WASHINGTON, Jan. 30,
2024 /PRNewswire/ -- Danaher Corporation (NYSE: DHR)
(the "Company") today announced results for the fourth quarter and
full year 2023. All results in this release reflect only
continuing operations unless otherwise noted.
Key Fourth Quarter 2023 Results
- Net earnings were $1.1 billion,
or $1.50 per diluted common share and
non-GAAP adjusted diluted net earnings per common share were
$2.09.
- Revenues decreased 10.0% year-over-year to $6.4 billion.
- Non-GAAP core revenue decreased 11.5%, including a 4.5%
non-GAAP base business core revenue decline.
- Operating cash flow was $1.6
billion and non-GAAP free cash flow was $1.2 billion.
Key Full Year 2023 Results
- Net earnings were $4.2 billion,
or $5.65 per diluted common share and
non-GAAP adjusted diluted net earnings per common share were
$7.58.
- Revenues decreased 10.5% year-over-year to $23.9 billion.
- Non-GAAP core revenue decreased 10.0%, including a 0.5%
non-GAAP base business core revenue decline.
- Operating cash flow was $6.5
billion and non-GAAP free cash flow was $5.1 billion.
Rainer M. Blair, President and
Chief Executive Officer, stated, "We delivered better-than-expected
revenue in each of our segments in the fourth quarter—led by
respiratory revenue at Cepheid. The combination of
higher-than-expected revenues and our team's strong execution
enabled us to exceed our margin and cash flow expectations in what
remains a dynamic market environment. Additionally, the
recently closed acquisition of Abcam enhances our portfolio and
expands our capabilities in the highly attractive proteomics
market."
Blair continued, "2023 was a transformational year for
Danaher. Following the spin-off of Veralto, we are a more
focused Life Sciences and Diagnostics Innovator with an enhanced
long-term growth and earnings trajectory. The unique
combination of our differentiated portfolio and our team's
DBS-driven execution provides a strong foundation for delivering
long-term shareholder value."
First Quarter and Full Year 2024 Outlook
The Company provides forecasted sales only on a non-GAAP basis
because of the difficulty in estimating the other components of
GAAP revenue, such as currency translation, acquisitions and
divested product lines.
Beginning with the first quarter of 2024 the Company will
continue to provide guidance for core revenue growth, but will no
longer provide guidance for, or report base business core revenue
as the pandemic has transitioned to an endemic state.
For the first quarter 2024, the Company anticipates that
non-GAAP core revenue will be down high-single digits
year-over-year. For full year 2024, the Company anticipates that
non-GAAP core revenue will be down low-single digits
year-over-year.
Conference Call and Webcast Information
Danaher will discuss its fourth quarter results and financial
guidance for the first quarter and full year 2024 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" and additional related materials will be
posted to the same section of Danaher's website. 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 800-245-3047
within the U.S. or by dialing +1 203-518-9765 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 earnings conference call (Conference ID: DHRQ423).
A replay of the conference call will be available shortly after the
conclusion of the call and until February
13, 2024. You can access the replay dial-in
information on the "Investors" section of Danaher's website under
the subheading "Events & Presentations."
ABOUT DANAHER
Danaher is a leading global life sciences and diagnostics
innovator, committed to accelerating the power of science and
technology to improve human health. Our businesses partner
closely with customers to solve many of the most important health
challenges impacting patients around the world. Danaher's
advanced science and technology - and proven ability to innovate -
help enable faster, more accurate diagnoses and help reduce the
time and cost needed to sustainably discover, develop and deliver
life-changing therapies. Focused on scientific excellence,
innovation and continuous improvement, our approximately 63,000
associates worldwide help ensure that Danaher is improving quality
of life for billions of people today, while setting the foundation
for a healthier, more sustainable tomorrow. Explore more at
www.danaher.com.
FORWARD-LOOKING STATEMENTS
Statements in this release that are not strictly historical,
including the statement regarding the anticipated financial results
for the first quarter and full year 2024, Danaher's enhanced
long-term growth and earnings trajectory, the Company's prospects
for delivering long-term shareholder value 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,
potential future, adverse impacts on our business, results of
operations and financial condition related to the COVID-19
pandemic, the impact of our debt obligations on our operations and
liquidity, deterioration of or instability in the economy, the
markets we serve and the financial markets, uncertainties relating
to national laws or policies, including laws or policies to protect
or promote domestic interests and/or address foreign competition,
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 rules relating to off-label marketing and other
regulations relating to medical devices and the health care
industry), the results of our clinical trials and perceptions
thereof, our ability to effectively address cost reductions and
other changes in the health care industry, our ability to
successfully identify and consummate appropriate acquisitions and
strategic investments and successfully complete divestitures and
other dispositions, our ability to integrate the businesses we
acquire (including the acquisition of Abcam plc) and achieve the
anticipated growth, synergies and other benefits of such
acquisitions, contingent liabilities and other risks relating to
acquisitions, investments, strategic relationships and divestitures
(including tax-related and other contingent liabilities relating to
past and future IPOs, split-offs or spin-offs), 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 with respect to our production capacity in times of
national emergency or with respect to intellectual
property/production capacity developed using government funding,
risks relating to product, service or software defects, product
liability and recalls, risks relating to fluctuations in the cost
and availability of the supplies we use (including commodities) and
labor we need for our operations, our relationships with and the
performance of our channel partners, uncertainties relating to
collaboration arrangements with third-parties, the impact of
deregulation on demand for our products and services, the impact of
climate change, legal or regulatory measures to address climate
change and our ability to address stakeholder expectations relating
to climate change, labor matters and our ability to recruit, retain
and motivate talented employees representing diverse backgrounds,
experiences and skill sets, non-U.S. economic, political, legal,
compliance, social and business factors (including the impact of
military conflicts), disruptions relating to man-made and natural
disasters, pension plan and healthcare costs, inflation and the
impact of our By-law exclusive forum provisions. 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 2022 Annual Report on
Form 10-K and Quarterly Report on Form 10-Q for the third quarter
of 2023. 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
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES
|
|
|
Diluted Net Earnings
Per Common Share from Continuing Operations and Adjusted Diluted
Net Earnings Per
Common Share from Continuing
Operations 1
|
|
Three-Month
Period Ended
|
|
Year
Ended
|
|
December 31,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Diluted Net Earnings
Per Common Share
From Continuing Operations (GAAP)
|
$
1.50
|
|
$
2.70
|
|
$
5.65
|
|
$
8.47
|
|
Amortization of
acquisition-related
intangible assets A
|
0.51
|
|
0.47
|
|
2.00
|
|
1.92
|
|
Fair value net (gains)
losses on
investments B
|
0.19
|
|
0.11
|
|
0.24
|
|
0.36
|
|
Impairments and other
charges C
|
0.05
|
|
—
|
|
0.10
|
|
0.06
|
|
Acquisition-related
items D
|
0.13
|
|
—
|
|
0.13
|
|
—
|
|
Litigation gains
E
|
(0.01)
|
|
—
|
|
(0.01)
|
|
—
|
|
Loss on partial
settlement of a defined
benefit plan F
|
—
|
|
—
|
|
—
|
|
0.01
|
|
Tax effect of the
above adjustments G
|
(0.18)
|
|
(0.13)
|
|
(0.47)
|
|
(0.46)
|
|
Discrete tax
adjustments H
|
(0.10)
|
|
(0.62)
|
|
(0.06)
|
|
(0.67)
|
|
MCPS "as if converted"
I
|
—
|
|
—
|
|
0.01
|
|
0.02
|
|
Rounding
|
—
|
|
0.01
|
|
(0.01)
|
|
—
|
|
Adjusted Diluted Net
Earnings Per
Common Share From Continuing
Operations (Non-GAAP)
|
$
2.09
|
|
$
2.54
|
|
$
7.58
|
|
$
9.71
|
|
1
|
Each of the per share
adjustment amounts above have been calculated assuming the
Mandatory Convertible Preferred Stock ("MCPS") had been converted
into shares of common stock as of all dates presented.
|
|
Notes to
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
A
|
Amortization of
acquisition-related intangible assets in the following historical
periods ($ in millions) (only the pretax amounts set forth below
are reflected in the amortization line item above):
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
December 31,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Pretax
|
$
380
|
|
$
352
|
|
$
1,491
|
|
$
1,434
|
|
After-tax
|
317
|
|
286
|
|
1,226
|
|
1,166
|
|
|
|
B
|
Net (gains) losses,
including impairments, on the Company's equity and limited
partnership investments recorded in the following historical
periods ($ in millions) (only the pretax amounts set forth below
are reflected in the fair value net (gains) losses on investments
line above):
|
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
December 31,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Pretax
|
$
139
|
|
$
85
|
|
$
182
|
|
$
271
|
|
After-tax
|
98
|
|
57
|
|
130
|
|
198
|
|
C
|
Impairment charge
related to technology-based intangible assets in the Diagnostics
segment recorded in the three-month period and year ended December
31, 2023 ($23 million pretax as reported in this line,
$18 million after-tax) and technology-based intangible assets
and other assets in the Biotechnology segment recorded in the
three-month period and year ended December 31, 2023
($12 million and $54 million pretax as reported in this
line item, $8 million and $40 million after-tax,
respectively). In the year ended December 31, 2022 charges
incurred primarily related to impairments of accounts receivable
and inventory as well as accruals for contractual obligations in
Russia ($42 million pretax as reported in this line item, $39
million after-tax).
|
|
|
|
D
|
Transaction costs
deemed significant, settlement of pre-acquisition share-based
payment awards and fair value adjustments to inventory in each case
related to the acquisition of Abcam in the three-month period and
year ended December 31, 2023 ($95 million pretax as reported in
this line item, $75 million after-tax). The Company deems
acquisition-related transaction costs incurred in a given period to
be significant (generally relating to the Company's larger
acquisitions) if it determines that such costs exceed the range of
acquisition-related transaction costs typical for Danaher in a
given period.
|
|
|
|
E
|
Gain related to
settlement of litigation in the Life Sciences segment recorded in
the three-month period and year ended December 31, 2023 ($10
million pretax as reported in this line, $8 million
after-tax).
|
|
|
|
F
|
Loss on a partial
settlement of a defined benefit plan as a result of the transfer of
a portion of the Company's non-U.S. pension liabilities related to
one defined benefit plan to a third-party in the year ended
December 31, 2022 ($10 million pretax as reported in this line
item, $9 million after-tax).
|
|
|
|
G
|
This line item reflects
the aggregate tax effect of all non-tax adjustments reflected in
the preceding line items of the table. In addition, the
footnotes above indicate the after-tax amount of each individual
adjustment item. Danaher estimates the tax effect of each
adjustment item 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. The MCPS dividends are not tax
deductible and therefore the tax effect of the adjustments does not
include any tax impact of the MCPS dividends.
|
|
|
|
H
|
Discrete tax
adjustments and other tax-related adjustments for the three-month
period ended December 31, 2023, include the impact of net discrete
tax benefits of $71 million due principally to net deferred tax
benefits resulting from changes in estimates related to prior year
tax filing positions and the release of reserves for uncertain tax
positions due to the expiration of statutes of limitation, net of
charges related to changes in estimates associated with prior
period uncertain tax positions. Discrete tax adjustments and other
tax-related adjustments for the year ended December 31, 2023
include the impact of net discrete tax benefits of $47 million due
principally to net discrete tax benefits from changes in estimates
related to prior year tax filing positions, the release of reserves
for uncertain tax positions due to the expiration of statutes of
limitation and excess tax benefits from stock-based compensation,
net of charges related to tax costs related to the separation
of Veralto Corporation, tax costs from legal and operational
actions undertaken to realign certain of its businesses and changes
in estimates associated with prior period uncertain tax
positions. Discrete tax adjustments for both the three-month
period and year ended December 31, 2022, include the impact of
net discrete tax benefits of $459 million and $500 million,
respectively, due principally to net deferred tax benefits
resulting from legal and operational actions undertaken to realign
certain of Danaher's businesses, as well as excess tax benefits
from stock-based compensation, the release of reserves for
uncertain tax positions due to the expiration of statutes of
limitation and audit settlements and changes in estimates related
to prior year tax filing positions, net of changes in estimates
associated with prior period uncertain tax positions. The
Company anticipates excess tax benefits from stock compensation of
approximately $7 million per quarter and therefore excludes
benefits in excess of this amount in the calculation of adjusted
diluted net earnings from continuing operations per common
share.
|
|
|
|
I
|
In March 2019, the
Company issued $1.65 billion in aggregate liquidation preference of
4.75% MCPS Series A. In May 2020, the Company issued $1.72
billion in aggregate liquidation preference of 5.0% MCPS Series
B. Dividends on the MCPS Series A and Series B were payable
on a cumulative basis at an annual rate of 4.75% and 5.0%,
respectively, on the liquidation preference of $1,000 per
share. Each share of MCPS Series A converted on April 15,
2022 into 6.6632 shares of Danaher's common stock. Each share
of MCPS Series B converted on April 17, 2023 into 5.0175 shares of
Danaher's common stock. For the calculation of net earnings
per common share from continuing operations, the impact of the
dilutive MCPS is calculated under the "if-converted" method and the
related MCPS dividends are excluded. For the purposes of
calculating adjusted earnings per common share from continuing
operations, the Company has excluded the paid MCPS cash dividends
and assumed the "if-converted" method of share dilution (the
incremental shares of common stock deemed outstanding applying the
"if-converted" method of calculating share dilution only with
respect to any MCPS the conversion of which would be dilutive in
the particular period are referred to as the "Converted Shares")
for any MCPS that were anti-dilutive for the given period.
For additional information about the impact of the MCPS on the
calculation of diluted EPS, see note 2 in the Average and Adjusted
Average Common Stock and Common Equivalent Diluted Shares
Outstanding table below.
|
|
Average and Adjusted
Average Common Stock and Common Equivalent Diluted Shares
Outstanding
(shares in
millions)
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
December 31,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Average common stock
and common
equivalent shares outstanding - diluted
(GAAP)
2
|
746.1
|
|
745.7
|
|
743.1
|
|
737.1
|
|
Converted shares
3
|
—
|
|
—
|
|
2.5
|
|
8.6
|
|
Adjusted average common
stock and common
equivalent shares outstanding - diluted (non-
GAAP)
|
746.1
|
|
745.7
|
|
745.6
|
|
745.7
|
|
2
|
The impact of the
MCPS Series B calculated under the if-converted method was
anti-dilutive for the years ended December 31, 2023 and 2022,
and as such, approximately 2.5 million shares and
8.6 million shares, respectively, underlying the MCPS Series B
are excluded from the calculation of diluted EPS for the periods
and the related MCPS Series B dividends of $21 million and $86
million were included in the calculation of net earnings for
diluted EPS for the respective periods.
The impact of the MCPS Series B calculated under the if-converted
method was dilutive for the three-month period ended December 31,
2022, and as such 8.6 million shares underlying the MCPS
Series B were included in the calculation of diluted EPS in the
period and the related MCPS Series B dividends of $22 million were
excluded from the calculation of net earnings for diluted EPS for
the period.
The impact of the MCPS Series A calculated under the if-converted
method was dilutive for the year ended December 31, 2022, and as
such 3.0 million shares underlying the MCPS Series A were
included in the calculation of diluted EPS in the periods and the
related MCPS Series A dividends of $20 million were excluded from
the calculation of net earnings for diluted EPS for the
period.
|
|
|
|
3
|
The number of converted
shares assumes the conversion of all MCPS and issuance of the
underlying shares applying the "if-converted" method of accounting
and using the actual conversion rates for the year ended December
31, 2023 and an average 20 trading-day trailing Volume Weighted
Average Price of $266.27 as of December 31, 2022.
|
|
Sales (Decline)
Growth by Segment, Core Sales (Decline) Growth by Segment and Base
Business Core Sales
Decline by Segment
|
|
|
% Change Three-Month
Period Ended December 31, 2023 vs. Comparable
2022 Period
|
|
|
|
Segments
|
|
Total
Company
|
|
Biotechnology
|
|
Life
Sciences
|
|
Diagnostics
|
|
Total sales decline
(GAAP)
|
(10.0) %
|
|
(21.0) %
|
|
(1.0) %
|
|
(8.5) %
|
|
Impact of:
|
|
|
|
|
|
|
|
|
Acquisitions/divestitures
|
(0.5) %
|
|
— %
|
|
(2.5) %
|
|
— %
|
|
Currency exchange
rates
|
(1.0) %
|
|
(1.5) %
|
|
(0.5) %
|
|
— %
|
|
Core sales decline
(non-GAAP)
|
(11.5) %
|
|
(22.5) %
|
|
(4.0) %
|
|
(8.5) %
|
|
Impact of COVID-19
related testing, vaccines and
therapeutics
|
7.0 %
|
|
|
|
|
|
|
|
Base business core
sales decline (non-GAAP)
|
(4.5) %
|
|
|
|
|
|
|
|
% Change Year Ended
December 31, 2023 vs. Comparable 2022 Period
|
|
|
|
Segments
|
|
Total
Company
|
|
Biotechnology
|
|
Life
Sciences
|
|
Diagnostics
|
|
Total sales (decline)
growth (GAAP)
|
(10.5) %
|
|
(18.0) %
|
|
1.5 %
|
|
(11.5) %
|
|
Impact of:
|
|
|
|
|
|
|
|
|
Acquisitions/divestitures
|
(0.5) %
|
|
— %
|
|
(1.5) %
|
|
— %
|
|
Currency exchange
rates
|
1.0 %
|
|
— %
|
|
1.0 %
|
|
1.0 %
|
|
Core sales (decline)
growth (non-GAAP)
|
(10.0) %
|
|
(18.0) %
|
|
1.0 %
|
|
(10.5) %
|
|
Impact of COVID-19
related testing, vaccines and
therapeutics
|
9.5 %
|
|
|
|
|
|
|
|
Base business core
sales decline (non-GAAP)
|
(0.5) %
|
|
|
|
|
|
|
|
|
Note: We expect overall
demand for the Company's COVID-19 related products to continue
moderating as the pandemic has evolved toward endemic status.
We believe certain demand for the Company's products that support
COVID-19 related vaccines and therapeutics and COVID-19 testing
(which includes solutions that test for COVID-19 and other
respiratory illnesses simultaneously) will continue, though that
demand will likely be uncertain and will vary from period to
period. At the beginning of 2022, the Company believed that
on a relative basis, the level of ongoing demand for products
supporting COVID-19 testing would be subject to more fluctuations
in demand than the level of demand for products supporting COVID-19
related vaccines and therapeutics, due in part to expected COVID-19
case levels, vaccination rates and use of therapies. However,
as a result of lower vaccination rates and the spread of less
severe variants of the virus, 2022 demand for the Company's
products supporting COVID-19 related vaccines and therapeutics
fluctuated and declined more than anticipated at the beginning of
the year. Therefore, beginning with the first quarter of
2023, we have revised the definition of "base business core sales
growth" on a basis that not only excludes revenues related to
COVID-19 testing but also excludes revenues from products that
support COVID-19 related vaccines and therapeutics. We
believe this adjusted definition of "base business core sales
growth" provides more useful information to investors by
facilitating period-to-period comparisons of our financial
performance and identifying underlying growth trends in the
Company's business that otherwise may be obscured by fluctuations
in demand for COVID-19 related products.
|
|
|
Forecasted Core
Sales Growth
|
|
|
The Company provides
forecasted sales only on a non-GAAP basis because of the difficulty
in estimating the other components of GAAP revenue, such as
currency translation, acquisitions and divested product
lines. Beginning with the first quarter of 2024 the Company
will continue to provide guidance for core revenue growth, but will
no longer provide guidance for, or report base business core
revenue as the pandemic has transitioned to an endemic
state.
|
|
|
% Change
Three-Month
Period Ending March
29, 2024 vs.
Comparable 2023
Period
|
|
% Change Year
Ending
December 31, 2024 vs.
Comparable 2023
Period
|
|
Core sales decline
(non-GAAP)
|
-High-single
digit
|
|
-Low-single
digit
|
|
Operating Profit
Margins from Continuing Operations; Year-Over-Year Core Operating
Margin Changes from
Continuing Operations
|
|
|
|
|
|
Segments
|
|
|
Total
Company
|
|
Biotechnology
|
|
Life
Sciences
|
|
Diagnostics
|
|
Three-Month Period
Ended December 31, 2022 Operating
Profit Margins from Continuing Operations (GAAP)
|
28.00 %
|
|
31.20 %
|
|
20.10 %
|
|
33.40 %
|
|
Fourth quarter 2023
impact from operating profit margins
of businesses that have been owned for less than one
year or were disposed of during such period and did not
qualify as discontinued operations
|
(0.25)
|
|
—
|
|
(0.75)
|
|
—
|
|
Fourth quarter 2023
transaction costs deemed
significant, settlement of pre-acquisition share-based
payment awards and fair value adjustments to inventory,
in each case related to the acquisition of Abcam
|
(1.50)
|
|
—
|
|
(4.90)
|
|
—
|
|
Fourth quarter 2023
impairment charge related to
technology-based intangible assets in the Diagnostics
segment and technology-based intangible assets in the
Biotechnology segment
|
(0.55)
|
|
(0.70)
|
|
—
|
|
(0.90)
|
|
Fourth quarter 2023
gain from the resolution of a
litigation contingency in the Life Sciences segment
|
0.15
|
|
—
|
|
0.55
|
|
—
|
|
Year-over-year core
operating profit margin changes for
the fourth quarter 2023 (defined as all year-over-year
operating profit margin changes other than the changes
identified in the line items above) (non-GAAP)
|
(4.95)
|
|
(6.90)
|
|
(2.80)
|
|
(4.30)
|
|
Three-Month Period
Ended December 31, 2023 Operating
Profit Margins from Continuing Operations (GAAP)
|
20.90 %
|
|
23.60 %
|
|
12.20 %
|
|
28.20 %
|
|
|
|
|
Segments
|
|
|
Total
Company
|
|
Biotechnology
|
|
Life
Sciences
|
|
Diagnostics
|
|
Year Ended December
31, 2022 Operating Profit Margins
from Continuing Operations (GAAP)
|
28.30 %
|
|
34.30 %
|
|
20.10 %
|
|
31.70 %
|
|
Full year 2023 impact
from operating profit margins of
businesses that have been owned for less than one year
or were disposed of during such period and did not
qualify as discontinued operations
|
(0.20)
|
|
(0.10)
|
|
(0.45)
|
|
(0.05)
|
|
Fourth quarter 2023
transaction costs deemed
significant, settlement of pre-acquisition share-based
payment awards and fair value adjustments to inventory,
in each case related to the acquisition of Abcam
|
(0.40)
|
|
—
|
|
(1.30)
|
|
—
|
|
Fourth quarter 2023
impairment charge related to
technology-based intangible assets in the Diagnostics
segment and second and fourth quarter 2023 impairment
charges related to technology-based intangible assets
and other assets in the Biotechnology segment
|
(0.35)
|
|
(0.75)
|
|
—
|
|
(0.25)
|
|
Fourth quarter 2023
gain from the resolution of a
litigation contingency in the Life Sciences segment
|
0.05
|
|
—
|
|
0.15
|
|
—
|
|
Full year 2022
impairments of accounts receivable and
inventory as well as accruals for contractual obligations
in Russia
|
0.15
|
|
0.15
|
|
0.35
|
|
0.05
|
|
Year-over-year core
operating profit margin changes for
full year 2023 (defined as all year-over-year operating
profit margin changes other than the changes identified
in the line items above) (non-GAAP)
|
(5.75)
|
|
(7.00)
|
|
(1.95)
|
|
(6.35)
|
|
Year Ended December 31,
2023 Operating Profit Margins
from Continuing Operations (GAAP)
|
21.80 %
|
|
26.60 %
|
|
16.90 %
|
|
25.10 %
|
|
Note: The Company deems
acquisition-related transaction costs incurred in a given period to
be significant (generally relating to the Company's larger
acquisitions) if it determines that such costs exceed the range of
acquisition-related transaction costs typical for Danaher in a
given period.
|
|
Cash Flow from
Continuing Operations and Free Cash Flow from Continuing
Operations
($ in
millions)
|
|
|
Three-Month Period
Ended
|
|
Year-over-
Year
Change
|
|
Year
Ended
|
|
Year-over-
Year
Change
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
Total Cash Flows
from Continuing
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash provided by
operating
activities from continuing operations
(GAAP)
|
$
1,591
|
|
$
2,200
|
|
|
|
$
6,490
|
|
$
7,613
|
|
|
|
Total cash used in
investing activities
from continuing operations (GAAP)
|
$
(6,017)
|
|
$
(804)
|
|
|
|
$
(7,048)
|
|
$
(2,145)
|
|
|
|
Total cash (used in)
provided by
financing activities from continuing
operations (GAAP)
|
$
(1,819)
|
|
$
(906)
|
|
|
|
$
154
|
|
$
(2,570)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow from
Continuing
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash provided by
operating
activities from continuing operations
(GAAP)
|
$
1,591
|
|
$
2,200
|
|
~(27.5)
%
|
|
$
6,490
|
|
$
7,613
|
|
~(15.0)
%
|
|
Less: payments for
additions to
property, plant & equipment (capital
expenditures) from continuing
operations (GAAP)
|
(434)
|
|
(321)
|
|
|
|
(1,383)
|
|
(1,118)
|
|
|
|
Plus: proceeds from
sales of property,
plant & equipment (capital disposals)
from continuing operations (GAAP)
|
6
|
|
—
|
|
|
|
12
|
|
9
|
|
|
|
Free cash flow from
continuing
operations (non-GAAP)
|
$
1,163
|
|
$
1,879
|
|
~(38.0)
%
|
|
$
5,119
|
|
$
6,504
|
|
~(21.5)
%
|
|
Note: The Company
defines free cash flow as operating cash flows from continuing
operations, less payments for additions to property, plant and
equipment from continuing operations ("capital expenditures") plus
the proceeds from sales of plant, property and equipment from
continuing operations ("capital disposals"). All amounts
presented above reflect only continuing operations.
|
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:
- with respect to the profitability-related non-GAAP measures,
understand the long-term profitability trends of our business and
compare our profitability to prior and future periods and to our
peers;
- with respect to core sales and related non-GAAP sales measures,
identify underlying growth trends in our business and compare our
sales performance with prior and future periods and to our peers;
and
- with respect to free cash flow from continuing operations (the
"FCF Measure"), understand Danaher's ability to generate cash
without external financings, strengthen its balance sheet, invest
in its business and grow its business through acquisitions and
other strategic opportunities (although a limitation of free cash
flow is that it does not take into account the Company's debt
service requirements and other non-discretionary expenditures, and
as a result the entire free cash flow amount is not necessarily
available for discretionary expenditures).
We expect overall demand for the Company's COVID-19 related
products to continue moderating as the pandemic has evolved toward
endemic status. We believe certain demand for the Company's
products that support COVID-19 related vaccines and therapeutics
and COVID-19 testing (which includes solutions that test for
COVID-19 and other respiratory illnesses simultaneously) will
continue, though that demand will likely be uncertain and will vary
from period to period. At the beginning of 2022, the Company
believed that on a relative basis, the level of ongoing demand for
products supporting COVID-19 testing would be subject to more
fluctuations in demand than the level of demand for products
supporting COVID-19 related vaccines and therapeutics, due in part
to expected COVID-19 case levels, vaccination rates and use of
therapies. However, as a result of lower vaccination rates
and the spread of less severe variants of the virus, 2022 demand
for the Company's products supporting COVID-19 related vaccines and
therapeutics fluctuated and declined more than anticipated at the
beginning of the year. Therefore, beginning with the first
quarter of 2023, we have revised the definition of "base business
core sales growth" on a basis that not only excludes revenues
related to COVID-19 testing but also excludes revenues from
products that support COVID-19 related vaccines and
therapeutics. We believe this adjusted definition of "base
business core sales growth" provides more useful information to
investors by facilitating period-to-period comparisons of our
financial performance and identifying underlying growth trends in
the Company's business that otherwise may be obscured by
fluctuations in demand for COVID-19 related products.
Management uses the non-GAAP measures referenced above to
measure the Company's operating and financial performance, and uses
core sales and non-GAAP measures similar to Adjusted Diluted Net
Earnings Per Common Share from Continuing Operations and the FCF
Measure 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 Earnings Per Common Share
from Continuing Operations:
- Amortization of Intangible Assets: 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
sales generation and that intangible asset amortization related to
past acquisitions will recur in future periods until such
intangible assets have been fully amortized.
- Restructuring Charges: We exclude costs incurred pursuant to
discrete restructuring plans that are fundamentally different (in
terms of the size, strategic nature and planning requirements, as
well as the inconsistent frequency, of such plans) from the ongoing
productivity improvements that result from application of the
Danaher Business System. Because these restructuring plans are
incremental to the core activities that arise in the ordinary
course of our business and we believe are not indicative of
Danaher's ongoing operating costs in a given period, we exclude
these costs to facilitate a more consistent comparison of operating
results over time.
- Other Adjustments: With respect to the other items excluded
from Adjusted Diluted Net Earnings Per Common Share from Continuing
Operations, 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 that such items may obscure
underlying business trends and make comparisons of long-term
performance difficult. For example, we excluded the first quarter
2022 charge for asset impairments, accruals for contractual
obligations and similar items related to our Russia operations because, even though it is
possible we could incur additional charges in the future, we do not
believe these charges are indicative of Danaher's ongoing operating
costs.
- With respect to adjusted average common stock and common
equivalent shares outstanding, Danaher's Mandatory Convertible
Preferred Stock ("MCPS") Series A converted into Danaher common
stock on April 15, 2022 and the MCPS
Series B mandatorily converted into Danaher common stock on the
mandatory conversion date of April 17,
2023 (unless converted or redeemed earlier in accordance
with the terms of the applicable certificate of designations). With
respect to the calculation of Adjusted Diluted Net Earnings Per
Common Share from Continuing Operations, we apply the "if
converted" method of share dilution to the MCPS Series A and B in
all applicable periods irrespective of whether such preferred
shares were dilutive or anti-dilutive in the period. We believe
this presentation provides useful information to investors by
helping them understand the net impact on Danaher's earnings per
share-related measures irrespective of the period.
- With respect to core operating profit margin changes, in
addition to the explanation set forth in the bullets above relating
to "restructuring charges" and "other adjustments", we exclude the
impact of businesses owned for less than one year (or disposed of
during such period and not treated as discontinued operations)
because the timing, size, number and nature of such transactions
can vary significantly from period to period and may obscure
underlying business trends and make comparisons of long-term
performance difficult.
- With respect to core sales related measures, (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 timing, size, number and nature
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.
- With respect to the FCF Measure, we exclude payments for
additions to property, plant and equipment (net of the proceeds
from capital disposals) to demonstrate the amount of operating cash
flow for the period that remains after accounting for the Company's
capital expenditure requirements.
The Company provides forecasted sales only on a non-GAAP basis
because of the difficulty in estimating the other components of
GAAP revenue, such as currency translation, acquisitions and
divested product lines.
|
DANAHER CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS (unaudited)
($ in millions,
except per share amount)
|
|
|
As of December
31
|
|
2023
|
|
2022
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
equivalents
|
$
5,864
|
|
$
5,995
|
|
Trade accounts
receivable, less allowance for doubtful accounts of $120 as of
December 31, 2023 and $92 as of December 31,
2022
|
3,922
|
|
4,102
|
|
Inventories
|
2,594
|
|
2,765
|
|
Prepaid expenses and
other current assets
|
1,557
|
|
1,741
|
|
Current assets,
discontinued operations
|
—
|
|
1,280
|
|
Total current
assets
|
13,937
|
|
15,883
|
|
Property, plant and
equipment, net
|
4,553
|
|
3,709
|
|
Other long-term
assets
|
3,644
|
|
4,160
|
|
Goodwill
|
41,608
|
|
37,276
|
|
Other intangible
assets, net
|
20,746
|
|
19,821
|
|
Other assets,
discontinued operations
|
—
|
|
3,501
|
|
Total assets
|
$
84,488
|
|
$
84,350
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Notes payable and
current portion of long-term debt
|
$
1,695
|
|
$
591
|
|
Trade accounts
payable
|
1,766
|
|
1,856
|
|
Accrued expenses and
other liabilities
|
4,813
|
|
4,815
|
|
Current liabilities,
discontinued operations
|
—
|
|
1,127
|
|
Total current
liabilities
|
8,274
|
|
8,389
|
|
Other long-term
liabilities
|
6,017
|
|
6,498
|
|
Long-term
debt
|
16,707
|
|
19,086
|
|
Long-term liabilities,
discontinued operations
|
—
|
|
287
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock, no
par value, 15.0 million shares authorized; no shares issued and
outstanding as of December 31, 2023; 1.72 million shares of
5.00% Mandatory
Convertible Preferred Stock, Series B, issued and outstanding as of
December 31,
2022
|
—
|
|
1,668
|
|
Common stock - $0.01
par value, 2.0 billion shares authorized; 880.5 million issued
and 739.2 million outstanding as of December 31, 2023; 869.3
million issued and
728.3 million outstanding as of December 31, 2022
|
9
|
|
9
|
|
Additional paid-in
capital
|
14,151
|
|
12,072
|
|
Retained
earnings
|
41,074
|
|
39,205
|
|
Accumulated other
comprehensive income (loss)
|
(1,748)
|
|
(2,872)
|
|
Total Danaher
stockholders' equity
|
53,486
|
|
50,082
|
|
Noncontrolling
interests
|
4
|
|
8
|
|
Total stockholders'
equity
|
53,490
|
|
50,090
|
|
Total liabilities and
stockholders' equity
|
$
84,488
|
|
$
84,350
|
|
This information is
presented for reference only. Final audited financial
statements will include footnotes, which should be referenced when
available, to more fully understand the contents of this
information.
|
|
DANAHER CORPORATION
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF EARNINGS (unaudited)
($ and shares in
millions, except per share amounts)
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
Sales
|
$
6,405
|
|
$
7,134
|
|
$
23,890
|
|
$
26,643
|
|
|
Cost of
sales
|
(2,626)
|
|
(2,908)
|
|
(9,856)
|
|
(10,455)
|
|
|
Gross profit
|
3,779
|
|
4,226
|
|
14,034
|
|
16,188
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
expenses
|
(2,035)
|
|
(1,829)
|
|
(7,329)
|
|
(7,124)
|
|
|
Research and
development expenses
|
(407)
|
|
(400)
|
|
(1,503)
|
|
(1,528)
|
|
|
Operating
profit
|
1,337
|
|
1,997
|
|
5,202
|
|
7,536
|
|
|
Nonoperating income
(expense):
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
(137)
|
|
(69)
|
|
(175)
|
|
(227)
|
|
|
Interest
expense
|
(85)
|
|
(62)
|
|
(286)
|
|
(204)
|
|
|
Interest
income
|
117
|
|
29
|
|
303
|
|
41
|
|
|
Earnings from
continuing operations
before income taxes
|
1,232
|
|
1,895
|
|
5,044
|
|
7,146
|
|
|
Income taxes
|
(111)
|
|
117
|
|
(823)
|
|
(818)
|
|
|
Net earnings from
continuing operations
|
1,121
|
|
2,012
|
|
4,221
|
|
6,328
|
|
|
Earnings from
discontinued operations,
net of income taxes
|
(42)
|
|
220
|
|
543
|
|
881
|
|
|
Net earnings
|
1,079
|
|
2,232
|
|
4,764
|
|
7,209
|
|
|
Mandatory convertible
preferred stock
dividends
|
—
|
|
(22)
|
|
(21)
|
|
(106)
|
|
|
Net earnings
attributable to common
stockholders
|
$
1,079
|
|
$
2,210
|
|
$
4,743
|
|
$
7,103
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common
share from
continuing operations:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
1.52
|
|
$
2.73
|
|
$
5.70
|
(a)
|
$
8.58
|
|
|
Diluted
|
$
1.50
|
|
$
2.70
|
|
$
5.65
|
|
$
8.47
|
(a)
|
|
Net earnings per common
share from
discontinued operations:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.06)
|
|
$
0.30
|
|
$
0.74
|
|
$
1.22
|
(a)
|
|
Diluted
|
$
(0.06)
|
|
$
0.30
|
|
$
0.73
|
(a)
|
$
1.20
|
|
|
Net earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
1.46
|
|
$
3.03
|
|
$
6.44
|
(a)
|
$
9.80
|
|
|
Diluted
|
$
1.45
|
(b)
|
$
2.99
|
(b)
|
$
6.38
|
(a)
|
$
9.66
|
(a),(b)
|
|
Average common stock
and common
equivalent shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
739.8
|
|
728.9
|
|
736.5
|
|
725.1
|
|
|
Diluted
|
746.1
|
|
745.7
|
|
743.1
|
|
737.1
|
|
|
(a)
|
Net earnings per common
share amount for the relevant three-month periods do not add to the
full year period amount due to rounding.
|
|
(b)
|
Net earnings per common
share amount does not add due to rounding.
|
|
|
|
This information is
presented for reference only. Final audited financial
statements will include footnotes, which should be referenced when
available, to more fully understand the contents of this
information.
|
|
DANAHER CORPORATION
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)
($ in
millions)
|
|
|
Year Ended December
31
|
|
2023
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net
earnings
|
$
4,764
|
|
$
7,209
|
|
Less: earnings from
discontinued operations, net of income taxes
|
(543)
|
|
(881)
|
|
Net earnings from
continuing operations
|
4,221
|
|
6,328
|
|
Noncash
items:
|
|
|
|
|
Depreciation
|
675
|
|
698
|
|
Amortization of
intangible assets
|
1,491
|
|
1,434
|
|
Amortization of
acquisition-related inventory fair value step-up
|
8
|
|
—
|
|
Stock-based
compensation expense
|
306
|
|
295
|
|
Pretax investment
losses
|
182
|
|
271
|
|
Change in deferred
income taxes
|
(1,204)
|
|
(582)
|
|
Change in trade
accounts receivable, net
|
322
|
|
(389)
|
|
Change in
inventories
|
185
|
|
(448)
|
|
Change in trade
accounts payable
|
(149)
|
|
(18)
|
|
Change in prepaid
expenses and other assets
|
419
|
|
(73)
|
|
Change in accrued
expenses and other liabilities
|
34
|
|
97
|
|
Total operating cash
provided by continuing operations
|
6,490
|
|
7,613
|
|
Total operating cash
provided by discontinued operations
|
674
|
|
906
|
|
Net cash provided by
operating activities
|
7,164
|
|
8,519
|
|
Cash flows from
investing activities:
|
|
|
|
|
Cash paid for
acquisitions
|
(5,610)
|
|
(582)
|
|
Payments for additions
to property, plant and equipment
|
(1,383)
|
|
(1,118)
|
|
Proceeds from sales of
property, plant and equipment
|
12
|
|
9
|
|
Payments for purchases
of investments
|
(172)
|
|
(523)
|
|
Proceeds from sales of
investments
|
61
|
|
18
|
|
All other investing
activities
|
44
|
|
51
|
|
Total cash used in
investing activities from continuing operations
|
(7,048)
|
|
(2,145)
|
|
Total investing cash
used in discontinued operations
|
(33)
|
|
(89)
|
|
Net cash used in
investing activities
|
(7,081)
|
|
(2,234)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from the
issuance of common stock in connection with stock-based
compensation
|
68
|
|
31
|
|
Payment of
dividends
|
(821)
|
|
(818)
|
|
Net repayments of
borrowings (maturities of 90 days or less)
|
(1,006)
|
|
(723)
|
|
Repayments of
borrowings (maturities longer than 90 days)
|
(620)
|
|
(965)
|
|
Distribution from
discontinued operations
|
2,600
|
|
—
|
|
All other financing
activities
|
(67)
|
|
(95)
|
|
Net cash provided by
(used in) financing activities for continuing operations
|
154
|
|
(2,570)
|
|
Cash distributions to
Veralto Corporation, net
|
(427)
|
|
—
|
|
Net cash used in
financing activities
|
(273)
|
|
(2,570)
|
|
Effect of exchange rate
changes on cash and equivalents
|
59
|
|
(306)
|
|
Net change in cash and
equivalents
|
(131)
|
|
3,409
|
|
Beginning balance of
cash and equivalents
|
5,995
|
|
2,586
|
|
Ending balance of cash
and equivalents
|
$
5,864
|
|
$
5,995
|
|
This information is
presented for reference only. Final audited financial
statements will include footnotes, which should be referenced when
available, to more fully understand the contents of this
information.
|
|
DANAHER CORPORATION
AND SUBSIDIARIES
SEGMENT INFORMATION
(unaudited)
($ in
millions)
|
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
December 31,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Sales:
|
|
|
|
|
|
|
|
|
Biotechnology
|
$
1,759
|
|
$
2,223
|
|
$
7,172
|
|
$
8,758
|
|
Life
Sciences
|
1,930
|
|
1,946
|
|
7,141
|
|
7,036
|
|
Diagnostics
|
2,716
|
|
2,965
|
|
9,577
|
|
10,849
|
|
Total
Company
|
$
6,405
|
|
$
7,134
|
|
$
23,890
|
|
$
26,643
|
|
|
|
|
|
|
|
|
|
Operating
Profit:
|
|
|
|
|
|
|
|
|
Biotechnology
|
$
416
|
|
$
693
|
|
$
1,909
|
|
$
3,008
|
|
Life
Sciences
|
235
|
|
392
|
|
1,209
|
|
1,414
|
|
Diagnostics
|
766
|
|
989
|
|
2,406
|
|
3,436
|
|
Other
|
(80)
|
|
(77)
|
|
(322)
|
|
(322)
|
|
Total
Company
|
$
1,337
|
|
$
1,997
|
|
$
5,202
|
|
$
7,536
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margins:
|
|
|
|
|
|
|
|
|
Biotechnology
|
23.6 %
|
|
31.2 %
|
|
26.6 %
|
|
34.3 %
|
|
Life
Sciences
|
12.2 %
|
|
20.1 %
|
|
16.9 %
|
|
20.1 %
|
|
Diagnostics
|
28.2 %
|
|
33.4 %
|
|
25.1 %
|
|
31.7 %
|
|
Total
Company
|
20.9 %
|
|
28.0 %
|
|
21.8 %
|
|
28.3 %
|
|
This information is
presented for reference only. Final audited financial
statements will include footnotes, which should be referenced when
available, to more fully understand the contents of this
information.
|
View original
content:https://www.prnewswire.com/news-releases/danaher-reports-fourth-quarter-and-full-year-2023-results-302047285.html
SOURCE Danaher Corporation
