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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
[ X ] SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____to___Commission File
Number:1-8089
DANAHER CORP ORATION
(Exact name of registrant as specified in its charter)
Delaware 59-1995548
(State of incorporation) (I.R.S.Employer
Identification
number)
1250 24th Street, N.W., Suite 800
Washington, D.C. 20037
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code:
202-828-0850
Securities Registered Pursuant to Section 12(b) of the
Act:
Name of Exchanges
Title of each class on which registered
Common Stock $.01 par Value New York Stock
Exchange, Inc.
Pacific Stock
Exchange, Inc.
Securities registered pursuant to Section 12(g) of the
Act:
NONE
(Title of Class)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this
Form 10- K. [X]
As of March 20, 1995, the number of shares of common
stock outstanding was 58,438,288 and were held by
approximately 2,800 holders. The aggregate market
value of common shares held by non-affiliates of the
Registrant on such date was approximately $900 million,
based upon the closing price of the Company's common
shares as quoted on the New York Stock Exchange
composite tape on such date.
EXHIBIT INDEX APPEARS ON PAGE 8 DOCUMENTS INCORPORATED
BY REFERENCE
Part II and Part IV incorporate certain information by
reference from the registrant's Annual Report to
Shareholders for the year ended December 31, 1994.
With the exception of the pages of the Annual Report to
Shareholders specifically incorporated herein by
reference, the Annual Report to Shareholders is not
deemed to be filed as part of this Form 10-K.
Part III incorporates certain information by reference
from the registrant's proxy statement for its 1995
annual meeting of stockholders. With the exception of
the pages of the 1995 proxy statement specifically
incorporated herein by reference, the 1995 proxy
statement is not deemed to be filed as part of this
Form 10-K.
ITEM 1. BUSINESS
General
Danaher Corporation ("Danaher" or the "Company"),
originally DMG, Inc., was organized in 1969 as a
Massachusetts real estate investment trust. In 1978 it
was reorganized as a Florida corporation under the name
Diversified Mortgage Investors, Inc. ("DMI") which in a
second reorganization in 1980 became a subsidiary of a
newly created holding company named DMG, Inc. The
Company adopted the name Danaher in 1984 and was
reincorporated as a Delaware corporation following the
1986 annual meeting of shareholders.
The Company conducts its operations through three
business segments: Tools, Process/Environmental
Controls and Transportation Products.
Tools
The Tools segment is comprised of the Danaher Tool
Group (including Special Markets and Professional Tool
Division, which includes Armstrong Bros. Tool Co., a
premier manufacturer and marketer of industrial hand
tools), Matco Tools ("Matco"), Jacobs Chuck
Manufacturing Company ("Jacobs"), Iseli Company
("Iseli") and Delta Consolidated Industries, which was
acquired in November, 1994. This segment is one of the
largest domestic producers and distributors of general
purpose mechanics' hand tools and automotive specialty
tools. Other products manufactured by these companies
include drill chucks, custom designed headed tools and
components, high quality precision fasteners, tool
boxes and storage containers, and high quality
miniature precision parts.
The Company's Tools business strategy is focused
on increasing sales to existing customers, broadening
channels of distribution, developing new products and
achieving production efficiencies and enhanced quality
and customer service through "Just-In-Time" and related
manufacturing techniques.
Danaher Tool Group (DTG) is one of the largest
domestic producers of general purpose mechanics' hand
tools (primarily ratchets, sockets and wrenches) and
specialized automotive service tools for the
professional and "do-it-yourself" markets. DTG has
been the principal manufacturer of Sears, Roebuck and
Co.'s Craftsman line of mechanics' hand tools for over
50 years. Approximately 80% of the over 100 million
pieces sold to Sears annually are sold in tool sets
that include from three to 900 pieces. Net sales to
Sears were approximately 17% of total sales in 1994.
DTG's Special Markets Group sells to Sears under a
five year evergreen agreement, that requires Sears to
purchase a significant portion of its annual
requirements for its private-label Craftsman
mechanics' hand tool line from DTG.
For over 30 years, DTG has also been a primary
supplier of specialized automotive service tools to
NAPA, which has approximately 6,500 outlets at present.
In addition, DTG has been the designated supplier of
general purpose mechanics' hand tools to NAPA since
1983. DTG specialized automotive service tools are
also sold under the K-D Tools brand, its industrial
tools and products are also sold under the Armstrong
and Allen brand names, and fastener products under the
Holo-Krome name are sold to independent distributors
and other customers in the "do-it-yourself,"
professional automotive, commercial and industrial
markets.
Professional mechanics' tools are distributed by
Matco which has approximately 1,100 independent mobile
distributors who sell primarily to individual
professional mechanics. Matco is one of the leading
suppliers in this market.
Jacobs is the market leader in the drill chuck
business with its highly respected and well recognized
brand name and Iseli is a leader in the manufacture of
miniature precision parts produced on Swiss screw
machines.
Delta is the market leader in boxes and other
storage containers serving the vehicle aftermarket and
manufactures and markets containers serving numerous
specialty areas.
The major raw materials used by this segment,
including high quality steel, are available from a
variety of sources in sufficient quantities.
Process/Environmental Controls
The Process/Environmental Controls segment is
comprised of the Veeder-Root Company ("Veeder-Root"),
the Danaher Instruments Group (comprised of Danaher
Controls, Partlow Corporation, Gulton
Industries-Graphic Instruments, Eagle Signal
Instruments, LFE Instruments West Instruments, Ltd.,
and QualiTROL Corporation), Hengstler GmbH (which was
acquired in December, 1994) and the A.L. Hyde Company.
These companies produce and sell underground storage
tank leak detection systems and temperature, level and
position sensing devices, liquid flow measuring devices
and electronic and mechanical counting and controlling
devices. These products are distributed by the
Company's sales personnel and independent
representatives to original equipment manufacturers,
distributors and other end users.
The Company's strategy in the Process/
Environmental Controls segment is to concentrate on the
rapid expansion of its environmental controls product
line, including the Veeder-Root TM storage tank leak
detection systems business. The Company believes that
Veeder-Root is the premier manufacturer of
state-of-the-art tank measuring and leak detection
systems for underground fuel storage tanks and,
accordingly, is uniquely positioned to respond to the
increased demand for these products fueled by
environmental regulations.
Veeder-Root is also the predominant worldwide
supplier of mechanical gasoline pump computing devices
and a manufacturer of other measuring and counting
devices.
Other business lines within this segment include
extruded thermoplastic mill shapes and custom molded
plastic products.
The raw materials utilized by companies in this
segment are stock items, principally metals and
plastic, electrical and electronic components. These
materials are readily available from a number of
sources in sufficient quantities.Transportation
The Transportation segment includes Hennessy
Industries, Inc. ("Hennessy"), Jacobs Brake and Fayette
Tubular Products ("Fayette"). These companies are
leading manufacturers and distributors of automotive
and transportation products used by the automotive
aftermarket and original equipment manufacturers.
Products in this segment include wheel service
equipment, diesel engine retarders and automobile air
conditioning components.
The results of the Transportation Products
business are affected by the level of sales in the
automotive aftermarket, heavy duty diesel truck and
domestic automobile industries. The Company's strategy
is to reduce the impact of the cyclicality in this
business segment by expanding its customer base for the
wheel service equipment products and "Jake Brake" and
achieving production efficiencies and enhanced quality
and customer service through "Just-In-Time" and related
manufacturing techniques.
Wheel service equipment is manufactured under the
Coats, Bada and Ammco brand names. Products include
tire changers, wheel balancers, wheel weights and brake
service equipment. Wheel service equipment is sold
primarily to wholesale distributors and national
accounts. These markets are served by the Company's
sales personnel.
Diesel engine retarders are manufactured at
Jacobs. The "Jake Brake" technology was developed by
Jacobs and represents the premier brand of engine
retarders. The product is sold by Jacobs' sales
personnel to original equipment manufacturers and
aftermarket distributors.
Automotive air-conditioning components and other
tubular products are produced by Fayette which sells
its products to original equipment manufacturers
through its direct sales force. The major raw
materials used by this segment include high quality
steel forgings and castings, aluminum and steel tubing,
rubber hose, metal couplings, paints, adhesives and
chemical coatings. These materials are available in
sufficient quantities from a variety of sources.
Patents, Licenses, etc.
The Company has patents of its own and has
acquired licenses under patents of others. The Company
does not consider that its business, as a whole, is
dependent on any single patent, group of patents,
trademark or franchise. The Company does, however,
offer many patented products and is periodically
engaged in litigation concerning patents and licenses.
Seasonal Nature of Business
As a whole, the Company's businesses are not
subject to material seasonal fluctuations.
Backlog
The Company's products are manufactured primarily
in advance of order and either shipped or assembled
from stock. Backlogs are not significant as sales are
often dependent on orders requiring immediate shipment
from inventory.
Employee Relations
At December 31, 1994, the Company employed
approximately 9,960 persons. Of these, approximately
1,800 were hourly-rated unionized employees. The
Company considers its labor relations to be good.
Research and Development
The Company's research and development
expenditures were $26,800,000 for 1994, $24,000,000 for
1993 and $19,300,000 for 1992.
Environmental and Safety Regulations
Certain of the Company's operations are subject to
federal, state and local environmental laws and
regulations which impose limitations on the discharge
of pollutants into the air and water and establish
standards for treatment, storage and disposal of solid
and hazardous wastes. The Company believes that it is
in substantial compliance with applicable environmental
laws and regulations.
In addition to environmental compliance costs, the
Company may incur costs related to alleged
environmental damage associated with past or current
waste disposal practices or other hazardous materials
handling practices. For example, generators of
hazardous substances found in disposal sites at which
environmental problems are alleged to exist, as well as
the owners of those sites and certain other classes of
persons, are subject to claims brought by state and
federal regulatory agencies pursuant to statutory
authority. The Company believes that its liability, if
any, for past or current waste handling practices will
not have a material adverse effect on its financial
condition.
The Company must also comply with various federal,
state and local safety regulations in connection with
its operations. The Company's compliance with these
regulations has had no material adverse effect on its
financial condition.
Major Customers
The Company has a customer in the tools segment,
Sears, Roebuck and Co. ("Sears"), which accounted for
17% of consolidated sales in 1994. Although the
relationship with Sears is long-standing, the Company
believes the loss of this business could have an
adverse effect on its operations.
ITEM 2. PROPERTIES
The Company occupies over 4 million square feet of
manufacturing, distribution, service and office space
at various domestic and foreign locations. The
principal properties are listed below and are
constructed of concrete, brick and cement, cinderblock
or some combination of these materials. The Company
believes that its plants have adequate productive
capacity and are suitably used for the manufacture of
its products and that its warehouses, distribution
centers and sales offices are suitably located and
utilized for the marketing of its products and
services.
Location Principal Use Owned/Leased Approx.
Sq.Ft of
Floor Area
Tools
Springdale, AK Manufacturing Owned 207,000
Springfield,MA Manufacturing Owned 276,000
Gastonia, NC Manufacturing Leased 225,000
Fayetteville,AK
(2) Manufacturing Owned 134,000
Baltimore, MD Distribution Leased 167,000
Brampton,
Ontario Distribution Leased 14,000
Chicago, IL Manufacturing Owned 216,000
Lakewood, NY Manufacturing Owned 112,000
Nashville, TN Distribution Owned 132,000
Stow, OH Distribution Owned 50,000
West Hartford,
CT Manufacturing Owned 234,000
Terryville, CT Manufacturing Owned 120,000
Walworth, WI Manufacturing Owned 85,000
Dundee,
Scotland Manufacturing Owned 114,000
Sheffield,
England Manufacturing Owned 146,000
Clemson, SC Manufacturing Owned 74,000
Jonesboro, AK Manufacturing Owned 77,000
Jonesboro, AK Manufacturing Leased 315,000
Raleigh, NC Manufacturing Leased 215,000
Process/
Environmental
Controls
Altoona, PA Manufacturing Owned 146,000
Elizabethtown,
NC Manufacturing Owned 182,000
Marketharborough,
England Manufacturing Leased 10,000
Sao Paulo,
Brazil Manufacturing Owned 52,000
New Hartford
& Fairport, NY Manufacturing Owned 121,000
Gurnee, Il Manufacturing Leased 36,000
Grenloch, NJ Manufacturing Owned 93,000
Providence, RI Manufacturing Owned 58,000
Brighton,
England Manufacturing Leased 26,000
Chesterland,
OH Manufacturing Owned 44,000
Aldingen,
Germany Manufacturing Owned 216,000
Aldingen,
Germany (2) Manufacturing Leased 85,000
Wehingen,
Germany (2) Manufacturing Leased 48,000
Eatontown, NJ Distribution Leased 22,700
Aulmay-sons-Bois,
France Manufacturing Owned 41,000
Broxbounrem,
England Distribution Leased 25,000
Transportation
Fayette, OH Manufacturing Owned 200,000
Reading, MI Manufacturing Owned 73,000
Livingston, TN Manufacturing Owned 60,000
Bloomfield, CT Manufacturing Owned 283,000
LaVergne, TN Manufacturing Owned 172,000
Bowling Green,
KY Manufacturing Owned 103,000
In addition to the facilities listed, the Company
owns or leases various facilities including offices or
properties in Washington, District of Columbia;
Simsbury, Connecticut; Troy, Michigan; as well as
facilities in Uppermill, Livingston, Gloucester and
Richmond, Great Britain; Melbourne and Sydney,
Australia; Nagoya, Osaka and Tokyo, Japan; Toronto,
Canada; Paris, Bron, Toulouse, Bordeaux, Tours and
Selestat, France; and Stuttgart, Germany.
ITEM 3. LEGAL PROCEEDINGS
A former subsidiary of the Company is engaged in
litigation in six states with respect to product
liability. The Company sold the subsidiary in 1987.
Under the terms of the sale agreement, the Company
agreed to indemnify the buyer of the subsidiary for
product liability related to tools manufactured by the
subsidiary prior to June 4, 1987. The cases involve
approximately 3,000 plaintiffs, in state and federal
courts in six states. All other major U.S. air tool
manufacturers are also defendants. The gravamen of
these complaints is that the defendants' air tools,
when used in different types of manufacturing
environments over extended periods of time, were
defective in design and caused various physical
injuries. The plaintiffs seek compensatory and
punitive damages. The cases are in preliminary stages
of discovery and pleading and the Company intends to
defend its position vigorously. The Company's maximum
indemnification obligation under the contract is
approximately $85,000,000. The Company believes it has
insurance coverage for all or a substantial part of the
damages, if any. The outcome of this litigation is not
currently predictable.
In addition to the litigation noted above, the
Company and its subsidiaries are from time to time
subject to ordinary routine litigation incidental to
their business. The Company believes that the results
of the above noted litigation and other pending legal
proceedings would not have a materially adverse effect
on the Company's financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDER
No matters were submitted to a vote of security
holders during the fourth quarter of 1994.
PART II
ITEMS 5 THROUGH 8.
The information required under Items 5 through 8
is included in the Registrant's Annual Report to its
Shareholders for the year ended December 31, 1994, and
is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
NONE
PART III
ITEMS 10 THROUGH 13.
The information required under Items 10 through 13
is included in the Registrant's Proxy Statement for its
1995 annual meeting, and is incorporated herein by
reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
a) Document List
1. Financial Statements
Response to this portion of Item 14 is
submitted per the Index to Financial Statement
Schedules on page 8 of this report.
2. Supplementary Data and Financial Statement
Schedules Response to this portion of Item 14 is
submitted per the Index to Financial Statement
Schedules on page 8 of this report.
3. An Index of Exhibits is on page 9 of this
report.
b) Reports on Form 8-K filed in the fourth
quarter of 1994.
NONE
DANAHER CORPORATION
INDEX TO FINANCIAL STATEMENTS, SUPPLEMENTARY DATA AND
FINANCIAL STATEMENT SCHEDULES
Page Number in Annual Report
Annual Report
Form 10K To
Share-
holders
Report of Independent Public
Accountants on Schedules: 11
Financial Statements:
Consolidated Statements of
Earnings, year ended December 31,
1994, 1993, and 1992. . . . . . 14
Consolidated Balance Sheets,
December 31, 1994 and 1993.. 15
Consolidated Statements of
Cash Flows, years ended
December 31, 1994, 1993, and 1992. 16
Consolidated Statements of
Stockholders' Equity, years
ended December 31, 1994,
1993, and 1992. . . . . . . . 17
Notes to Consolidated
Financial Statements. . . . . . 18
Supplemental Data:
Selected Financial Data. . . . . . . 10
Market Prices of Common Stock. . . . . 26
Schedules:
II - Valuation and Qualifying Accounts. 12
Schedules other than those listed above have been
omitted from this Annual Report because they are not
required, are not applicable or the required
information is included in the financial state-ments or
the notes thereto.
Exhibits
(3) Articles of Incorporation and By-Laws.
(a) The Articles of Incorporation of Danaher (filed as
Annex B to Danaher's Proxy Statement dated October 7,
1986).
Incorporated By Reference
(b) The By-Laws of Danaher.
Incorporated By Reference
(10) Material Contracts:
(a) Employment Agreement between Danaher Corporation
and
George M. Sherman dated as of January 2, 1990
Incorporated By Reference
(b) Credit Agreement Dated As of September 7, 1990.
Among
Danaher Corporation, the Financial Institutions
Listed Therein and Bankers Trust Company as
Agent.
Incorporated By Reference
(c) Agreement as of November 1, 1990 between Danaher
Corporation, Easco Hand Tools, Inc. and Sears,
Roebuck and
Co.
Incorporated By Reference
(d) Note Agreement as of November 1, 1992 Between
Danaher
Corporation and Lenders Referenced Therein.
Incorporated By Reference
(e) Note Agreement as of April 1, 1993 Between Danaher
Corporation and Lenders Referenced Therein.
Incorporated By Reference
(13) Annual Report to Securityholders
(22) Subsidiaries of Registrant.
(24) Consent of Independent Public Accountants.
SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly
authorized.
DANAHER CORPORATION
By: /s/ GEORGE M.SHERMAN
George M. Sherman
President and Chief
Executive Officer
Date: March 20, 1995
/s/ GEORGE M. SHERMAN President and Chief
George M. Sherman Executive Officer
/s/ STEVEN M. RALES Chairman of the
Steven M. Rales Board
/s/ MITCHELL P. RALES Chairman of the
Mitchell P. Rales Executive Committee
/s/ WALTER G. LOHR, JR. Director
Walter G. Lohr, Jr.
/s/ DONALD J. EHRILCH Director
Donald J. Ehrlich
/s/ MORTIMER M. CAPLIN Director
Mortimer M. Caplin
/s/ A. EMMET STEPHENSON, JR. Director
A. Emmet Stephenson, Jr.
/s/PATRICK W. ALLENDER Senior Vice
Patrick W. Allender President-Chief
Financial Officer
and Secretary
/s/ C. SCOTT BRANNAN Vice President and
C. Scott Brannan Controller
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON THE FINANCIAL STATEMENT SCHEDULES
To Danaher Corporation:
We have audited in accordance with generally accepted
auditing standards, the financial statements included
in Danaher Corporation and Subsidiaries' Annual Report
to Shareholders incorporated by reference in this Form
10-K, and have issued our report thereon dated January
25, 1995. Our audit was made for the purpose of
forming an opinion on those statements taken as a
whole. The schedules listed in the index are the
responsibility of the Company's management and are
presented for the purpose of complying with the
Securities and Exchange Commission's rules and are not
part of the basic financial statements. These
schedules have been subjected to the auditing
procedures applied in the audit of the basic financial
statements and, in our opinion, fairly state in all
material respects the financial data required to be set
forth therein in relation to the financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Washington, D.C.
January 25, 1995
EXHIBIT 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to
the incorporation of our reports included (or
incorporated by reference) in this Form 10-K, into the
Company's previously filed Registration Statement File
No. 33-32402.
ARTHUR ANDERSEN LLP
Washington, D.C.
March 20, 1995
DANAHER CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(000's omitted)
Additions
Classification
Balance
at
Begin-
ning of
Period
Charged
to
Costs
&
Expense
s
Charg
ed
to
other
Accou
nts
Write
Offs
Write
downs
&
deduct
ions
Balanc
e
at
End
of
Period
Year Ended December 31,
1994
Allowances deducted from
asset accounts:
Allowance for doubtful
accounts. . . . . .
$8,043
$6,630
$487
a
$3,522
$11,63
8
Year Ended December 31,
1993
Allowances deducted from
asset accounts:
Allowance for doubtful
accounts. . . . . .
$6,350
$4,188
$ -
$2,495
$8,043
Year Ended December 31,
1992
Allowances deducted from
asset accounts:
Allowance for doubtful
accounts. . . . . .
$5,613
$2,360
$ -
$1,623
$6,350
Note (a) - Amounts related to businesses acquired.