Mettler-Toledo International Inc. Reports Fourth Quarter 2014 Results

-- Solid Sales and Earnings Growth --

-- Excellent Cash Flow Generation --

Feb 05, 2015, 16:01 ET from Mettler-Toledo International Inc.

COLUMBUS, Ohio, Feb. 5, 2015 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results for 2014.  Provided below are the highlights:

  • Sales in local currency increased 6% in the quarter compared with the prior year.  Reported sales increased 2% as currency reduced sales growth by 4% in the quarter.
  • Net earnings per diluted share as reported (EPS) were $4.17, compared with $3.63 in the fourth quarter of 2013.  Adjusted EPS was $4.24, an increase of 11% over the prior-year amount of $3.82.  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 ended the year with very solid broad-based sales growth in the fourth quarter.  Growth in Europe exceeded expectations and I am pleased with our continued strong execution in this region.  We also continue to perform well in the Americas where market conditions remain favorable.  We had solid results in Asia / Rest of World and China's sales met expectations although weakness in certain industrial end markets continues to limit its growth.  EPS growth was good as we continue to benefit from our ongoing margin enhancement and cost control initiatives.  Finally, we had excellent cash flow generation in the quarter and for the full year." 

EPS in the quarter was $4.17, compared with the prior-year amount of $3.63.  Adjusted EPS was $4.24, an increase of 11% over the prior-year amount of $3.82.  

Sales were $697.4 million, a 6% increase in local currency sales, compared with $684.3 million in the prior-year quarter.  Reported sales increased 2% as currency reduced sales growth by 4% in the quarter.  By region, local currency sales increased 6% in both Europe and the Americas and 5% in Asia / Rest of World as compared to the prior year.  Adjusted operating income amounted to $176.3 million, a 7% increase from the prior-year amount of $165.0 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 $140.7 million, compared with $108.5 million in the prior-year quarter.

Full Year Results

EPS in 2014 was $11.44, compared with the prior-year amount of $9.96.  Adjusted EPS was $11.72, an increase of 11% over the prior-year amount of $10.58.  

Sales were $2.486 billion, a 5% increase in local currency sales, compared with $2.379 billion in the prior-year period.  Reported sales increased 4% as currency reduced sales growth by 1% for the full year.  By region, local currency sales increased 5% in Europe, 6% in the Americas and 4% in Asia / Rest of World as compared to the prior year.  Adjusted operating income amounted to $506.9 million, a 7% increase from the prior-year amount of $472.9 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 $418.9 million, compared with $345.9 million in the prior-year period.

Outlook 

The Company updated its outlook for 2015 and noted that forecasting remains challenging due to continued uncertainty in demand in some markets and greater volatility in foreign exchange rates.  Based on today's assessment, management anticipates that local currency sales growth in 2015 will be in the range of 4% to 5% and Adjusted EPS in the range of $12.70 to $12.90, an increase of 8% to 10%. 

The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in the first quarter of 2015 will be in the range of 4% to 5%.  This sales growth is expected to result in Adjusted EPS in the range of $2.13 to $2.18, an increase of 7% to 9%.

The Company also stated that the above guidance reflects the estimated impact of recent changes in foreign exchange rates.  Specifically, assuming foreign exchange rates remain constant at current levels, the Company estimates that Adjusted EPS growth is reduced by approximately 4% for the full year 2015 and by approximately 5% in the first quarter 2015 as compared to the foreign exchange rate environment that was in place last year.  This reduction in earnings growth includes the impact of previously-disclosed Swiss Franc / Euro foreign currency forward contracts.    

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 are pleased with the continued strong execution by our teams around the globe.  Our Company is well positioned for continued market share gains as we leverage increased investment in front end resources and our strong product pipeline.  We also remain focused on our margin enhancement initiatives and cash flow generation.  While we remain cautious on the global economy, we believe we can generate above market growth in 2015 and beyond."

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday February 5) 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, 2014

% of sales

December 31, 2013

% of sales

Net sales

$697,428

(a)

100.0

$684,250

100.0

Cost of sales

303,046

43.5

308,893

45.1

Gross profit

394,382

56.5

375,357

54.9

Research and development

31,323

4.5

30,597

4.5

Selling, general and administrative 

186,789

26.8

179,788

26.3

Amortization

7,610

1.1

6,935

1.0

Interest expense

6,924

1.0

6,211

0.9

Restructuring charges

1,468

0.2

6,100

0.9

Other charges (income), net

882

0.0

822

0.1

Earnings before taxes

159,386

22.9

144,904

21.2

Provision for taxes

38,214

5.5

34,742

5.1

Net earnings

$121,172

17.4

$110,162

16.1

Basic earnings per common share:

Net earnings 

$4.27

$3.72

Weighted average number of common shares

28,398,579

29,596,949

Diluted earnings per common share:

Net earnings 

$4.17

$3.63

Weighted average number of common 

29,045,269

30,366,603

  and common equivalent shares

Note:

(a)    Local currency sales increased 6% as compared to the same period in 2013.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Three months ended

Three months ended

December 31, 2014

% of sales

December 31, 2013

% of sales

Earnings before taxes

$159,386

$144,904

Amortization

7,610

6,935

Interest expense

6,924

6,211

(c)

Restructuring charges

1,468

6,100

Other charges (income), net

882

822

Adjusted operating income 

$176,270

(b)

25.3

$164,972

24.1

Note:

(b)

Adjusted operating income increased 7% as compared to the same period in 2013.

(c)

Includes a $0.4 million charge associated with the termination of the Company's $880 million Credit Agreement, which was replaced with the Company's new $800 million Credit Agreement during the three months ended December 31, 2013.

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)

Twelve months ended

Twelve months ended

December 31, 2014

% of sales

December 31, 2013

% of sales

Net sales

$2,485,983

(a)

100.0

$2,378,972

100.0

Cost of sales

1,127,233

45.3

1,097,041

46.1

Gross profit

1,358,750

54.7

1,281,931

53.9

Research and development

123,297

5.0

116,346

4.9

Selling, general and administrative 

728,582

29.3

692,693

29.1

Amortization

29,185

1.2

24,539

1.0

Interest expense

24,537

1.0

22,711

1.0

Restructuring charges

5,915

0.2

19,830

0.8

Other charges (income), net

2,230

0.1

3,103

0.2

Earnings before taxes

445,004

17.9

402,709

16.9

Provision for taxes

106,763

4.3

96,615

4.0

Net earnings

$338,241

13.6

$306,094

12.9

Basic earnings per common share:

Net earnings 

$11.71

$10.22

Weighted average number of common shares

28,890,771

29,945,954

Diluted earnings per common share:

Net earnings 

$11.44

$9.96

Weighted average number of common 

29,571,308

30,728,482

  and common equivalent shares

Note:

(a)    Local currency sales increased 5% as compared to the same period in 2013.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Twelve months ended

Twelve months ended

December 31, 2014

% of sales

December 31, 2013

% of sales

Earnings before taxes

$445,004

$402,709

Amortization

29,185

24,539

Interest expense

24,537

22,711

(c)

Restructuring charges

5,915

19,830

Other charges (income), net

2,230

3,103

Adjusted operating income 

$506,871

(b)

20.4

$472,892

19.9

Note:

(b)

Adjusted operating income increased 7% as compared to the same period in 2013.

(c)

Includes a $0.4 million charge associated with the termination of the Company's $880 million Credit Agreement, which was replaced with the Company's new $800 million Credit Agreement during the twelve months ended December 31, 2013.

 

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)

December 31, 2014

December 31, 2013

Cash and cash equivalents

$85,263

$111,874

Accounts receivable, net

435,648

466,703

Inventories

204,531

210,414

Other current assets and prepaid expenses

123,988

124,996

Total current assets

849,430

913,987

Property, plant and equipment, net

511,462

514,438

Goodwill and other intangible assets, net

556,869

570,260

Other non-current assets

91,349

154,134

Total assets

$2,009,110

$2,152,819

Short-term borrowings and maturities of long-term debt

$116,164

$17,067

Trade accounts payable

145,896

145,993

Accrued and other current liabilities

416,830

401,128

Total current liabilities

678,890

564,188

Long-term debt

335,790

395,960

Other non-current liabilities

274,835

257,619

Total liabilities

1,289,515

1,217,767

Shareholders' equity

719,595

935,052

Total liabilities and shareholders' equity

$2,009,110

$2,152,819

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)

Three months ended

Twelve months ended

December 31,

December 31,

2014

2013

2014

2013

Cash flow from operating activities:

    Net earnings

$      121,172

$      110,162

$      338,241

$      306,094

    Adjustments to reconcile net earnings to

      net cash provided by operating activities:

Depreciation

8,148

8,741

33,617

34,765

Amortization

7,610

6,935

29,185

24,539

Deferred tax benefit

19,135

16,623

13,033

8,816

Excess tax benefits from share-based payment arrangements

6,902

(1,282)

(3,557)

(1,847)

Other

3,939

3,742

13,822

13,137

Increase (decrease) in cash resulting from changes in

  operating assets and liabilities

(26,232)

(36,408)

(5,429)

(39,576)

                Net cash provided by operating activities

140,674

108,513

418,912

345,928

Cash flows from investing activities:

    Proceeds from sale of property, plant and equipment

295

3

728

211

    Purchase of property, plant and equipment

(27,980)

(25,349)

(89,388)

(82,349)

    Acquisitions

(2,399)

(2,448)

(5,784)

(2,661)

                Net cash used in investing activities

(30,084)

(27,794)

(94,444)

(84,799)

Cash flows from financing activities:

    Proceeds from borrowings

115,855

173,954

628,832

556,059

    Repayments of borrowings

(147,338)

(162,033)

(585,867)

(531,045)

    Proceeds from exercise of stock options

7,002

3,755

21,047

19,745

    Excess tax benefits from share-based payment arrangements

(6,902)

1,282

3,557

1,847

    Repurchases of common stock 

(117,524)

(77,563)

(414,000)

(294,976)

    Debt issuance costs

-

(1,241)

(941)

(1,522)

    Acquisition contingent consideration paid

(859)

-

(859)

-

    Other financing activities

(59)

345

123

(1,224)

                Net cash used in financing activities

(149,825)

(61,501)

(348,108)

(251,116)

Effect of exchange rate changes on cash and cash equivalents

(1,813)

434

(2,971)

159

Net decrease in cash and cash equivalents

(41,048)

19,652

(26,611)

10,172

Cash and cash equivalents:

    Beginning of period

126,311

92,222

111,874

101,702

    End of period

$        85,263

$      111,874

$        85,263

$      111,874

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

Net cash provided by operating activities

$      140,674

$      108,513

$      418,912

$      345,928

    Excess tax benefits from share-based payment arrangements

(6,902)

1,282

3,557

1,847

    Payments in respect of restructuring activities

1,682

4,756

9,657

18,949

    Proceeds from sale of property, plant and equipment

295

3

728

211

    Purchase of property, plant and equipment

(27,980)

(25,349)

(89,388)

(82,349)

Free cash flow

$      107,769

$        89,205

$      343,466

$      284,586

 

 

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, 2014

(2%)

5%

3%

2%

Twelve Months Ended December 31, 2014

5%

5%

3%

4%

Local Currency Sales Growth

Three Months Ended December 31, 2014

6%

6%

5%

6%

Twelve Months Ended December 31, 2014

5%

6%

4%

5%

RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)

Three months ended 

Twelve months ended

December 31

December 31

2014

2013

% Growth

2014

2013

% Growth

EPS as reported, diluted

$4.17

$3.63

15%

$11.44

$9.96

15%

Restructuring charges, net of tax

0.04

(a)

0.15

(a)

0.15

(a)

0.49

(a)

Purchased intangible amortization, net of tax

0.03

(b)

0.03

(b)

0.13

(b)

0.12

(b)

Debt extinguishment and financing costs, net of tax

-

0.01

(c)

-

0.01

(c)

Adjusted EPS, diluted

$4.24

$3.82

11%

$11.72

$10.58

11%

Notes:

(a)

Represents the EPS impact of restructuring charges of $1.5 million ($1.1 million after tax) and $6.1 million ($4.6 million after tax) for the three months ended December 31, 2014 and 2013, respectively and $5.9 million ($4.5 million after tax) and $19.8 million ($15.1 million after tax) for the twelve months ended December 31, 2014 and 2013, respectively.

(b)

Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.0 million and $0.9 million for the three months ended December 31, 2014 and 2013, respectively and $3.9 million and $3.6 million for the twelve months ended December 31, 2014 and 2013, respectively.

(c)

Represents the EPS impact of costs associated with the termination of the Company's $880 million Credit Agreement that was replaced with the Company's new $800 million Credit Agreement totaling $0.4 million ($0.3 million after tax) for the three and twelve months ended December 31, 2013.

 

 

SOURCE Mettler-Toledo International Inc.



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