Mettler-Toledo International Inc. Reports Second Quarter 2015 Results

- - Strong Margin Expansion - -

Jul 30, 2015, 16:01 ET from Mettler-Toledo International Inc.

COLUMBUS, Ohio, July 30, 2015 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2015.  Provided below are the highlights:

  • Sales in local currency increased 3% in the quarter compared with the prior year. Reported sales decreased 4% as currency reduced sales growth by 7% in the quarter.
  • Net earnings per diluted share as reported (EPS) were $2.73, compared with $2.49 in the prior-year period. Adjusted EPS was $2.80, an increase of 9% over the prior-year amount of $2.57. 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, "Sales growth in the Americas and Europe was solid and we continue to execute well in these regions.  Demand in China was weaker than expected, while Russia and Brazil also continue to face challenging market conditions.  Our other emerging markets businesses performed very well in the quarter.  We had very good margin expansion in the quarter and achieved good EPS growth despite currency headwinds to operating profit." 

EPS in the quarter was $2.73, compared with the prior-year amount of $2.49.  Adjusted EPS was $2.80, an increase of 9% over the prior-year amount of $2.57.  

Sales were $582.1 million, a 3% increase in local currency sales, compared with $608.8 million in the prior-year quarter.  Reported sales decreased 4% as currency reduced sales growth by 7% in the quarter.  By region, local currency sales increased 5% in the Americas and 4% in Europe and were constant in Asia / Rest of World as compared to the prior-year period.  Adjusted operating income amounted to $118.3 million, a 5% increase from the prior-year amount of $112.9 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 $105.2 million, compared with $108.1 million in the prior-year quarter.

Six Month Results

EPS for the six months was $4.91, compared with the prior-year amount of $4.41.  Adjusted EPS was $5.05, an increase of 11% over the prior-year amount of $4.56.  

Sales were $1.118 billion, a 4% increase in local currency sales, compared with $1.159 billion in the prior-year period.  Reported sales decreased 4%, as currency reduced sales growth by 8% in the period.  By region, local currency sales increased 6% in the Americas, 3% in Europe and 2% in Asia / Rest of World as compared to the prior-year period.  Adjusted operating income amounted to $215.6 million, a 6% increase from the prior-year amount of $203.9 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 $163.8 million, compared with $151.0 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 approximately 3%.  Adjusted EPS is forecasted to be in the range of $12.75 to $12.90, an increase of 9% to 10%.  This Adjusted EPS guidance remains the same as the Company's previously provided guidance.    

The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in the third quarter of 2015 will be in the range of 2% to 3%.  This sales growth is expected to result in Adjusted EPS in the range of $3.15 to $3.20, an increase of 7% 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, "We continue to execute well, however market conditions in certain emerging markets, most notably our China industrial business, remain stubbornly weak.  We expect global market demand to largely remain in the current range for the remainder of this year.  We believe our excellent product pipeline, proven success of our sales and marketing programs and growth potential from the expansion of our front-end resources position us well for above-market growth.  We remain focused on our margin enhancement initiatives which will continue to drive earnings growth."

Other Matters

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










June 30, 2015



% of sales



June 30, 2014



% of sales






































Net sales



$582,057

(a)



100.0





$608,834




100.0



Cost of sales



259,145




44.5





280,658




46.1



Gross profit



322,912




55.5





328,176




53.9























Research and development



29,794




5.1





32,125




5.3



Selling, general and administrative 



174,808




30.1





183,103




30.1



Amortization



7,634




1.3





7,283




1.2



Interest expense



6,942




1.2





5,956




1.0



Restructuring charges



1,720




0.3





1,905




0.3



Other charges (income), net



(33)




0.0





406




0.0



Earnings before taxes



102,047




17.5





97,398




16.0























Provision for taxes



24,490




4.2





23,376




3.8



Net earnings



$77,557




13.3





$74,022




12.2























Basic earnings per common share:



















Net earnings 



$2.79









$2.55







Weighted average number of common shares



27,843,905









29,074,695



























Diluted earnings per common share:



















Net earnings 



$2.73









$2.49







Weighted average number of common 



28,460,336









29,750,815







  and common equivalent shares







































Note:



















(a) Local currency sales increased 3% as compared to the same period in 2014.



























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

























Three months ended









Three months ended











June 30, 2015



% of sales




June 30, 2014



% of sales






















Earnings before taxes



$102,047









$97,398







Amortization



7,634









7,283







Interest expense



6,942









5,956







Restructuring charges



1,720









1,905







Other charges (income), net



(33)









406







Adjusted operating income 



$118,310

(b)



20.3





$112,948




18.6























Note:



















(b) Adjusted operating income increased 5% as compared to the same period in 2014.



 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)

























Six months ended









Six months ended











June 30, 2015



% of sales




June 30, 2014



% of sales






































Net sales



$1,117,758

(a)



100.0





$1,159,455




100.0



Cost of sales



496,041




44.4





538,638




46.5



Gross profit



621,717




55.6





620,817




53.5























Research and development



58,255




5.2





61,622




5.3



Selling, general and administrative 



347,846




31.1





355,294




30.6



Amortization



15,162




1.4





14,377




1.2



Interest expense



13,667




1.2





11,622




1.0



Restructuring charges



2,627




0.2





3,397




0.3



Other charges (income), net



(850)




(0.1)





723




0.1



Earnings before taxes



185,010




16.6





173,782




15.0























Provision for taxes



44,402




4.0





41,709




3.6



Net earnings



$140,608




12.6





$132,073




11.4























Basic earnings per common share:



















Net earnings 



$5.03









$4.52







Weighted average number of common shares



27,978,814









29,221,647



























Diluted earnings per common share:



















Net earnings 



$4.91









$4.41







Weighted average number of common 



28,611,637









29,918,456







  and common equivalent shares







































Note:



















(a) Local currency sales increased 4% as compared to the same period in 2014.



























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

























Six months ended









Six months ended











June 30, 2015



% of sales




June 30, 2014



% of sales






















Earnings before taxes



$185,010









$173,782







Amortization



15,162









14,377







Interest expense



13,667









11,622







Restructuring charges



2,627









3,397







Other charges (income), net



(850)









723







Adjusted operating income 



$215,616

(b)



19.3





$203,901




17.6























Note:



















(b) Adjusted operating income increased 6% as compared to the same period in 2014.























 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)























June 30, 2015



December 31, 2014











Cash and cash equivalents



$149,309





$85,263


Accounts receivable, net



402,404





435,648


Inventories



223,275





204,531


Other current assets and prepaid expenses



137,676





123,988


Total current assets



912,664





849,430












Property, plant and equipment, net



522,195





511,462


Goodwill and other intangible assets, net



552,138





556,869


Other non-current assets



109,952





91,349


Total assets



$2,096,949





$2,009,110












Short-term borrowings and maturities of long-term debt



$23,353





$116,164


Trade accounts payable



138,589





145,896


Accrued and other current liabilities



417,598





416,830


Total current liabilities



579,540





678,890












Long-term debt



605,141





335,790


Other non-current liabilities



258,017





274,835


Total liabilities



1,442,698





1,289,515












Shareholders' equity



654,251





719,595


Total liabilities and shareholders' equity



$2,096,949





$2,009,110












 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)














Three months ended


Six months ended




June 30,


June 30,




2015


2014


2015


2014











Cash flow from operating activities:









    Net earnings


$        77,557


$        74,022


$      140,608


$      132,073

    Adjustments to reconcile net earnings to









      net cash provided by operating activities:









Depreciation


8,357


8,454


16,658


16,874

Amortization


7,634


7,283


15,162


14,377

Deferred tax benefit


(1,011)


(2,747)


(2,681)


(3,442)

Excess tax benefits from share-based payment arrangements

(837)


(5,074)


(1,278)


(9,569)

Other


3,590


3,339


7,070


6,577

Increase (decrease) in cash resulting from changes in









  operating assets and liabilities


9,899


22,855


(11,754)


(5,913)

                Net cash provided by operating activities


105,189


108,132


163,785


150,977











Cash flows from investing activities:









    Proceeds from sale of property, plant and equipment


85


107


127


296

    Purchase of property, plant and equipment


(17,384)


(20,404)


(35,923)


(37,120)

    Acquisitions


(100)


(2,864)


(300)


(3,255)

    Net hedging settlements on intercompany loans


(4,427)


154


(12,811)


(81)

                Net cash used in investing activities


(21,826)


(23,007)


(48,907)


(40,160)











Cash flows from financing activities:









    Proceeds from borrowings


342,454


164,139


493,450


310,018

    Repayments of borrowings


(236,437)


(163,382)


(313,923)


(256,611)

    Proceeds from exercise of stock options


8,192


5,582


17,738


9,032

    Excess tax benefits from share-based payment arrangements


837


5,074


1,278


9,569

    Repurchases of common stock 


(123,728)


(101,480)


(247,473)


(183,978)

    Debt issuance costs


(432)


-


(432)


-

    Acquisition contingent consideration paid


(422)


-


(422)


-

                Net cash used in financing activities


(9,536)


(90,067)


(49,784)


(111,970)











Effect of exchange rate changes on cash and cash equivalents


123


150


(1,048)


291











Net increase (decrease) in cash and cash equivalents


73,950


(4,792)


64,046


(862)











Cash and cash equivalents:









    Beginning of period


75,359


115,804


85,263


111,874

    End of period


$      149,309


$      111,012


$      149,309


$      111,012





















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











Net cash provided by operating activities


$      105,189


$      108,132


$      163,785


$      150,977

    Excess tax benefits from share-based payment arrangements


837


5,074


1,278


9,569

    Payments in respect of restructuring activities


1,216


2,817


2,022


5,958

    Proceeds from sale of property, plant and equipment


85


107


127


296

    Purchase of property, plant and equipment


(17,384)


(20,404)


(35,923)


(37,120)

Free cash flow


$        89,943


$        95,726


$      131,289


$      129,680











 

METTLER-TOLEDO INTERNATIONAL INC.

OTHER OPERATING STATISTICS



























SALES GROWTH BY DESTINATION

(unaudited)


















Europe


Americas


Asia/RoW

Total
















U.S. Dollar Sales Growth (Decrease)













Three Months Ended June 30, 2015



(13%)


3%


(4%)


(4%)




Six Months Ended June 30, 2015



(13%)


4%


(2%)


(4%)
















Local Currency Sales Growth













Three Months Ended June 30, 2015



4%


5%


0%


3%




Six Months Ended June 30, 2015



3%


6%


2%


4%





























RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)
















Three months ended 


Six months ended



June 30,


June 30,



2015


2014


% Growth


2015


2014


% Growth














EPS as reported, diluted

$2.73


$2.49


10%


$4.91


$4.41


11%














Restructuring charges, net of tax

0.04

(a)

0.05

(a)



0.07

(a)

0.09

(a)


Purchased intangible amortization, net of tax

0.03

(b)

0.03

(b)



0.07

(b)

0.06

(b)















Adjusted EPS, diluted

$2.80


$2.57


9%


$5.05


$4.56


11%














Notes:












(a)

Represents the EPS impact of restructuring charges of $1.7 million ($1.3 million after tax) and $1.9 million ($1.4 million after tax) for the three months ended June 30, 2015 and 2014, respectively and $2.6 million ($2.0 million after tax) and $3.4 million ($2.6 million after tax) for the six months ended June 30, 2015 and 2014, respectively, which primarily include employee related costs.

(b)

Represents the EPS impact of purchased intangibles amortization, net of tax, of $0.9 million and $1.0 million for the three months ended June 30, 2015 and 2014, respectively and $1.9 million for both the six months ended June 30, 2015 and 2014, respectively.



 

SOURCE Mettler-Toledo International Inc.



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