8-K
DANAHER CORP /DE/ (DHR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K
__________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 13, 2021
__________________
| DANAHER CORPORATION | |
|---|---|
| (Exact Name of Registrant as Specified in Its Charter) |
__________________
| Delaware | 001-08089 | 59-1995548 | |
|---|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
| 2200 Pennsylvania Avenue, NW | 20037-1701 | ||
| Suite 800W | |||
| Washington, | DC | ||
| (Address of Principal Executive Offices) | (Zip Code) |
202-828-0850
(Registrant’s Telephone Number, Including Area Code)
| Not applicable |
|---|
| (Former Name or Former Address, if Changed Since Last Report) |
__________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, $0.01 par value | DHR | New York Stock Exchange |
| 4.75% Mandatory Convertible Preferred Stock, Series A, without par value | DHR.PRA | New York Stock Exchange |
| 5.00% Mandatory Convertible Preferred Stock, Series B, without par value | DHR.PRB | New York Stock Exchange |
| Floating Rate Senior Notes due 2022 | DHR/22A | New York Stock Exchange |
| 1.700% Senior Notes due 2024 | DHR 24 | New York Stock Exchange |
| 2.500% Senior Notes due 2025 | DHR/25 | New York Stock Exchange |
| 0.200% Senior Notes due 2026 | DHR/26 | New York Stock Exchange |
| 2.100% Senior Notes due 2026 | DHR 26 | New York Stock Exchange |
| 1.200% Senior Notes due 2027 | DHR/27 | New York Stock Exchange |
| 0.450% Senior Notes due 2028 | DHR/28 | New York Stock Exchange |
| 2.500% Senior Notes due 2030 | DHR 30 | New York Stock Exchange |
| 0.750% Senior Notes due 2031 | DHR/31 | New York Stock Exchange |
| 1.350% Senior Notes due 2039 | DHR/39 | New York Stock Exchange |
| 1.800% Senior Notes due 2049 | DHR/49 | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
| Emerging growth company | ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
|---|
On January 13, 2021, in advance of a public webcast presentation at the J.P. Morgan Healthcare Conference on the same date, Danaher Corporation issued a press release regarding the Company’s anticipated financial performance for the fourth quarter of 2020 and furnished pursuant to Item 2.02 of Form 8-K such press release as well as the presentation slides attached hereto, each of which is incorporated by reference herein. The presentation slides attached hereto contain certain information regarding Danaher’s anticipated financial performance for 2020.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS | |
|---|---|---|
| (c) | Exhibits: | |
| Exhibit No. | Description | |
| 99.1 | Press release — “Danaher CEO to Comment on Financial Performance” | |
| 99.1PRE | Selected Danaher Presentation Slides for J.P. Morgan Healthcare Conference on January 13, 2021 | |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DANAHER CORPORATION | |||
|---|---|---|---|
| Date: | January 13, 2021 | By: | /s/ Matthew R. McGrew |
| Matthew R. McGrew | |||
| Executive Vice President and Chief Financial Officer |
jpmpresoslidesfinalv2
2 Forward Looking Statements Statements in this presentation that are not strictly historical, including any statements regarding Danaher’s anticipated financial performance for the fourth quarter 2020 or any other period, and any other statements regarding events or developments that we 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, the highly uncertain and unpredictable severity, magnitude and duration of the COVID-19 pandemic (and the related governmental, business and community responses thereto) on our business, results of operations and financial condition, Danaher's ability to successfully integrate the operations and employees of the Biopharma business Danaher acquired from General Electric Company (now known as Cytiva) with Danaher's existing business, the ability to realize anticipated financial, tax and operational synergies and benefits from such acquisition, Cytiva's performance and maintenance of important business relationships, the impact of our debt obligations (including the debt incurred to finance the acquisition of Cytiva) on our operations and liquidity, deterioration of or instability in the economy, the markets we serve and the financial markets (including as a result of the COVID-19 pandemic), developments and uncertainties in U.S. policy stemming from the U.S. administration, such as changes in U.S. trade and tariff policies and the reaction of other countries thereto, 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 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 and achieve the anticipated benefits of such acquisitions, contingent liabilities relating to acquisitions, investments 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 to use, disclose and license certain intellectual property we license if we fail to commercialize it, risks relating to product, service or software defects, product liability and recalls, risks relating to product manufacturing, our relationships with and the performance of our channel partners, uncertainties relating to collaboration arrangements with third-parties, commodity costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole sources of supply, the impact of deregulation on demand for our products and services, labor matters, international economic, political, legal, compliance and business factors (including the impact of the United Kingdom's separation from the EU and uncertainty relating to the terms of such separation), disruptions relating to man-made and natural disasters (including pandemics such as COVID-19) and pension plan costs. 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 2019 Annual Report on Form 10-K and our first, second and third quarter 2020 Quarterly Reports on Form 10-Q. These forward-looking statements speak only as of the date of this presentation 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. With respect to the non-GAAP financial measures referenced in the following presentation, definitions and the accompanying information required by SEC Regulation G can be found in this presentation or in the “Investors” section of Danaher’s web site, www.danaher.com. All references in this presentation (1) to financial metrics relate only to the continuing operations of Danaher’s business, unless otherwise noted; (2) to “growth” or other period-to-period changes refer to year-over-year comparisons unless otherwise indicated; and (3) to operating profit below the segment level exclude amortization. We may also describe certain products and devices which have applications submitted and pending for certain regulatory approvals.
3 Non-GAAP Reconciliations Estimated Core Sales Growth, Core Sales Growth Including Cytiva and Base Business Core Sales Growth % Change Three-Month Period Ended December 31, 2020 vs. Comparable 2019 Period % Change Year Ended December 31, 2020 vs. Comparable 2019 Period Total sales growth (GAAP) ~38.5% ~24.0% Impact of: Acquisitions/divestitures ~(24.5%) ~(17.5%) Currency exchange rates ~(2.5%) - Core sales growth (non-GAAP) ~11.5% ~6.5% Impact of Cytiva sales growth (net of divested product lines) ~3.5% ~3.0% Core sales growth including Cytiva (non-GAAP) ~15.0% ~9.5% Impact of COVID-related tailwinds ~(11.0%) to (12.0%) Base business core sales growth (non-GAAP) + LSD/MSD Estimated Full Year 2020 Cytiva Sales ($ in billions) 2020 Cytiva Sales under DHR ownership - April to December 2020 (GAAP) ~$3.2 2020 Cytiva Sales under GE ownership - January to March 2020 (non-GAAP) ~0.8 Full Year 2020 Cytiva Sales (non-GAAP) ~$4.0 Statement Regarding Non-GAAP Measures The non-GAAP measures set forth in this presentation 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 to identify underlying growth trends in our business and compare our sales performance with prior and future periods and to our peers. In addition to presenting core sales, we also present core sales on a basis that includes sales attributable to Cytiva (formerly the Biopharma Business of General Electric Company’s (“GE”) Life Sciences business), which Danaher acquired from GE on March 31, 2020. Historically Danaher has calculated core sales solely on a basis that excludes sales from acquired businesses recorded prior to the first anniversary of the acquisition. However, given Cytiva’s significant size and historical core sales growth rate, in each case compared to Danaher’s existing businesses, management believes it is appropriate to also present core sales on a basis that includes Cytiva sales. Management believes this presentation provides useful information to investors by demonstrating the impact Cytiva has on the Company’s current growth profile, rather than waiting to demonstrate such impact 12 months after the acquisition when Cytiva would normally have been included in Danaher’s core sales calculation. Danaher calculates period-to-period core sales growth including Cytiva by adding to the baseline period sales Cytiva’s historical sales from such period (when it was owned by GE), net of the sales of the divested product lines and also adding the Cytiva sales to the current period. We also present (1) Cytiva’s full year 2020 sales (including the portion of 2020 when Cytiva was owned by GE) to provide investors with insight into Cytiva’s future, annual sales potential as a part of Danaher, and (2) “base business” core revenue growth to demonstrate our core revenue growth including Cytiva excluding the impact of core sales growth directly attributable to COVID-19 and its impact. Management uses core revenue growth to measure the Company’s operating and financial performance and in the Company’s executive compensation program. With respect to core sales, core sales including Cytiva and “base business” core revenue growth, (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 (other than Cytiva, in the case of core sales including Cytiva) 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.
Current Update 5 Strong finish to 2020 Q4 RESULTS BETTER THAN OUR EXPECTATIONS Q4 ESTIMATED CORE REVENUE GROWTH INCL. CYTIVA UP ~15% — Led by Life Sciences and Diagnostics; EAS up slightly — COVID-related tailwinds contributed ~1,100-1,200bps to core growth — “Base” business +LSD/MSD (despite 3 fewer selling days y/y) STRONG EARNINGS AND CASH FLOW PERFORMANCE — Fall-through better than expected “COVID-related tailwinds” refers to revenue from the sale of products & services directly addressing COVID-19 or the impact thereof (particularly at our businesses providing solutions for diagnostic testing and supporting vaccine & therapeutic production). “Base” business refers to revenue from the sale of products & services not directly addressing COVID-19 or the impact thereof.
Danaher Today Purpose-driven science & technology leader ~$22B 2020E DANAHER TOTAL REVENUE 6 LIFE SCIENCES $10.6B DIAGNOSTICS $7.4B ENV. & APPLIED $4.3B All financial metrics reflect estimated FY 2020E results from continuing operations Pie chart is a % of total revenue and includes Cytiva 2020E total annual revenue REVENUE BY END-MARKET: Biopharma ~25% Molecular Dx ~10% Other Dx ~25% Applied ~20% Ind. Other Research / Acad.
Building a stronger, better Danaher 2015 2018 2020E TOTAL REVENUE ~$21B ~$20B ~$22B CORE REVENUE GROWTH +LSD +MSD +HSD* RECURRING REVENUE ~45% ~70% ~75% ADJUSTED GROSS MARGIN 53% 56% ~58%** OPERATING CASH FLOW $3.8B $4.0B ~$6.0B KEY PORTFOLIO MOVES 7 2015 metrics shown include Fortive and Envista; 2018 metrics shown include Envista. Recurring Revenue is shown as a % of total revenue. * 2020E core revenue growth includes Cytiva. ** Reflects the 9-month period ended Oct. 2, 2020. Portfolio Has Evolved Meaningfully
GE Biopharma Acquisition (Cytiva) 8 Transformational addition to our Life Sciences platform GLOBAL LEADER IN FAST-GROWING, HIGHLY- ATTRACTIVE BIOPROCESSING MARKET • Closed the transaction March 2020 • Talented & innovative team with industry-leading expertise • Transition update: ― Re-branding to new Cytiva name ― Standing-up the business as a new DHR OpCo ― DBS introduction & training ~$4B CYTIVA 2020E TOTAL ANNUAL REVENUE >50% DHR LIFE SCIENCES PLATFORM BIOPROCESSING REVENUE +HSD ANTICIPATED LONG-TERM CORE REVENUE GROWTH RATE ~25% 2018 2020E <10% 2015 As a % of total revenue
Bioprocessing: Where We Play & How We Win 9 Filtration Skids & Consumables Concentration & Sterile Filtration Media Bioreactor Depth Filter Chromatography Columns Polishing Column Devices Bags & Mixers Helping customers bring more life-saving drugs to market faster Cell culture & SUT Chromatography Filtration ~$5.5B DHR BIOPROCESSING REVENUE 2020E Resins FOCUSED ON AREAS OF HIGHEST IMPACT & MAXIMUM VALUE TO CUSTOMERS: Facility efficiency Manufacturing flexibility Development partnership Speed to market LEADING PLAYER WITH BROADEST OFFERING ACROSS ENTIRE WORKFLOW Processing time Operating costs Footprint Capital spending
Molecular Diagnostics: Where We Play & How We Win 10 HOW WE WIN • Largest global installed base: ~30,000 instruments • Broadest test menu: >35 OUS, >20 in the US • Workflow + speed + accuracy Unique & leading position in critical point-of-care environments Cepheid GeneXpert® Systems & test cartridge BEST-IN-CLASS MOLECULAR DX • Unique position at critical, point-of-care settings • Simplified workflow: “sample in, result out” • Scalable, random-access systems 2016 (At Acq.) 2019 2020E ANNUAL REVENUE & TOTAL INSTALLED BASE ~$0.6B ~$1B ~$2B >10K ~30K >20K
Document
Exhibit 99.1
DANAHER CEO TO COMMENT ON FINANCIAL PERFORMANCE
Washington, D.C., January 13, 2021 - Danaher Corporation (NYSE: DHR) (the “Company”) announced that its President and Chief Executive Officer, Rainer M. Blair, will comment today on the Company’s fourth quarter 2020 performance in a presentation at the J.P. Morgan Healthcare Conference at 10:50 a.m. ET.
Mr. Blair will communicate that fourth quarter 2020 core revenue growth including Cytiva is expected to be above the Company’s previously announced guidance, driven primarily by better performance in its Life Sciences and Diagnostics segments.
For the fourth quarter 2020, estimated revenues increased approximately 38.5% year-over-year, with approximately 15.0% estimated non-GAAP core revenue growth including Cytiva.
As previously announced, Danaher will hold its quarterly earnings conference call for the fourth quarter and year-end 2020 on Thursday, January 28, 2021 at 8:00 a.m. ET.
ABOUT DANAHER
Danaher is a global science and technology innovator committed to helping its customers solve complex challenges and improving quality of life around the world. Its family of world class brands has leadership positions in the demanding and attractive health care, environmental and applied end-markets. With more than 20 operating companies, Danaher’s globally diverse team of more than 67,000 associates is united by a common culture and operating system, the Danaher Business System, and its Shared Purpose, Helping Realize Life’s Potential. For more information, please visit www.danaher.com.
FORWARD LOOKING STATEMENTS
Statements in this release that are not strictly historical, including the statements regarding the Company's anticipated financial performance for the fourth quarter of 2020 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, the highly uncertain and unpredictable severity, magnitude and duration of the COVID-19 pandemic (and the related governmental, business and community responses thereto) on our business, results of operations and financial condition, Danaher's ability to successfully integrate the operations and employees of the Biopharma business Danaher acquired from General Electric Company (now known as Cytiva) with Danaher's existing business, the ability to realize anticipated financial, tax and operational synergies and benefits from such acquisition, Cytiva's performance and maintenance of important business relationships, the impact of our debt obligations (including the debt incurred to finance the acquisition of Cytiva) on our operations and liquidity, deterioration of or instability in the economy, the markets we serve and the financial markets (including as a result of the COVID-19 pandemic), developments and uncertainties in U.S. policy stemming from the U.S. administration, such as changes in U.S. trade and tariff policies and the reaction of other countries thereto, 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 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 and achieve the anticipated benefits of such acquisitions, contingent liabilities relating to acquisitions, investments 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 to use, disclose and license certain intellectual property we license if we fail to commercialize it, risks relating to product, service or software defects, product liability and recalls, risks relating to product manufacturing, our relationships with and the performance of our channel partners, uncertainties relating to collaboration arrangements with third-parties, commodity
costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole sources of supply, the impact of deregulation on demand for our products and services, labor matters, international economic, political, legal, compliance and business factors (including the impact of the United Kingdom's separation from the EU and remaining uncertainty relating to the terms of such separation), disruptions relating to man-made and natural disasters (including pandemics such as COVID-19) and pension plan costs. 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 2019 Annual Report on Form 10-K and our first, second and third quarter 2020 Quarterly Reports on Form 10-Q. 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.
CONTACT
Matthew E. Gugino
Vice President, Investor Relations
Danaher Corporation
2200 Pennsylvania Avenue, N.W., Suite 800W
Washington, D.C. 20037
Telephone: (202) 828-0850 Fax:
(202) 828-0860
DANAHER CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Estimated Core Sales Growth and Core Sales Growth Including Cytiva
| % Change Three-Month Period Ended December 31, 2020 vs. Comparable 2019 Period | |
|---|---|
| Total sales growth (GAAP) | ~38.5% |
| Impact of: | |
| Acquisitions/divestitures | ~(24.5%) |
| Currency exchange rates | ~(2.5%) |
| Core sales growth (non-GAAP) | ~11.5% |
| Impact of Cytiva sales growth (net of divested product lines) | ~3.5% |
| Core sales growth including Cytiva (non-GAAP) | ~15.0% |
Statement Regarding Non-GAAP Measures
We present core sales on a basis that includes sales attributable to Cytiva (formerly the Biopharma Business of General Electric Company’s (“GE”) Life Sciences business), which Danaher acquired from GE on March 31, 2020. Core revenue growth including Cytiva should be considered in addition to, and not as a replacement for or superior to, GAAP revenue growth, and may not be comparable to similar measures reported by other companies. Management believes that this measure provides useful information to investors by offering an additional way of viewing Danaher’s results that, when reconciled to GAAP revenue growth, helps our investors to identify underlying growth trends in our business and compare our sales performance with prior and future periods and to our peers. Historically Danaher has calculated core sales solely on a basis that excludes sales from acquired businesses recorded prior to the first anniversary of the acquisition. However, given Cytiva’s significant size and historical core sales growth rate, in each case compared to Danaher’s existing businesses, management believes it is appropriate to also present core sales on a basis that includes Cytiva sales. Management believes this presentation provides useful information to investors by demonstrating the impact Cytiva has on the Company’s current growth profile, rather than waiting to demonstrate such impact 12 months after the acquisition when Cytiva would normally have been included in Danaher’s core sales calculation. Danaher calculates period-to-period core sales growth including Cytiva by adding to the baseline period sales Cytiva’s historical sales from such period (when it was owned by GE), net of the sales of the divested product lines and also adding the Cytiva sales to the current period.
With respect to core sales including Cytiva, (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 (other than Cytiva) 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.
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