07.27.09
$3.3 Billion ($12.7B total)
KEY EXECUTIVES:
Steven M. Rales, Chairman
H. Lawrence Culp, Jr., President and CEO
Daniel L. Comas, Exec. VP and CFO
Daniel A. Raskas, VP—Corp. Development
NO. OF EMPLOYEES: 50,300 (companywide)
GLOBAL HEADQUARTERS: Washington, D.C.
As far as medical device companies go, Danaher seems to fly under the radar, better known perhaps by its brand names in the device space (companies such as DEXIS, Gendex, Imaging Sciences International, Invetech, KaVo, Leica Microsystems and SybronEndo) rather than recognized by the parent company’s moniker.
However, despite a global economic slowdown that accelerated through the second half of the year, the company’s bottom-line performance is anything but subtle. Danaher categorizes its sales according to four major business segments: Professional Instrumentation, which encompasses environmental and test and measurement products and services; Industrial Technologies, which accounts for products for motion and product identification; Tools and Components, which offers mechanical hand tools and products; and the Medical Technologies segment, which encompasses three key businesses: Dental Equipment and Consumables, Life Sciences, and Acute Care Diagnostics.
For fiscal 2008 (ended Dec. 31) the company’s overall revenue increased 15 percent to $12.7 billion, and adjusted earnings per share grew 10.5 percent. Net earnings for the year were $1.3 billion, down from $1.4 billion last year. Sales for the company’s medical products division (26 percent of the company’s total sales) grew to $3.3 billion, up from $3 billion last year—though sector profits were slightly off, down to $370 million from $393 million in fiscal 2007.
Sales growth for Medical Technologies primarily was driven by the segment’s acute care diagnostics, life sciences instrumentation and pathology diagnostics businesses, the company reported. Price increases accounted for approximately 1 percent of sales growth, which is reflected as a component of the sales from existing businesses. Company officials noted that fourth quarter 2008 restructuring activities adversely impacted operating profit margins for the division. In addition, a decline in demand for certain products in the dental technologies business, as well as increased sales force investment and research and development costs within the life-sciences business (R&D costs rose to $190 million in 2008 from $168 million in 2007), also adversely impacted year-over-year operating margin profit comparisons.
Revenues in the segment’s acute care diagnostics business grew at mid-single-digit rate in 2008 as compared to 2007. The year-over-year growth was primarily attributable to strong aftermarket consumables sales for the business-installed base of acute care diagnostic instrumentation, sales of the business’ compact version of its blood gas analysis instrument, as well as sales resulting from the launch of the business’ AQT cardiac marker during 2008.
The segment’s life science instrumentation business experienced high-single digit revenue growth in 2008 as compared to 2007. Continued strong sales of the business’ pathology diagnostics instrumentation and consumables offerings, as well as compound microscopy product offerings, drove the majority of this growth. All major geographic regions experienced growth. The acquisition of Surgipath Medical Industries in the fourth quarter of 2008 is expected to provide additional sales and earnings growth opportunities for the pathology diagnostics business. Surgipath, based in Richmond, Ill., is a provider of consumables and medical device accessories for clinical histology and research laboratories. Terms of the deal were not disclosed.
The company’s dental business revenue in 2008 was essentially flat as compared to 2007. Revenues in the dental technologies business grew at a mid-single digit rate through the first nine months of 2008 primarily driven by strong demand for imaging equipment.
However, a significant decline in demand in the fourth quarter for the majority of the products in the dental technologies’ business, including imaging equipment, more than offset this earlier growth resulting in low-single digit sales declines for the year, the company reported. Danaher officials attributed the decline in demand to customer decisions to cancel or delay capital spending, as well as inventory reductions in certain distribution channels. Offsetting the 2008 sales declines in the dental technologies business was low-single digit growth in the dental consumables business. Sales growth in the dental consumables’ businesses was primarily due to strong sales of general dentistry consumables and increased demand for endodontic and infection control products, offset by lower demand in the orthodontia product line.
Sales growth was experienced in all major geographic regions during the year. Particularly strong growth in emerging markets during the first nine months of the year moderated during the fourth quarter as a result of currency exchange rate volatility and economic uncertainty. Overall, a breakdown of annual sales were as follows: Europe, 41 percent; North America, 39 percent; Asia/Australia, 15 percent; and other regions, 5 percent.
Despite sales growth, Danaher officials did report some restructuring in the form of layoffs and work force reductions. The company, did not, however, detail which of its subsidiaries would be affected—though the Medical Technologies business incurred approximately $26 million in restructuring charges for the year. In the fourth quarter of 2008, restructuring activities resulted in net work force reductions of approximately 1,800 associates and 13 facility closures, the majority of which were completed as of Dec. 31. According to the company, remaining work force reductions and facility closure activities associated with the fourth quarter’s restructuring activities to be completed during 2009 “are not significant.”
“We have taken significant steps to prepare our businesses for what we believe will be a difficult year ahead. However, despite the current economic backdrop, we believe we are well positioned for 2009,” said H. Lawrence Culp Jr., president and CEO.
KEY EXECUTIVES:
Steven M. Rales, Chairman
H. Lawrence Culp, Jr., President and CEO
Daniel L. Comas, Exec. VP and CFO
Daniel A. Raskas, VP—Corp. Development
NO. OF EMPLOYEES: 50,300 (companywide)
GLOBAL HEADQUARTERS: Washington, D.C.
As far as medical device companies go, Danaher seems to fly under the radar, better known perhaps by its brand names in the device space (companies such as DEXIS, Gendex, Imaging Sciences International, Invetech, KaVo, Leica Microsystems and SybronEndo) rather than recognized by the parent company’s moniker.
However, despite a global economic slowdown that accelerated through the second half of the year, the company’s bottom-line performance is anything but subtle. Danaher categorizes its sales according to four major business segments: Professional Instrumentation, which encompasses environmental and test and measurement products and services; Industrial Technologies, which accounts for products for motion and product identification; Tools and Components, which offers mechanical hand tools and products; and the Medical Technologies segment, which encompasses three key businesses: Dental Equipment and Consumables, Life Sciences, and Acute Care Diagnostics.
For fiscal 2008 (ended Dec. 31) the company’s overall revenue increased 15 percent to $12.7 billion, and adjusted earnings per share grew 10.5 percent. Net earnings for the year were $1.3 billion, down from $1.4 billion last year. Sales for the company’s medical products division (26 percent of the company’s total sales) grew to $3.3 billion, up from $3 billion last year—though sector profits were slightly off, down to $370 million from $393 million in fiscal 2007.
Sales growth for Medical Technologies primarily was driven by the segment’s acute care diagnostics, life sciences instrumentation and pathology diagnostics businesses, the company reported. Price increases accounted for approximately 1 percent of sales growth, which is reflected as a component of the sales from existing businesses. Company officials noted that fourth quarter 2008 restructuring activities adversely impacted operating profit margins for the division. In addition, a decline in demand for certain products in the dental technologies business, as well as increased sales force investment and research and development costs within the life-sciences business (R&D costs rose to $190 million in 2008 from $168 million in 2007), also adversely impacted year-over-year operating margin profit comparisons.
Revenues in the segment’s acute care diagnostics business grew at mid-single-digit rate in 2008 as compared to 2007. The year-over-year growth was primarily attributable to strong aftermarket consumables sales for the business-installed base of acute care diagnostic instrumentation, sales of the business’ compact version of its blood gas analysis instrument, as well as sales resulting from the launch of the business’ AQT cardiac marker during 2008.
The segment’s life science instrumentation business experienced high-single digit revenue growth in 2008 as compared to 2007. Continued strong sales of the business’ pathology diagnostics instrumentation and consumables offerings, as well as compound microscopy product offerings, drove the majority of this growth. All major geographic regions experienced growth. The acquisition of Surgipath Medical Industries in the fourth quarter of 2008 is expected to provide additional sales and earnings growth opportunities for the pathology diagnostics business. Surgipath, based in Richmond, Ill., is a provider of consumables and medical device accessories for clinical histology and research laboratories. Terms of the deal were not disclosed.
The company’s dental business revenue in 2008 was essentially flat as compared to 2007. Revenues in the dental technologies business grew at a mid-single digit rate through the first nine months of 2008 primarily driven by strong demand for imaging equipment.
However, a significant decline in demand in the fourth quarter for the majority of the products in the dental technologies’ business, including imaging equipment, more than offset this earlier growth resulting in low-single digit sales declines for the year, the company reported. Danaher officials attributed the decline in demand to customer decisions to cancel or delay capital spending, as well as inventory reductions in certain distribution channels. Offsetting the 2008 sales declines in the dental technologies business was low-single digit growth in the dental consumables business. Sales growth in the dental consumables’ businesses was primarily due to strong sales of general dentistry consumables and increased demand for endodontic and infection control products, offset by lower demand in the orthodontia product line.
Sales growth was experienced in all major geographic regions during the year. Particularly strong growth in emerging markets during the first nine months of the year moderated during the fourth quarter as a result of currency exchange rate volatility and economic uncertainty. Overall, a breakdown of annual sales were as follows: Europe, 41 percent; North America, 39 percent; Asia/Australia, 15 percent; and other regions, 5 percent.
Despite sales growth, Danaher officials did report some restructuring in the form of layoffs and work force reductions. The company, did not, however, detail which of its subsidiaries would be affected—though the Medical Technologies business incurred approximately $26 million in restructuring charges for the year. In the fourth quarter of 2008, restructuring activities resulted in net work force reductions of approximately 1,800 associates and 13 facility closures, the majority of which were completed as of Dec. 31. According to the company, remaining work force reductions and facility closure activities associated with the fourth quarter’s restructuring activities to be completed during 2009 “are not significant.”
“We have taken significant steps to prepare our businesses for what we believe will be a difficult year ahead. However, despite the current economic backdrop, we believe we are well positioned for 2009,” said H. Lawrence Culp Jr., president and CEO.