$3.1 Billion ($11.2B total)
Steven M. Rales, Chairman
H. Lawrence Culp, Jr., President and CEO
Daniel L. Comas, Exec. VP and CFO
Daniel A. Raskas, VP—Corporate Development
NO. OF EMPLOYEES: 46,600 (total)
GLOBAL HEADQUARTERS: Washington, D.C.
There’s power in numbers, so the old saying goes. Part of Danaher’s success in the medical device areas has come not from one parent brand, but from a number of discrete divisions.
Danaher’s Life Sciences and Diagnostics units provide technology for clinical histopathology laboratories, hospital central labs and point-of-care locations, as well as government, academic and pharmaceutical research laboratories. The Dental division provides devices for dental operatory, including dental consumables, digital imaging products, precision dental hand pieces, treatment units and diagnostic systems. Divisions include such brands as AB Sciex, Dexis, Gendex, Imaging Sciences International, Instrumentarium Dental, Invetech (a contract manufacturer with which MPO readers may be familiar), KaVo, Dessert, Kerr, Leica Microsystems, Ormco, Pelton & Crane, Radiometer, Soredex and SybronEndo.
Unfortunately, no number of subsidiaries could keep the company completely protected from the past year’s economic downturn.
Overall, the company experienced a decline in revenue compared with fiscal 2008. For fiscal 2009 (ended Dec. 31), sales were $11.2 billion, compared with $12.7 billion the year before. Net profit also was down marginally to $1.2 billion from $1.3 billion. For medtech specifically, the company recorded sales of $3.1 billion (28 percent of the company’s overall revenue), down from approximately $3.3 billion for 2009. Despite the lower figures overall, operating profit for the company’s medical segment was up for fiscal 2009 to $396 million from $371 million, in part, according to company officials, due to a favorable ruling in a litigation settlement.
According to the firm, sales growth in acute care diagnostic and pathology diagnostic businesses was more than offset by sales declines in the life-sciences instrumentation and dental businesses. Price increases contributed 1 percent sales growth during the year. Ongoing restructuring activities are credited with keeping costs and material expenses down throughout the year. Increased sales of the company’s cardiac marking instrument also contributed to the year-over-year growth and are expected to further benefit sales in 2010. Sales for the firm’s dental businesses declined at a high single-digit rate.
Increased sales of orthodontia and infection control products during 2009 were offset by weaker demand for implants, endodontic products and general dentistry consumables. Lower capital spending by customers and inventory reductions in certain distribution channels drove year-over-year sales declines around 15 percent in the dental technologies businesses, according to the company. Danaher’s leadership expects that the acquisition of PaloDEx, a leading manufacturer of dental imaging products, in the fourth quarter of 2009, will provide additional sales growth for dental imaging business in 2010.
Across all divisions, the company spent nearly $2 billion on 18 acquisitions that were announced or closed in 2009, bringing in about $1.1 billion of new revenue. The largest transactions were in the firm’s life-sciences sector, with the acquisition of AB Sciex and MDS Analytical Technologies (for $450 million and $650 million in cash, respectively.)
Spending on medtech research and development dipped slightly for 2009 to $169 million from $190 million in 2008.
International sales helped the bottom line, with double-digit growth reported in China and the emerging economies of Latin America, officials said, while combined Europe and North America sales were flat. International sales made up 65 percent of the company’s medtech revenue.
“While 2009 was a year we hope not to see again any time soon,” said President and CEO Lawrence Culp, he said the company is off to an “encouraging start” in 2010. “We believe we are moving beyond stabilization to the early signs of growth, and with that the organic and inorganic investments we made throughout 2009 should position us well, as we strive to outperform again in 2010,” he said.