Danaher posts negative results, but is on track w/Expectations

Recently, Danaher Corp. (Parent of Matco Tools and Coats Hennessy) (DHR - Snapshot Report) reported negative second-quarter results. However, they were in line with expectations considering the weak global economy.

Net earnings for the quarter were $296 million, or $0.89 per share -- an 18.5% drop from a year-ago profit of $363 million, or $1.09 per share. However, it surpassed the Zacks Consensus estimate of $0.85 per share.
Despite the challenging economic environment, EPS was above expectations primarily on savings generated from the restructuring actions initiated in 2008 and taken in the first half of 2009 as well as reduction of material costs and operating expenses across the company.
Quarterly sales were $2.67 billion, 18.5% lower than the $3.28 billion reported a year ago. Core revenues fell 15% in the quarter, compared to the second quarter of 2008.
Revenue from the professional instrumentation segment decreased 17% for the quarter with core revenues down 15.5% primarily on lower sales volumes and incremental impact of year-over-year restructuring costs incurred during the quarter.

Environmental platform revenue fell 3.5% in the quarter with core revenue down 1%. ChemTreat revenue was essentially flat year over year as unseasonably cool weather in April and May briefly delayed sales to boiler cooler applications. Test and Measurement revenue declined 30.5% in the quarter with core revenue down 30% reflecting a very challenging market environment.

Tools and Components revenue were down 23% with a core revenue decline of 22.5%.

Danaher’s free cash flow performance is encouraging. It was $438 million at the end of second quarter 2009. Moreover, free cash flow to net income conversion ratio was 148%. Like many in our industry, they appear to be "saving" their way through the recession, not improving their top line.

NACAT Conference - 2009

Last week, Tomorrow's Technician editor, Ed Sunkin, and I drove down to Charlotte, NC for the 2009 NACAT Conference. This year it was held at the Central Piedmont Community College. The North American Council of Automotive Teachers meets annually in a different city each year. It is a week-long conference filled with day-long seminars and training. Despite the economy, this year's conference had a record attendance level. We went for the trade show portion.

The purple truck below belongs to Dan Perrin's wife. Dan is the NACAT Executive Manager. He tells us his wife Lynda lets him drive it for her because she "likes the attention it gets and would rather wave back than have to watch the road."
Northwood University had a booth. Matco Tools had a booth. They have a program to reach automotive students while at school.

Hunter was there.

Chicago Pneumatic brought this beauty.

Chicago Pneumatic also brought out their beautiful people and beautiful tools.

Delmar was there.

Snap-on had a fun time with their booth. Play darts and win a cap! The instructors liked it.

We highlighted the School of the Year program at our booth, showcasing this year's winning entry.

Gates Rubber.

Quick Update on Tool Shows

Laguna Beach, looking south.

David Bonitz, Silvertronics' Director of Sales for North America, shows off the quality of one of his leads to a Cornwell Dealer.
Patrick Gottsch, of CRKT (Columbia River Knife and Tool) had a great display. Knives are a hot item with mobile distributors.

Bill Stemple, VP of Marketing for Cornwell, reviews some of the new features of this Cornwell toolbox.

Spent last week in the West: first half of the week in Las Vegas for the Matco Show, second half in southern California (mostly Anaheim) for the Cornwell Show. Here's the 25 second review:

1 - LOTS of positive comments about business in general at both shows.

2 - was told by Matco personnel that they had strung two months of positive sales together and expected April to continue the trend

3 - was told by Cornwell management that their dealers are paying their bills on time and that technicians are (finally) getting financing.

4 - many manufacturers reported dismal sales since last Oct or Nov, but many were starting to see an uptick in orders. Some of this uptick came in February, some didn't start 'til March

5 - Santa Monica Beach has an interesting pier if you like touristy spots, but Laguna has a prettier beach.

Up is up. I'll take it. More info to follow later in the week.

Short Note Today

One day ahead of hearing it from everyone in your office, let me remind you that we Spring Forward this weekend. I can't remember if that means we gain an hour or lose an hour. And it doesn't really matter to me because I'll be flying 3 (or will it be 2) hours back in time to Las Vegas on Sunday morning. All I know for sure is that I'll be swapping our old batteries for new in every one of our smoke detectors. (Confidential to First Alert: Your marketing efforts worked on this household!)

This weekend the Matco Tool Fair begins. Next weekend I'll be off to Anaheim for the Cornwell Tool Rally. I've heard through the "grapevine" that Matco expects about 800-850 dealers and Cornwell has about 350 registered. Don't quote me on that though. As usual, I'll post everything new and exciting from the show once I get back.

In other news, at TechShop, we've been working on a new website. It will officially launch April 1, 2009, but you'll be able to see it earlier, by March 16th. Please bookmark the site, because my blog will be moving there and this blog will become inactive. I would hate to lose the few followers I have. http://www.techshopmag.com/ I'll remind you again later. We are also launching an all-new design for the magazine with our April issue. Guarantee you will LOVE it! It makes our competitors' efforts look like grade school scribbles. (Just my opinion.)

It was sunny for about a minute here today and it's starting to warm up finally. The clouds are coming in as I write this, and soon we'll endure a day and a half of rain. Nonetheless, I'm feeling optimistic. I was doing quite a bit of research this morning, and I think it's safe to say that portions of our economy are starting to see a pickup. Walmart and Sam's Club reported a sales increase of 5.1% for this February over last February. And ASA reported that a survey of 8,000 shop owners in 2008 reported a business increase of 16%. Perhaps Spring really is right around the corner, and perhaps the Recession is waning towards Recovery. I will definitely know more about what our automotive compatriots opinions are after next week.

Stay tuned!

More from the Matco Show

The Matco Tool Fair was held at Rosen Shingle Creek Resort in Orlando, FL this year. The sun was shining hot outside and the tools were hot on the inside of the show as well.

With more than 920 distributors, 90,000 sq. ft. of expo space, 110 suppliers and 170 new products with more than 65 New & Exclusives — Matco rocked Orlando. While the Expo floor was filled with celebrities — including Top Fuel Dragsters Cory McClenathan, Tony Schumacher, “Hot” Rod Fuller and Antron Brown — the real stars of the show were the Matco distributors who came from across the country to see what the suppliers and Matco had new to offer. Matco also rewarded the Top 200 distributors with a sneak preview hour on the Tool Expo floor.
Courtney Hansen, host of Spike TV’s “Powerblock” and new spokesperson for Matco, interviewed suppliers throughout the show, including Bill Fletcher from Mayhew Tools and Jon Bielfeldt of Lisle Tools. A compilation of those interviews will be produced into a DVD that will be played on Matco distributors’ trucks.

Matco Tools Hosts Their Annual Show This Weekend

This weekend all the TechShop folks will be headed to Orlando, FL for a fun-filled weekend with thousands of Matco Tool Distributors. These shows are always exciting, they're always informative, and they're always packed with new product information. This year, there's even going to be an extra special announcement about TechShop magazine, so we're all really thrilled to be attending their show. Can't say anything more than that - don't want to steal any of Matco's thunder.

It will be held at the Rosen Shingle Creek, a beautiful resort in the Lake Buena Vista area. As I look at the snow coming down outside my window, I realize a few days in Florida is just what I am needing.

The product managers at Matco tell me they will have many New and Exclusives to announce this year. That booth is always the most exciting one on the show floor, as distributors like to know what they get to bring to market before anyone else. I expect we will see many new products in the hand tools, lighting, and diagnostic tool sections.

Check back next week for product updates and photos from the show. Let me know what you want me to find out for you!