
defects, product liability and recalls, risks relating to product
manufacturing, the impact of our debt obligations on our operations
and liquidity, our relationships with and the performance of our
channel partners, uncertainties relating to collaboration
arrangements with third parties, commodity costs and surcharges,
our ability to adjust purchases and manufacturing capacity to
reflect market conditions, reliance on sole sources of supply, the
impact of deregulation on demand for our products and services,
labor matters, international economic, political, legal, compliance
and business factors (including the impact of the UK's decision to
leave the EU), disruptions relating to man-made and natural
disasters, and pension plan costs. Additional information regarding
the factors that may cause actual results to differ materially from
these forward-looking statements is available in our SEC filings,
including our 2016 Annual Report on Form 10-K and Quarterly Report
on Form 10-Q for the first quarter of 2017. These forward-looking
statements speak only as of the date of this release and except to
the extent required by applicable law, the Company does not assume
any obligation to update or revise any forward-looking statement,
whether as a result of new information, future events and
developments or otherwise.
DANAHER
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
CONDENSED STATEMENTS OF EARNINGS
|
($ and shares in
millions, except per share amounts)
|
(unaudited)
|
|
|
|
Three-Month Period
Ended
|
|
March 31,
2017
|
|
April 1,
2016
|
Sales
|
$
|
4,205.7
|
|
|
$
|
3,924.1
|
|
Cost of
sales
|
(1,871.4)
|
|
|
(1,756.8)
|
|
Gross
profit
|
2,334.3
|
|
|
2,167.3
|
|
Operating
costs:
|
|
|
|
Selling, general and
administrative expenses
|
(1,443.0)
|
|
|
(1,328.1)
|
|
Research and
development expenses
|
(267.4)
|
|
|
(226.1)
|
|
Operating
profit
|
623.9
|
|
|
613.1
|
|
Nonoperating income
(expense):
|
|
|
|
Other
income
|
—
|
|
|
223.4
|
|
Interest
expense
|
(40.3)
|
|
|
(52.9)
|
|
Interest
income
|
1.6
|
|
|
—
|
|
Earnings from
continuing operations before income taxes
|
585.2
|
|
|
783.6
|
|
Income
taxes
|
(101.4)
|
|
|
(197.8)
|
|
Net earnings from
continuing operations
|
483.8
|
|
|
585.8
|
|
Earnings from
discontinued operations, net of income taxes
|
22.3
|
|
|
172.6
|
|
Net
earnings
|
$
|
506.1
|
|
|
$
|
758.4
|
|
Net earnings per
share from continuing operations:
|
|
|
|
Basic
|
$
|
0.70
|
|
|
$
|
0.85
|
|
Diluted
|
$
|
0.69
|
|
|
$
|
0.84
|
|
Net earnings per
share from discontinued operations:
|
|
|
|
Basic
|
$
|
0.03
|
|
|
$
|
0.25
|
|
Diluted
|
$
|
0.03
|
|
|
$
|
0.25
|
|
Net earnings per
share:
|
|
|
|
Basic
|
$
|
0.73
|
|
|
$
|
1.10
|
|
Diluted
|
$
|
0.72
|
|
|
$
|
1.09
|
|
Average common stock
and common equivalent shares outstanding:
|
|
|
|
Basic
|
694.3
|
|
|
688.6
|
|
Diluted
|
705.7
|
|
|
697.1
|
|
|
|
|
|
|
|
This information is
presented for reference only. A complete copy of Danaher's
Form 10-Q financial statements is available on the Company's
website (www.danaher.com).
|
DANAHER
CORPORATION
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
|
Adjusted Diluted
Net Earnings Per Share from Continuing Operations
|
|
|
|
|
Three-Month Period
Ended
|
|
|
March 31,
2017
|
|
April 1,
2016
|
|
Diluted Net
Earnings Per Share from Continuing Operations (GAAP)
|
$
|
0.69
|
|
|
$
|
0.84
|
|
|
Pretax gain on sale
of investments A
|
—
|
|
|
(0.32)
|
|
A
|
Pretax amortization
of acquisition-related intangible assets B
|
0.24
|
|
B
|
0.20
|
|
B
|
Tax effect of all
adjustments reflected above C
|
(0.05)
|
|
C
|
0.07
|
|
C
|
Discrete and other
tax-related adjustments D
|
(0.03)
|
|
D
|
—
|
|
|
Adjusted Diluted
Net Earnings Per Share from Continuing Operations (Non-
GAAP)
|
$
|
0.85
|
|
|
$
|
0.79
|
|
|
Forecasted
Adjusted Diluted Net Earnings Per Share from Continuing
Operations
|
|
|
|
|
|
|
Three-Month Period
Ending June 30,
2017
|
|
Year
Ending
December 31,
2017
|
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
|
Forecasted Diluted
Net Earnings Per Share from
Continuing Operations (GAAP) 1
|
$
|
0.77
|
|
|
$
|
0.80
|
|
|
$
|
3.13
|
|
|
$
|
3.23
|
|
|
Anticipated pretax
amortization of acquisition-
related intangible assets B
|
0.23
|
|
|
0.23
|
|
B
|
0.94
|
|
|
0.94
|
|
B
|
Tax effect of all
adjustments reflected above C
|
(0.05)
|
|
|
(0.05)
|
|
C
|
(0.19)
|
|
|
(0.19)
|
|
C
|
Discrete and other
tax-related adjustments D
|
—
|
|
|
—
|
|
|
(0.03)
|
|
|
(0.03)
|
|
D
|
Forecasted
Adjusted Diluted Net Earnings Per
Share from Continuing Operations (Non-GAAP)
1
|
$
|
0.95
|
|
|
$
|
0.98
|
|
|
$
|
3.85
|
|
|
$
|
3.95
|
|
|
|
1
|
The forward-looking
estimates set forth above do not reflect future gains and charges
that are inherently difficult to predict and estimate due to their
unknown timing, effect and/or significance, such as certain future
gains or losses on the sale of investments, acquisition or
divestiture-related gains or charges and other discrete tax items
(including excess tax benefits that exceed or fall below
anticipated levels).
|
Core Revenue
Growth
|
|
|
Three-Month
Period
Ended March 31,
2017 vs.
Comparable 2016
Period
|
Total Revenue
Growth from Continuing Operations (GAAP)
|
7.0
|
%
|
|
|
Components of Revenue
Growth
|
|
Core (non-GAAP)
2
|
2.5
|
%
|
Acquisitions
(non-GAAP)
|
6.0
|
%
|
Impact of currency
translation (non-GAAP)
|
(1.5)
|
%
|
Total Revenue Growth
from Continuing Operations (GAAP)
|
7.0
|
%
|
|
2
|
We use the term "core
revenue" to refer to GAAP revenue from continuing operations
excluding (1) sales from acquired businesses recorded prior to the
first anniversary of the acquisition less the amount of sales
attributable to divested businesses or product lines not considered
discontinued operations ("acquisition sales") and (2) the impact of
currency translation. The portion of GAAP revenue from
continuing operations attributable to currency translation is
calculated as the difference between (a) the period-to-period
change in revenue (excluding acquisition sales) and (b) the
period-to-period change in revenue (excluding acquisition sales)
after applying current period foreign exchange rates to the prior
year period. We use the term "core revenue growth" to refer
to the measure of comparing current period core revenue with the
corresponding period of the prior year.
|
DANAHER
CORPORATION
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(continued)
|
|
A
|
Gain on sale of
investments in the three-month period ended April 1, 2016 ($223
million pretax as presented in this line item, $140 million
after-tax).
|
|
|
B
|
Amortization of
acquisition-related intangible assets in the following historical
and forecasted periods ($ in millions) (only the pretax amounts set
forth below are reflected in the amortization line item
above):
|
|
|
|
|
|
|
|
|
|
|
Forecasted
|
|
|
|
Three-Month Period
Ended
|
|
Three-Month
Period Ending
|
|
Year
Ending
|
|
|
|
March 31,
2017
|
|
April 1,
2016
|
|
June 30,
2017
|
|
December 31,
2017
|
|
|
Pretax
|
$
|
166.1
|
|
|
$
|
139.2
|
|
|
$
|
166.0
|
|
|
$
|
664.0
|
|
|
|
After-tax
|
132.0
|
|
|
107.2
|
|
|
132.0
|
|
|
527.9
|
|
|
|
|
C
|
This line item
reflects the aggregate tax effect of all nontax adjustments
reflected in the table above. In addition, the footnotes
above indicate the after-tax amount of each individual adjustment
item. Danaher estimates the tax effect of the adjustment
items identified in the reconciliation schedule above by applying
Danaher's overall estimated effective tax rate to the pretax
amount, unless the nature of the item and/or the tax jurisdiction
in which the item has been recorded requires application of a
specific tax rate or tax treatment, in which case the tax effect of
such item is estimated by applying such specific tax rate or tax
treatment.
|
|
|
D
|
Represents discrete
income tax gains, primarily related to equity compensation related
excess tax benefits. On January 1, 2017, Danaher adopted the
updated accounting guidance required by ASU 2016-09,
Compensation—Stock Compensation, which requires income
statement recognition of all excess tax benefits and deficiencies
related to equity compensation. We exclude from Adjusted
Diluted Net EPS any excess tax benefits that exceed the levels we
believe are representative of historical experience. In the
first quarter of 2017, we anticipated $10 million of equity
compensation related excess tax benefits and realized $26 million
of excess tax benefits, and therefore we have excluded $16 million
of these benefits in the calculation of Adjusted Diluted Net
EPS. For the year ending December 31, 2017, excluding this
first quarter 2017 $16 million benefit, we anticipate $40 million
of equity compensation-related excess tax benefits which are
reflected in Forecasted Adjusted Diluted Net Earnings per
Share.
|
Statement Regarding Non-GAAP Measures
Each of the
non-GAAP measures set forth above should be considered in addition
to, and not as a replacement for or superior to, the comparable
GAAP measure, and may not be comparable to similarly titled
measures reported by other companies. Management believes
that these measures provide useful information to investors by
offering additional ways of viewing Danaher Corporation's
("Danaher" or the "Company") results that, when reconciled to the
corresponding GAAP measure, help our investors to:
- with respect to Adjusted Diluted Net EPS, understand the
long-term profitability trends of our business and compare our
profitability to prior and future periods and to our peers; and
- with respect to core revenue, identify underlying growth trends
in our business and compare our revenue performance with prior and
future periods and to our peers.
Management uses these non-GAAP measures to measure the Company's
operating and financial performance, and uses a non-GAAP measure
similar to Adjusted Diluted Net EPS in the Company's executive
compensation program.
The items excluded from the non-GAAP measures set forth above
have been excluded for the following reasons:
- With respect to Adjusted Diluted Net EPS, we exclude the
amortization of acquisition-related intangible assets because the
amount and timing of such charges are significantly impacted by the
timing, size, number and nature of the acquisitions we consummate.
While we have a history of significant acquisition activity we do
not acquire businesses on a predictable cycle, and the amount of an
acquisition's purchase price allocated to intangible assets and
related amortization term are unique to each acquisition and can
vary significantly from acquisition to acquisition. Exclusion of
this amortization expense facilitates more consistent comparisons
of operating results over time between our newly acquired and
long-held businesses, and with both acquisitive and non-acquisitive
peer companies. We believe however that it is important for
investors to understand that such intangible assets contribute to
revenue generation and that intangible asset amortization related
to past acquisitions will recur in future periods until such
intangible assets have been fully amortized. With respect to the
other items excluded from Adjusted Diluted Net EPS, we exclude
these items because they are of a nature and/or size that occur
with inconsistent frequency, occur for reasons that may be
unrelated to Danaher's commercial performance during the period
and/or we believe are not indicative of Danaher's ongoing operating
costs or gains in a given period; we believe that such items may
obscure underlying business trends and make comparisons of
long-term performance difficult.
- With respect to core revenue, (1) we exclude the impact of
currency translation because it is not under management's control,
is subject to volatility and can obscure underlying business
trends, and (2) we exclude the effect of acquisitions and divested
product lines because the nature, size and number of such
transactions can vary significantly from period to period and
between us and our peers, which we believe may obscure underlying
business trends and make comparisons of long-term performance
difficult.
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SOURCE Danaher Corporation