Danaher Corporation
DHR
Delayed Nyse - 04/24 10:01:46 pm
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Danaher : Reports First Quarter 2017 Results

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04/20/2017 | 12:00 pm

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- $0.85 $0.79
GAAP)





Forecasted Adjusted Diluted Net Earnings Per Share from Continuing Operations
-----------------------------------------------------------------------------


Three-Month Period Ending June 30, Year Ending
2017
December 31, 2017

Low End High End Low End High End
------- -------- ------- --------

Forecasted Diluted Net Earnings Per Share from $0.77 $0.80 $3.13 $3.23
Continuing Operations (GAAP) (1)

Anticipated pretax amortization of acquisition- 0.23 0.23 B 0.94 0.94 B
related intangible assets 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 $0.95 $0.98 $3.85 $3.95
Share from Continuing Operations (Non-GAAP) (1)




(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 Year Ending
Period 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


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