2014

Mettler-Toledo International Inc. Reports Fourth Quarter 2012 Results - - Improved Margins Drive Strong Earnings Growth - -

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.



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