Danaher 2009 Annual Report Download - page 25

Table of Contents
In addition, some of our businesses purchase certain requirements from sole or limited source suppliers for reasons of quality assurance, cost effectiveness or
availability. If these or other suppliers encounter financial, operating or other difficulties or if our relationship with them changes, we could face manufacturing
or sourcing interruptions, delays and inefficiencies.
If we cannot adjust our manufacturing capacity to reflect the demand for our products, our income and results of operations may suffer.
Because we cannot always immediately adapt our production capacity and related cost structures to changing market conditions, our manufacturing capacity
may at times exceed or fall short of our production requirements. Any or all of these problems could result in the loss of customers, provide an opportunity for
competing products to gain market acceptance and otherwise adversely affect our business and financial results.
Changes in governmental regulations and funding may reduce demand for our products or increase our expenses.
We compete in markets in which we or our customers must comply with federal, state, local and foreign regulations, such as health and safety, environmental
and food and drug regulations and regulations governing communications. We develop, configure and market our products to meet customer needs created by
these regulations. These regulations are complex, change frequently and have tended to become more stringent over time. Any significant change in any of these
regulations could reduce demand for our products or increase our costs of producing these products. In addition, in certain of our markets our growth depends
in part upon the introduction of new regulations. In these markets, the failure of governmental and other entities to adopt new regulations, or the adoption of
new regulations which our products and services are not positioned to address, could adversely affect our growth rate.
We may be unable to adjust to changes in the healthcare industry, some of which could adversely affect our business.
The healthcare industry has undergone, and is in the process of undergoing, significant changes in an effort to reduce costs. These changes include legislative
healthcare reform, wider implementation of managed care, consolidation among healthcare providers, increased competition and declining reimbursement rates.
Some of these potential changes may cause healthcare-industry participants to purchase fewer of our products and services, reduce the prices they are willing
to pay for our products or services, reduce the amounts of reimbursement available for our products from governmental agencies or third-party payors, reduce
the volume of medical procedures or impose excise taxes on medical device companies. These changes could adversely affect our revenues and profitability.
Work stoppages, union and works council campaigns, labor disputes and other matters associated with our labor force could adversely impact our
results of operations and cause us to incur incremental costs.
We have a number of U.S. collective bargaining units and various non-U.S. collective labor arrangements. We are subject to potential work stoppages, union
and works council campaigns and potential labor disputes, any of which could adversely impact our productivity and results of operations.
Adverse changes in our relationships with, or the financial condition, performance or purchasing patterns of, key distributors, resellers and
other channel partners could adversely affect our results of operations.
Certain of our businesses sell a significant amount of their products to key distributors, resellers and other channel partners that have valuable relationships
with customers and end-users. Some of these distributors and other partners also sell our competitors’ products, and if they favor our competitors’ products
for any reason they may fail to market our products effectively. Adverse changes in our relationships with these distributors and other partners, or adverse
developments in their financial condition, performance or purchasing patterns, could adversely affect our results of operations and cash flows Changes in the
levels of inventory maintained by our distributors and other channel partners can also significantly impact our results of operations in any given period. In
addition, the consolidation of distributors in certain of our served industries, as well as the formation of large and sophisticated purchasing groups in
industries such as healthcare, could adversely impact our profitability.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2010 Powered by Morningstar® Document Research℠
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