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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