Mettler-Toledo International Inc. Reports First Quarter 2014 Results - - Solid Earnings Growth Despite Currency Headwinds - -

COLUMBUS, Ohio, May 8, 2014 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced first quarter results for 2014.  Provided below are the highlights:

  • Sales in local currency increased by 4% in the quarter compared with the prior year.  Reported sales increased 5% which included a 1% benefit due to currency.
  • Net earnings per diluted share as reported (EPS) were $1.93, compared with $1.69 in the first quarter of 2013.  Adjusted EPS was $2.00, an increase of 9% over the prior-year amount of $1.84.  Adjusted EPS is a non-GAAP measure and excludes purchased intangible amortization, discrete tax items, restructuring charges and other one-time items.  A reconciliation to EPS is provided on the last page of the attached schedules. 

First Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "Demand was very good in Europe, and growth in the Americas was solid.  In China, our sales performance improved, but it has not yet resulted in year over year sales growth.  In other regions of Asia / Rest of the World, growth was good.  Despite currency headwinds, we generated solid EPS growth as we continue to benefit from our various margin and cost control initiatives."  

EPS in the quarter was $1.93, compared with the prior-year amount of $1.69.  Adjusted EPS was $2.00, an increase of 9% over the prior-year amount of $1.84.  

Sales were $550.6 million, a 4% increase in local currency sales, compared with $524.4 million in the prior-year quarter.  Reported sales increased 5%, and included a 1% benefit due to currency in the quarter.  By region, local currency sales increased 9% in Europe, 3% in the Americas and 1% in Asia / Rest of World as compared to the prior year.  Adjusted operating income amounted to $91.0 million, a 6% increase from the prior-year amount of $85.4 million.  Adjusted operating income is a non-GAAP measure, and a reconciliation to earnings before taxes is provided in the attached schedules.

Cash flow from operations was $42.8 million, compared with $23.7 million in the prior-year quarter.

Outlook 

The Company updated its outlook for 2014 and noted that uncertainty in demand in some markets makes forecasting challenging.  Based on today's assessment, management anticipates that local currency sales growth in 2014 will be approximately 4% and Adjusted EPS in the range of $11.45 to $11.60, an increase of 8% to 10%.  This compares to previous guidance of Adjusted EPS in the range of $11.40 to $11.60.    

The Company stated that based on its assessment of market conditions today, management anticipates local currency sales growth in the second quarter of 2014 will be in the range of 3% to 4%.  This sales growth will result in Adjusted EPS in the range of $2.50 to $2.55, an increase of 6% to 9%. 

Adjusted EPS excludes purchased intangible amortization, discrete tax items, restructuring charges and other one-time items.  While the Company has provided an outlook for Adjusted EPS, it has not provided an outlook for EPS as it would require an estimate of non-recurring items, which are not yet known.   

Conclusion

Filliol concluded, "We have become more optimistic for the developed world as market conditions appear to be improving.  In the short term, conditions will remain challenging in emerging markets, particularly in China, although we expect that these regions will regain momentum and again become an important contributor to growth.  Globally, we are capitalizing on our sales and marketing programs and new product launches.  We are focused on execution and are convinced we can continue to enhance our market position."  

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday May 8) at 5:00 p.m. Eastern Time.  To hear a live webcast or replay of the call, visit the investor relations page on the Company's website at www.mt.com/investors.  The presentation referenced in the conference call will be located on the website prior to the call.

METTLER TOLEDO is a leading global supplier of precision instruments and services. The Company has strong leadership positions in all businesses and believes it holds global number-one market positions in a majority of them. Specifically, METTLER TOLEDO is the largest provider of weighing instruments for use in laboratory, industrial and food retailing applications. The Company is also a leading provider in analytical instruments for use in life science, reaction engineering and real-time analytic systems used in drug and chemical compound development and process analytics instruments used for in-line measurement in production processes. In addition, METTLER TOLEDO is the largest supplier of end-of-line inspection systems used in production and packaging for food, pharmaceutical and other industries. Additional information about METTLER TOLEDO can be found at www.mt.com/investors.

Statements in this press release which are not historical facts constitute "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934.  These statements involve known and unknown risks, uncertainties and other factors that may cause our or our businesses' actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or "continue" or the negative of those terms or other comparable terminology.  For a discussion of these risks and uncertainties, please see the discussion on forward-looking statements in our current report on Form 8-K to which this release has been furnished as an exhibit.  All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under the captions "Factors affecting our future operating results" and in the "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our annual report on Form 10-K for the most recently completed fiscal year, which describe risks and factors that could cause results to differ materially from those projected in those forward-looking statements.

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)














Three months ended




Three months ended






March 31, 2014


% of sales



March 31, 2013


% of sales























Net sales


$550,621

(a)

100.0



$524,355


100.0

Cost of sales


257,980


46.9



245,197


46.8

Gross profit


292,641


53.1



279,158


53.2












Research and development


29,497


5.4



27,700


5.3

Selling, general and administrative 

172,191


31.3



166,025


31.7

Amortization


7,094


1.3



5,122


1.0

Interest expense


5,666


1.0



5,400


1.0

Restructuring charges

1,492


0.3



5,002


1.0

Other charges (income), net

317


0.0



773


0.0

Earnings before taxes


76,384


13.8



69,136


13.2












Provision for taxes


18,333


3.3



16,592


3.2

Net earnings


$58,051


10.5



$52,544


10.0












Basic earnings per common share:









Net earnings 

$1.98





$1.73



Weighted average number of common shares

29,370,232





30,299,569














Diluted earnings per common share:









Net earnings 

$1.93





$1.69



Weighted average number of common 

30,088,245





31,101,979



  and common equivalent shares




















Note:










(a)  Local currency sales increased 4% as compared to the same period in 2013.


















RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME














Three months ended




Three months ended






March 31, 2014


% of sales



March 31, 2013


% of sales












Earnings before taxes


$76,384





$69,136



Amortization


7,094





5,122



Interest expense


5,666





5,400



Restructuring charges


1,492





5,002



Other charges (income), net


317





773



Adjusted operating income 


$90,953

(b)

16.5



$85,433


16.3












Note:










(b)  Adjusted operating income increased 6% as compared to the same period in 2013.


 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)




















March 31, 2014



December 31, 2013










Cash and cash equivalents


$115,804





$111,874


Accounts receivable, net


425,161





466,703


Inventories


224,420





210,414


Other current assets and prepaid expenses


124,720





124,996


Total current assets


890,105





913,987











Property, plant and equipment, net


517,686





514,438


Goodwill and other intangibles assets, net


569,861





570,260


Other non-current assets


157,485





154,134


Total assets


$2,135,137





$2,152,819











Short-term borrowings and maturities of long-term debt


$16,255





$17,067


Trade accounts payable


119,128





145,993


Accrued and other current liabilities


373,812





401,128


Total current liabilities


509,195





564,188











Long-term debt


449,582





395,960


Other non-current liabilities


252,756





257,619


Total liabilities


1,211,533





1,217,767











Shareholders' equity


923,604





935,052


Total liabilities and shareholders' equity


$2,135,137





$2,152,819


 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)








Three months ended



March 31,



2014


2013






Cash flow from operating activities:




    Net earnings

$58,051


$52,544

    Adjustments to reconcile net earnings to




      net cash provided by operating activities:




Depreciation

8,420


8,881

Amortization

7,094


5,122

Deferred tax benefit

(695)


(3,354)

Excess tax benefits from share-based payment arrangements

(4,495)


(256)

Other

3,238


2,831

Decrease in cash resulting from changes in




  operating assets and liabilities

(28,768)


(42,096)

                Net cash provided by operating activities

42,845


23,672






Cash flows from investing activities:




    Proceeds from sale of property, plant and equipment

189


36

    Purchase of property, plant and equipment

(16,716)


(19,018)

    Acquisition

(391)


-

                Net cash used in investing activities

(16,918)


(18,982)






Cash flows from financing activities:




    Proceeds from borrowings

145,879


141,959

    Repayments of borrowings

(93,229)


(89,334)

    Proceeds from exercise of stock options

3,450


7,069

    Excess tax benefits from share-based payment arrangements

4,495


256

    Repurchases of common stock 

(82,498)


(72,300)

    Other financing activities

(235)


(483)

                Net cash used in financing activities

(22,138)


(12,833)






Effect of exchange rate changes on cash and cash equivalents

141


(350)






Net increase (decrease) in cash and cash equivalents

3,930


(8,493)






Cash and cash equivalents:




    Beginning of period

111,874


101,702

    End of period

$115,804


$93,209











RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW






Net cash provided by operating activities

$42,845


$23,672

    Excess tax benefits from share-based payment arrangements

4,495


256

    Payments in respect of restructuring activities

3,141


4,646

    Proceeds from sale of property, plant and equipment

189


36

    Purchase of property, plant and equipment

(16,716)


(19,018)

Free cash flow

$33,954


$9,592

 

METTLER-TOLEDO INTERNATIONAL INC.

OTHER OPERATING STATISTICS

























SALES GROWTH BY DESTINATION

(unaudited)















Europe


Americas


Asia/RoW


Total














U.S. Dollar Sales Growth












Three Months Ended March 31, 2014

12%


2%


0%


5%














Local Currency Sales Growth












Three Months Ended March 31, 2014

9%


3%


1%


4%






































RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)

















Three months ended






March 31,






2014



2013


%
Growth














EPS as reported, diluted



$1.93



$1.69


14%














Restructuring charges, net of tax



0.04

(a)


0.12

(a)




Purchased intangible amortization, net of tax



0.03

(b)


0.03

(b)
















Adjusted EPS, diluted



$2.00



$1.84


9%














Notes:











(a)

Represents the EPS impact of restructuring charges of $1.5 million ($1.1 million after tax) and $5.0 million ($3.8 million after tax) for the three months ended March 31, 2014 and 2013, respectively, which primarily include employee related costs.



(b)

Represents the EPS impact of purchased intangibles amortization, net of tax, of $0.9 million for both the three month periods ended March 31, 2014 and 2013.

 

SOURCE Mettler-Toledo International Inc.



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