Danaher announces Q3 results

Danaher Corporation, Washington, DC, announced that net earnings for its third quarter ended Sept. 27, 2002 were $116.0 million, 32% above the corresponding 2001 period earnings of $87.7 million. Diluted earnings per share for the 2002 quarter were $0.74, an increase of 25% over the $0.59 reported for the 2001 third quarter. In accordance with the adoption of Statement of Financial Accounting Standards 142 (SFAS 142), the company stopped amortizing goodwill as of Jan. 1, 2002. Excluding goodwill amortization from the third quarter of 2001, earnings per share would have been $0.69. The third quarter of 2002 included a $1.8 million after-tax gain from the sale of real estate. Sales for the 2002 third quarter were $1,151.7 million, 28% higher than the $901.6 million for the quarter ended Sept. 28, 2001.

For the nine month period ended Sept. 27, 2002, net earnings, before the effect of a change in accounting principle in connection with the company's adoption of SFAS 142, were $302.4 million, up 14% from the $264.6 million reported in 2001. Diluted earnings per share for the 2002 nine month period of $1.95 (before the effect of the change in accounting principle related to SFAS 142) increased 10% from the $1.78 in 2001. Excluding goodwill amortization from the 2001 nine month period, earnings per share would have been $2.04. Net earnings for the 2002 nine month period, after the effect of a first quarter $173.8 million one-time non-cash charge for impairment of goodwill, were $128.7 million. Sales of $3,302.3 million for the 2002 nine month period were 15% higher than the $2,863.5 million reported in 2001.

H. Lawrence Culp, Jr., president and CEO, stated, "We are pleased with our third quarter results. Total sales for the quarter grew 28%, resulting primarily from our first quarter acquisitions of Videojet, Gilbarco and Viridor. Continued softness in several of our Process/Environmental Controls businesses was more than offset by strong performance in our Tools and Components segment, resulting in slightly positive core volume growth. Our pace to achieve record 2002 cash flow continues, with operating cash flow of $565.4 million for the nine month period, 31% higher than in 2001. We are keeping a cautious eye on a sluggish economy but remain comfortable that our momentum places us in a position to continue to outperform for the full year 2002.'

Responding to investor inquiries, Danaher issued the following statement October 14 :

'Contrary to certain rumors circulating in the market, Danaher does not spring-load its earnings and cash flows in any way. Danaher does not write-down assets of acquired businesses in order to create artificial profits. Such write-downs are not permitted under purchase accounting principles. Danaher complies with the letter and spirit of these and all other generally accepted accounting principles. Importantly, Danaher consistently includes all cash expenditures used to restructure both newly acquired and existing businesses as part of cash flow from operations, unlike the treatment used by some companies.'

In related news, Danaher has completed the previously announced acquisition of Thomson Industries, Inc.

Thomson Industries is the leading U.S. producer of linear motion control products - including linear actuators, ball screws, linear bearings and rails and precision gearboxes - for a range of precision motion applications in medical, industrial, aerospace and mobile off-highway markets.