Danaher 2009 Annual Report Download - page 38

Table of Contents
cardiac marking instrument also contributed to the year-over-year growth and are expected to further benefit sales in 2010. Sales grew at a double-digit rate in
China and the emerging economies of Latin America during 2009, while combined Europe and North America sales were flat.
Sales in the segment’s existing life science instrumentation and pathology diagnostics businesses declined at a low-single digit rate during 2009 as compared to
2008. Sales growth attributable to pathology diagnostic instrumentation and associated consumable products, primarily outside of North America, was more
than offset by sales declines attributable to lower demand for compound and stereo microscopy equipment primarily in Europe and North America. Lower
demand for microscopy equipment resulted largely from lower capital spending in the Company’s customer base throughout 2009. While year-over-year sales
in the life sciences instrumentation business declined in each quarter during 2009, the rate of year-over-year decline during the fourth quarter of 2009
improved compared to the first three quarters of the year as economic stimulus funding, primarily in Japan, began to favorably impact the business. North
American stimulus funding did not significantly benefit the business in 2009, but is expected to positively impact the Company’s results in 2010.
Sales in the segment’s existing dental businesses declined at a high-single digit rate during 2009 as compared to 2008. Sales in the dental consumables
business during 2009 were essentially flat as compared to 2008. Increased sales of orthodontia and infection control products during 2009 were offset by
weaker demand for implants, endodontic products and general dentistry consumables. Lower capital spending by customers and inventory reductions in
certain distribution channels drove year-over-year sales declines at a mid-teen rate in the dental technologies businesses. While year-over-year sales in the dental
technologies business declined in each quarter during 2009, the rate of year-over-year decline during the fourth quarter of 2009 improved compared to the first
three quarters of the year due to strong sales of treatment units in Europe, as well as easier year-over-year comparisons due to a large stocking order for imaging
equipment that occurred in the third quarter 2008. The Company’s acquisition of PaloDEx, a leading manufacturer of dental imaging products, in the fourth
quarter of 2009 will provide additional sales growth in the Company’s dental imaging business in 2010.
2008 COMPARED TO 2007
Segment sales for Medical Technologies increased 9.5% for 2008 as compared to 2007. Sales growth was primarily driven by the segment’s acute care
diagnostics, life sciences instrumentation and pathology diagnostics businesses. Price increases accounted for approximately 1.0% sales growth which is
reflected as a component of the sales from existing businesses.
The fourth quarter 2008 restructuring activities adversely impacted operating profit margins in the Medical Technologies segment by 80 basis points in 2008
as compared to 2007. In addition, the dilutive impact of recently acquired businesses reduced 2008 operating profit margins by 40 basis points. A decline in
demand for certain products in the dental technologies business, in addition to increased sales force investment and research and development costs within the
life sciences business, also adversely impacted year-over-year operating margin profit comparisons.
Overview of Businesses within Medical Technologies Segment
Revenues in the segment’s acute care diagnostics business grew at mid-single digit rate in 2008 as compared to 2007. The year-over-year growth was primarily
attributable to strong aftermarket consumables sales for the business’ installed base of acute care diagnostic instrumentation, sales of the business’ compact
version of its blood gas analysis instrument as well as sales resulting from the launch of the business’ AQT cardiac marker during 2008. Sales growth was
experienced in all major geographic regions during the year. Particularly strong growth in emerging markets during the first nine months of the year moderated
during the fourth quarter as a result of currency exchange rate volatility and economic uncertainty.
The segment’s life science instrumentation business experienced high-single digit revenue growth in 2008 as compared to 2007. Continued strong sales of the
business’ pathology diagnostics instrumentation and consumables offerings as well as compound microscopy product offerings drove the majority of this
growth. All major geographic regions experienced growth.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2010 Powered by Morningstar® Document Research℠
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