Mettler-Toledo International Inc. Reports Fourth Quarter 2012 Results

- - Improved Margins Drive Strong Earnings Growth - -

06 Feb, 2013, 16:01 ET from Mettler-Toledo International Inc.

COLUMBUS, Ohio, Feb. 6, 2013 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results for 2012.  Provided below are the highlights:

  • Sales in local currency increased by 2% in the quarter compared with the prior year.  Reported sales increased 1%, which included a 1% negative currency impact.
  • Net earnings per diluted share as reported (EPS) were $3.35, compared with $2.91 in the fourth quarter of 2011.  Adjusted EPS was $3.47, an increase of 20% over the prior-year amount of $2.88.  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. 

Fourth Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "We continued to face reduced growth in customer demand throughout the world, particularly in Europe.  However, we benefited from the pro-active gross margin and cost control measures we undertook in response to this challenging macro environment.  Consequently, although sales growth was modest, we achieved strong improvement in operating margins and very strong growth in EPS."

EPS was $3.35, compared with the prior-year amount of $2.91.  Adjusted EPS was $3.47, an increase of 20% over the prior-year amount of $2.88.  

Sales were $657.3 million, a 2% increase in local currency sales, compared with $648.4 million in the prior-year quarter.  Reported sales increased 1%, which included a 1% negative currency impact.  By region, local currency sales increased 5% in the Americas and 6% in Asia / Rest of World and decreased 4% in Europe.  Adjusted operating income amounted to $153.4 million, a 17% increase from the prior-year amount of $131.7 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 $111.7 million, compared with $103.2 million in the prior-year quarter.

Full Year Results

EPS was $9.14, compared with the prior-year amount of $8.21.  Adjusted EPS was $9.67, an increase of 16% over the prior-year amount of $8.36.  

Sales were $2.342 billion, a 4% increase in local currency sales, compared with $2.309 billion in the prior-year period.  Reported sales growth was 1%, which included a 3% negative currency impact.  For the year, local currency sales increased 5% in the Americas and 10% in Asia / Rest of World and decreased 2% in Europe.  Adjusted operating income amounted to $444.5 million, a 12% increase from the prior-year amount of $398.5 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 $327.7 million, compared with $280.9 million in the prior-year period.

Cost Control Measures

As part of the cost control measures announced in the second quarter of 2012, the Company recorded pre-tax restructuring charges of $5.4 million in the fourth quarter and $16.7 million in 2012. 

Outlook 

The Company updated its outlook for 2013 and noted that uncertainty in demand exists in most of its markets, which makes forecasting difficult.  Based on today's assessment, management anticipates that local currency sales growth in 2013 will be in the range of 1% to 3%, with growth stronger in the second half of the year.  This sales growth is expected to result in Adjusted EPS in the range of $10.30 to $10.55, an increase of 7% to 9%.  This compares to previous guidance of Adjusted EPS in the range of $10.00 to $10.30

The Company stated that based on its assessment of market conditions today, management anticipates that sales in constant currency in the first quarter of 2013 will be in line with the prior year and Adjusted EPS will be in the range of $1.75 to $1.80, an increase of 5% to 8%.   

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, "Uncertainty continues to exist in our markets and conditions will likely remain challenging until the second half of this year.  We have made adjustments to our cost structure in light of the current macro environment but also continue to make meaningful investments for our long term growth.  These include investments in emerging markets, sales and marketing programs, product development and our Blue Ocean initiative.  We are confident in our ability to successfully execute our business strategies in this environment and believe we can continue to outgrow our markets and build our competitive position."  

Other Matters

The Company will host a conference call to discuss its quarterly results today (Wednesday, February 6) 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

December 31, 2012

% of sales

December 31, 2011

% of sales

Net sales

$657,292

 

(a)

100.0

$648,360

100.0

Cost of sales

300,504

45.7

302,201

46.6

Gross profit

356,788

54.3

346,159

53.4

Research and development

28,001

4.3

30,115

4.6

Selling, general and administrative 

175,379

26.7

184,368

28.4

Amortization

5,586

0.8

5,066

0.8

Interest expense

5,667

0.9

5,930

1.0

Restructuring charges

5,426

0.8

3,081

0.5

Other charges (income), net

767

0.1

95

0.0

Earnings before taxes

135,962

20.7

117,504

18.1

Provision for taxes

31,329

4.8

23,222

3.6

Net earnings

$104,633

15.9

$94,282

14.5

Basic earnings per common share:

Net earnings 

$3.43

$2.99

Weighted average number of common shares

30,532,491

31,542,400

Diluted earnings per common share:

Net earnings 

$3.35

$2.91

Weighted average number of common 

   and common equivalent shares

31,271,377

32,387,459

Note:

(a) Local currency sales increased 2% as compared to the same period in 2011.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Three months ended

Three months ended

December 31, 2012

% of sales

December 31, 2011

% of sales

Earnings before taxes

$135,962

$117,504

Amortization

5,586

5,066

Interest expense

5,667

5,930

(b)

Restructuring charges

5,426

3,081

Other charges (income), net

767

95

Adjusted operating income 

$153,408

 

(c)

23.3

$131,676

20.3

Note:

(b)

Includes a $0.3 million charge associated with the termination of the Company's $950 million Credit Agreement, which was replaced with the Company's new $880 million Credit Agreement during the three months ended December 31, 2011.

(c)

Adjusted operating income increased 17% as compared to the same period in 2011.

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)

Twelve months ended

Twelve months ended

December 31, 2012

% of sales

December 31, 2011

% of sales

Net sales

$2,341,528

 

(a)

100.0

$2,309,328

100.0

Cost of sales

1,100,473

47.0

1,091,054

47.2

Gross profit

1,241,055

53.0

1,218,274

52.8

Research and development

112,530

4.8

116,139

5.0

Selling, general and administrative 

684,026

29.2

703,632

30.5

Amortization

21,357

0.9

17,808

0.8

Interest expense

22,764

1.0

23,226

1.0

Restructuring charges

16,687

0.7

5,912

0.3

Other charges (income), net

1,090

0.1

2,380

0.1

Earnings before taxes

382,601

16.3

349,177

15.1

Provision for taxes

91,754

3.9

79,684

3.4

Net earnings

$290,847

12.4

$269,493

11.7

Basic earnings per common share:

Net earnings 

$9.37

$8.45

Weighted average number of common shares

31,044,532

31,897,779

Diluted earnings per common share:

Net earnings 

$9.14

$8.21

Weighted average number of common 

  and common equivalent shares

31,824,077

32,839,365

Note:

(a) Local currency sales increased 4% as compared to the same period in 2011.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Twelve months ended

Twelve months ended

December 31, 2012

% of sales

December 31, 2011

% of sales

Earnings before taxes

$382,601

$349,177

Amortization

21,357

17,808

Interest expense

22,764

23,226

 

(b)

Restructuring charges

16,687

5,912

Other charges (income), net

1,090

2,380

Adjusted operating income 

$444,499

(c)

19.0

$398,503

17.3

Note:

(b)

Includes a $0.3 million charge associated with the termination of the Company's $950 million Credit Agreement, which was replaced with the Company's new $880 million Credit Agreement during the twelve months ended December 31, 2011.

(c)

Adjusted operating income increased 12% as compared to the same period in 2011.

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)

December 31, 2012

December 31, 2011

Cash and cash equivalents

$101,702

$235,601

Accounts receivable, net

437,390

425,147

Inventories

198,939

241,421

Other current assets and prepaid expenses

126,889

116,694

Total current assets

864,920

1,018,863

Property, plant and equipment, net

469,421

410,007

Goodwill and other intangible assets, net

569,915

569,153

Other non-current assets

213,144

205,451

Total assets

$2,117,400

$2,203,474

Short-term borrowings and maturities of long-term debt

$41,600

$28,300

Trade accounts payable

142,362

168,109

Accrued and other current liabilities

378,715

413,435

Total current liabilities

562,677

609,844

Long-term debt

347,131

476,715

Other non-current liabilities

380,373

335,778

Total liabilities

1,290,181

1,422,337

Shareholders' equity

827,219

781,137

Total liabilities and shareholders' equity

$2,117,400

$2,203,474

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)

Three months ended

Twelve months ended

December 31,

December 31,

2012

2011

2012

2011

Cash flow from operating activities:

    Net earnings

$      104,633

$        94,282

$      290,847

$      269,493

    Adjustments to reconcile net earnings to

      net cash provided by operating activities:

Depreciation

9,143

8,319

33,421

31,689

Amortization

5,586

5,066

21,357

17,808

Deferred tax benefit

12,309

14,771

5,420

5,018

Excess tax benefits from share-based payment arrangements

(8,863)

(6,353)

(9,365)

(12,612)

Other

4,034

3,485

14,640

11,746

Increase (decrease) in cash resulting from changes in

  operating assets and liabilities

(15,116)

(16,354)

(28,616)

(42,262)

                Net cash provided by operating activities

111,726

103,216

327,704

280,880

Cash flows from investing activities:

    Proceeds from sale of property, plant and equipment

82

83

426

2,485

    Purchase of property, plant and equipment

(31,296)

(33,994)

(95,588)

(98,500)

    Acquisitions

-

(711)

(2,098)

(35,373)

    Other investing activities

-

-

-

(903)

                Net cash used in investing activities

(31,214)

(34,622)

(97,260)

(132,291)

Cash flows from financing activities:

    Proceeds from borrowings

148,070

403,606

477,998

469,599

    Repayments of borrowings

(175,603)

(476,968)

(595,682)

(647,694)

    Proceeds from exercise of stock options

5,741

9,581

21,927

20,770

    Excess tax benefits from share-based payment arrangements

8,863

6,353

9,365

12,612

    Repurchases of common stock 

(70,822)

(33,399)

(278,672)

(204,578)

    Debt issuance costs

(363)

(3,144)

(363)

(3,144)

    Acquisition contingent consideration paid

(325)

-

(325)

(7,750)

    Other financing activities

139

(173)

(645)

(284)

                Net cash used in financing activities

(84,300)

(94,144)

(366,397)

(360,469)

Effect of exchange rate changes on cash and cash equivalents

116

(1,322)

2,054

(96)

Net decrease in cash and cash equivalents

(3,672)

(26,872)

(133,899)

(211,976)

Cash and cash equivalents:

    Beginning of period

105,374

262,473

235,601

447,577

    End of period

$      101,702

$      235,601

$      101,702

$      235,601

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

Net cash provided by operating activities

$      111,726

$      103,216

$      327,704

$      280,880

    Excess tax benefits from share-based payment arrangements

8,863

6,353

9,365

12,612

    Payments in respect of restructuring activities

4,354

2,194

12,591

6,297

    Proceeds from sale of property, plant and equipment

82

83

426

2,485

    Purchase of property, plant and equipment

(31,296)

(33,994)

(95,588)

(98,500)

Free cash flow

$        93,729

$        77,852

$      254,498

$      203,774

 

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 December 31, 2012

(7%)

6%

7%

1%

Twelve Months Ended December 31, 2012

(8%)

4%

11%

1%

Local Currency Sales Growth

Three Months Ended December 31, 2012

(4%)

5%

6%

2%

Twelve Months Ended December 31, 2012

(2%)

5%

10%

4%

RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)

Three months ended 

Twelve months ended

December 31

December 31

2012

2011

% Growth

2012

2011

% Growth

EPS as reported, diluted

$3.35

$2.91

15%

$9.14

$8.21

11%

Restructuring charges, net of tax

0.13

(a)

0.07

(a)

0.39

(a)

0.13

(a)

Purchased intangible amortization, net of tax

0.03

(b)

0.03

(b)

0.14

(b)

0.12

(b)

Benefit in Q4 of adjusting Q3 YTD tax rate

(0.04)

(c)

(0.14)

(c)

-

-

Debt extinguishment and financing costs, net of tax

-

0.01

(d)

-

0.01

(d)

Discrete tax items

-

-

-

(0.11)

(e)

Adjusted EPS, diluted

$3.47

$2.88

20%

$9.67

$8.36

16%

Notes:

(a) Represents the EPS impact of restructuring charges of $5.4 million ($4.0 million after tax) and $3.1 million ($2.3 million after tax) for the three months ended December 31, 2012 and 2011, respectively and $16.7 million ($12.5 million after tax) and $5.9 million ($4.4 million after tax) for the twelve months ended December 31, 2012 and 2011, respectively.

(b) Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.0 million and $1.1 million for the three months ended December 31, 2012 and 2011, respectively and $4.5 million and $4.1 million for the twelve months ended December 31, 2012 and 2011, respectively.

(c) Represents the EPS impact of adjusting the annual effective tax rate from 24.5% to 24% and 26% to 24% during the three months ended December 31, 2012 and 2011, respectively related to the nine months ended September 30, 2012 and 2011, respectively.

(d) Represents the EPS impact of costs associated with the termination of the Company's $950 million Credit Agreement that was replaced with the Company's new $880 million Credit Agreement totaling $0.3 million ($0.2 million after tax) for the three and twelve months ended December 31, 2011.

(e) Represents the EPS impact of discrete tax items of $3.8 million for the twelve months ended December 31, 2011, primarily related to the favorable resolution of certain prior year tax matters.

 

SOURCE Mettler-Toledo International Inc.



RELATED LINKS

http://www.mt.com