Mettler-Toledo International Inc. Reports Second Quarter 2012 Results

- - Solid Local Currency Sales and EPS Growth - -

Jul 26, 2012, 16:01 ET from Mettler-Toledo International Inc.

COLUMBUS, Ohio, July 26, 2012 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2012.  Provided below are the highlights:

  • Sales in local currency increased by 6% in the quarter compared with the prior year.  Reported sales increased 2%, which included a 4% negative currency impact.
  • Net earnings per diluted share as reported (EPS) were $1.93, compared with $1.82 in the second quarter of 2011.  Adjusted EPS was $2.15, an increase of 13% over the prior-year amount of $1.90.  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. 

Second Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "We achieved solid sales growth in the quarter despite slowing market demand and strong sales comparisons in the prior year period.  Our sales growth, combined with a focus on cost control, enabled us to generate good earnings growth in the quarter."

EPS was $1.93, compared with the prior-year amount of $1.82.  Adjusted EPS was $2.15, an increase of 13% over the prior-year amount of $1.90.  

Sales were $570.3 million, a 6% increase in local currency sales, compared with $561.1 million in the prior-year quarter.  Reported sales growth was 2%, which included a 4% negative currency impact.  By region, local currency sales increased 6% in the Americas and 14% in Asia / Rest of World and decreased 2% in Europe.  Adjusted operating income amounted to $101.1 million, a 7% increase from the prior-year amount of $94.5 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 $91.3 million, compared with $87.0 million in the prior-year quarter.

Six Month Results

EPS was $3.54, compared with the prior-year amount of $3.23.  Adjusted EPS was $3.80, an increase of 14% over the prior-year amount of $3.34.  

Sales were $1.106 billion, a 7% increase in local currency sales, compared with $1.060 billion in the prior-year period.  Reported sales growth was 4%, which included a 3% negative currency impact.  For the six month period, local currency sales increased 0% in Europe, 6% in the Americas and 16% in Asia / Rest of World.  Adjusted operating income amounted to $181.9 million, an 8% increase from the prior-year amount of $168.3 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 $112.0 million, compared with $93.6 million in the prior-year period.

Cost Control Measures

The Company has initiated a series of cost control measures in response to current economic conditions.  The Company will record pre-tax restructuring charges, consisting principally of severance-related costs, of approximately $20 million to $25 million, of which $7.8 million was recorded in the second quarter.  The remaining amount will be recognized over the next two years.  These cost control measures should reduce operating costs by approximately $40 million annually. 

Outlook 

The Company stated that there is greater uncertainty in its markets, which makes forecasting difficult.  Based on today's assessment, management anticipates that local currency sales growth in 2012 will be in the range of 3% to 5% and Adjusted EPS in the range of $9.00 to $9.40, an increase of 8% to 12%.  The Company previously provided guidance for Adjusted EPS of $9.20 to $9.50.   

The Company stated that, based on its assessment of market conditions today, management anticipates local currency sales growth in the third quarter 2012 will be in the range of 0% to 4% while Adjusted EPS will be in the range of $2.15 to $2.35, an increase of 7% to 17%. 

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, "Market conditions have become more challenging in the last few months.  In addition, we will continue to face strong sales growth comparisons from the prior year.  We have initiated cost control measures in light of current economic conditions but continue to invest for future growth.  We remain confident in our strategic initiatives and our ability to execute and believe we can outgrow the market and continue to gain share."  

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, July 26) at 4:30 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

June 30, 2012

% of sales

June 30, 2011

% of sales

Net sales

$570,283

(a)

100.0

$561,088

(a)

100.0

Cost of sales

271,275

47.6

264,897

47.2

Gross profit

299,008

52.4

296,191

52.8

Research and development

27,966

4.9

29,605

5.3

Selling, general and administrative 

169,985

29.8

172,054

30.7

Amortization

5,357

0.9

4,325

0.8

Interest expense

5,706

1.0

5,692

1.0

Restructuring charges

7,835

1.4

1,971

0.3

Other charges (income), net

433

0.1

1,207

0.2

Earnings before taxes

81,726

14.3

81,337

14.5

Provision for taxes

20,022

3.5

21,149

3.8

Net earnings

$61,704

10.8

$60,188

10.7

Basic earnings per common share:

Net earnings 

$1.97

$1.88

Weighted average number of common shares

31,267,660

31,997,850

Diluted earnings per common share:

Net earnings 

$1.93

$1.82

Weighted average number of common 

32,038,928

33,013,887

  and common equivalent shares

Note:

(a)  Local currency sales increased 6% as compared to the same period in 2011.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Three months ended

Three months ended

June 30, 2012

% of sales

June 30, 2011

% of sales

Earnings before taxes

$81,726

$81,337

Amortization

5,357

4,325

Interest expense

5,706

5,692

Restructuring charges

7,835

1,971

Other charges (income), net

433

1,207

Adjusted operating income 

$101,057

(b)

17.7

$94,532

(b)

16.8

Note:

(b)  Adjusted operating income increased 7% as compared to the same period in 2011.

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)

Six months ended

Six months ended

June 30, 2012

% of sales

June 30, 2011

% of sales

Net sales

$1,105,683

(a)

100.0

$1,059,854

(a)

100.0

Cost of sales

529,573

47.9

502,156

47.4

Gross profit

576,110

52.1

557,698

52.6

Research and development

56,633

5.1

55,956

5.3

Selling, general and administrative 

337,626

30.5

333,432

31.5

Amortization

10,556

1.0

7,947

0.7

Interest expense

11,529

1.0

11,403

1.1

Restructuring charges

8,143

0.7

2,469

0.2

Other charges (income), net

589

0.1

1,876

0.2

Earnings before taxes

151,034

13.7

144,615

13.6

Provision for taxes

37,003

3.4

37,600

3.5

Net earnings

$114,031

10.3

$107,015

10.1

Basic earnings per common share:

Net earnings 

$3.63

$3.33

Weighted average number of common shares

31,399,788

32,144,223

Diluted earnings per common share:

Net earnings 

$3.54

$3.23

Weighted average number of common 

32,212,927

33,152,760

  and common equivalent shares

Note:

(a)  Local currency sales increased 7% as compared to the same period in 2011.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Six months ended

Six months ended

June 30, 2012

% of sales

June 30, 2011

% of sales

Earnings before taxes

$151,034

$144,615

Amortization

10,556

7,947

Interest expense

11,529

11,403

Restructuring charges

8,143

2,469

Other charges (income), net

589

1,876

Adjusted operating income 

$181,851

(b)

16.4

$168,310

(b)

15.9

Note:

(b)  Adjusted operating income increased 8% as compared to the same period in 2011.

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)

June 30, 2012

December 31, 2011

Cash and cash equivalents

$134,766

$235,601

Accounts receivable, net

397,238

425,147

Inventories

217,231

241,421

Other current assets and prepaid expenses

111,741

116,694

Total current assets

860,976

1,018,863

Property, plant and equipment, net

427,666

410,007

Goodwill and other intangible assets, net

564,719

569,153

Other non-current assets

202,265

205,451

Total assets

$2,055,626

$2,203,474

Short-term borrowings and maturities of long-term debt

$27,075

$28,300

Trade accounts payable

129,988

168,109

Accrued and other current liabilities

365,939

413,435

Total current liabilities

523,002

609,844

Long-term debt

431,730

476,715

Other non-current liabilities

325,920

335,778

Total liabilities

1,280,652

1,422,337

Shareholders' equity

774,974

781,137

Total liabilities and shareholders' equity

$2,055,626

$2,203,474

  

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)

Three months ended

Six months ended

June 30,

June 30,

2012

2011

2012

2011

Cash flow from operating activities:

    Net earnings

$  61,704

$  60,188

$114,031

$107,015

    Adjustments to reconcile net earnings to

      net cash provided by operating activities:

Depreciation

8,331

7,471

16,106

14,854

Amortization

5,357

4,325

10,556

7,947

Deferred tax benefit

(2,697)

(1,465)

(4,758)

(8,058)

Excess tax benefits from share-based payment arrangements

(64)

(2,584)

(340)

(4,931)

Other

3,027

2,047

7,212

5,207

Increase (decrease) in cash resulting from changes in

  operating assets and liabilities

15,594

17,047

(30,758)

(28,481)

                Net cash provided by operating activities

91,252

87,029

112,049

93,553

Cash flows from investing activities:

    Proceeds from sale of property, plant and equipment

66

2,254

153

2,302

    Purchase of property, plant and equipment

(24,704)

(22,958)

(43,233)

(40,517)

    Acquisitions

(1,541)

(931)

(1,541)

(15,463)

    Other investing activities

-

20

-

(882)

                Net cash used in investing activities

(26,179)

(21,615)

(44,621)

(54,560)

Cash flows from financing activities:

    Proceeds from borrowings

83,332

17,659

99,813

46,443

    Repayments of borrowings

(96,132)

(92,712)

(145,612)

(104,200)

    Proceeds from exercise of stock options

426

3,520

13,264

6,583

    Excess tax benefits from share-based payment arrangements

64

2,584

340

4,931

    Repurchases of common stock 

(72,045)

(57,000)

(135,766)

(114,179)

    Other financing activities

(379)

154

(543)

67

                Net cash used in financing activities

(84,734)

(125,795)

(168,504)

(160,355)

Effect of exchange rate changes on cash and cash equivalents

(1,765)

1,042

241

2,548

Net decrease in cash and cash equivalents

(21,426)

(59,339)

(100,835)

(118,814)

Cash and cash equivalents:

    Beginning of period

156,192

388,102

235,601

447,577

    End of period

$134,766

$328,763

$134,766

$328,763

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

Net cash provided by operating activities

$  91,252

$  87,029

$112,049

$  93,553

    Excess tax benefits from share-based payment arrangements

64

2,584

340

4,931

    Payments in respect of restructuring activities

2,583

1,425

4,165

2,838

    Proceeds from sale of property, plant and equipment

66

2,254

153

2,302

    Purchase of property, plant and equipment

(24,704)

(22,958)

(43,233)

(40,517)

Free cash flow

$  69,261

$  70,334

$  73,474

$  63,107

     

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 June 30, 2012

(11%)

5%

14%

2%

Six Months Ended June 30, 2012

(6%)

6%

17%

4%

Local Currency Sales Growth

Three Months Ended June 30, 2012

(2%)

6%

14%

6%

Six Months Ended June 30, 2012

0%

6%

16%

7%

RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)

Three months ended 

Six months ended

June 30, 

June 30,

2012

2011

% Growth

2012

2011

% Growth

EPS as reported, diluted

$1.93

$1.82

6%

$3.54

$3.23

10%

Restructuring charges, net of tax

0.18

(a)

0.05

(a)

0.19

(a)

0.05

(a)

Purchased intangible amortization, net of tax

0.04

(b)

0.03

(b)

0.07

(b)

0.06

(b)

Adjusted EPS, diluted

$2.15

$1.90

13%

$3.80

$3.34

14%

Notes:

(a)  Represents the EPS impact of restructuring charges of $7.8 million ($5.9 million after tax) and $2.0 million ($1.5 million

after tax) for the three months ended June 30, 2012 and 2011, respectively and $8.1 million ($6.1 million after tax) and $2.5 million

($1.8 million after tax) for the six months ended June 30, 2012 and 2011, respectively, which primarily includes severance costs.

(b)  Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.1 million and $1.0 million for the three months

ended June 30, 2012 and 2011, respectively and $2.3 million and $1.9 million for the six months ended June 30, 2012 and 2011, respectively.

SOURCE Mettler-Toledo International Inc.



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