Mettler-Toledo International Inc. Reports Third Quarter 2010 Results
- - Another Quarter of Excellent Local Currency Sales Growth - -
- - Strong Growth in Operating Profit and EPS - -
COLUMBUS, Ohio, Nov. 4, 2010 /PRNewswire-FirstCall/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced third quarter results for 2010. Provided below are the highlights:
- Sales in local currency increased by 14% in the quarter compared with the prior year. Reported sales growth increased 13%, which includes a negative 1% currency impact.
- Net earnings per diluted share as reported (EPS) were $1.82, compared with $1.21 in the third quarter of 2009. Adjusted EPS was $1.71, a 26% increase over the prior-year amount of $1.36. 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.
Third Quarter Results
Olivier Filliol, President and Chief Executive Officer, stated, “We experienced another quarter of better-than-expected sales growth driven by strong momentum in Asia / Rest of World and the Americas. This momentum reflects a positive market environment combined with strong execution of our business strategies. I am also very pleased with the strong growth in operating profit and EPS growth.”
EPS was $1.82, compared with the prior-year amount of $1.21. Adjusted EPS was $1.71, an increase of 26% over the prior-year amount of $1.36.
Sales were $490.2 million, a 14% increase in local currency sales, compared with $435.7 million in the prior year. Reported sales growth was 13%, which included a negative 1% currency impact. By region, local currency sales increased 7% in Europe, 15% in the Americas and 25% in Asia / Rest of World. Adjusted operating income amounted to $85.8 million, a 17% increase from the prior-year amount of $73.2 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 $86.0 million, compared with $79.6 million in 2009.
Nine-Month Results
EPS was $4.41, compared with the prior-year amount of $3.02. Adjusted EPS was $4.39, a 26% increase over the prior-year amount of $3.48.
Sales were $1.375 billion, a 12% increase in local currency sales, compared with $1.217 billion in the prior year. Reported sales growth was 13%, which included a 1% benefit from currency. By region, local currency sales increased 5% in Europe, 14% in the Americas and 23% in Asia / Rest of World. Adjusted operating income amounted to $226.1 million, a 21% increase from the prior-year amount of $187.2 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 $205.3 million, compared with $188.5 million in 2009.
Increase to Share Repurchase Program
The Company announced that the Board of Directors has authorized a $750 million increase to the share repurchase program. The Company currently has a $1.5 billion stock repurchase program through the end of December 2010 of which $1.24 billion has been utilized. Any amount remaining under the existing program at the end of the year will be incorporated into the new authorization. Filliol commented, “We are confident in our growth prospects now and into the future. Our balance sheet and cash flow generation remain very strong and we continue to believe that the repurchase program is an effective means to return capital to shareholders.” The Company expects the new authorization will be utilized over the next several years. The Company added that the repurchases will be made through open market transactions, and the amount and timing will depend on business and market conditions, stock price, trading restrictions, the level of acquisition activity and other factors.
Outlook
Based on today’s assessment, management anticipates that local currency sales growth in the fourth quarter will be in the range of 5% to 7% and Adjusted EPS in the range of $2.25 to $2.30, an increase of 8% to 10%.
For the full year 2010, local currency sales growth is expected to be in the range of 10% to 11% and Adjusted EPS in the range of $6.62 to $6.67, an increase of 19% to 20%. This compares with previous guidance of Adjusted EPS in the range of $6.35 to $6.45. Adjusted EPS excludes purchased intangible amortization, discrete tax items, restructuring charges and other one-time items.
The Company stated that based on their assessment of market conditions today, management anticipates local currency sales growth in 2011 will be in the range of 4% to 6% while Adjusted EPS will be in the range of $7.35 to $7.55. Using the midpoint of the 2010 Adjusted EPS range, this reflects an increase of 11% to 14%.
While the Company has provided an outlook for Adjusted EPS, it has not provided an outlook for EPS. EPS guidance would require an estimate of non-recurring items, which are not yet known.
Conclusion
Filliol concluded, “We remain optimistic about the strength of our franchise and our ability to continue to gain market share. In emerging markets, we enjoy strong leadership positions and are executing well on our proven growth strategies. In developed markets, our innovative approaches to sales and marketing, combined with a strong product line-up, have allowed us to capture share. Finally, our cost-effective operating model is benefiting from our low-cost country manufacturing and sourcing. In summary, we are confident in our ability to execute our strategic initiatives but remain cautious given the uncertainty in the global economy.”
Other Matters
The Company will host a conference call to discuss its quarterly results today (Thursday, November 4) 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 is the world’s largest manufacturer and marketer of weighing instruments for use in laboratory, industrial and food retailing applications. The Company also holds top-three market positions in several related analytical instruments and is a leading provider of automated chemistry systems used in drug and chemical compound discovery and development. In addition, the Company is the world’s largest supplier of metal detection and other end-of-line inspection systems used in production and packaging and holds a leading position in certain process analytics applications. Additional information about METTLER TOLEDO can be found at “www.mt.com.”
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. |
|||||||||
Three months ended |
Three months ended |
||||||||
September 30, 2010 |
% of sales |
September 30, 2009 |
% of sales |
||||||
Net sales |
$490,213 |
(a) |
100.0 |
$435,650 |
100.0 |
||||
Cost of sales |
234,158 |
47.8 |
210,457 |
48.3 |
|||||
Gross profit |
256,055 |
52.2 |
225,193 |
51.7 |
|||||
Research and development |
24,992 |
5.1 |
22,309 |
5.1 |
|||||
Selling, general and administrative |
145,303 |
29.6 |
129,686 |
29.8 |
|||||
Amortization |
3,667 |
0.7 |
3,237 |
0.7 |
|||||
Interest expense |
4,792 |
1.0 |
6,974 |
1.6 |
|||||
Restructuring charges |
566 |
0.1 |
6,064 |
1.4 |
|||||
Other charges (income), net |
(127) |
0.0 |
13 |
0.0 |
|||||
Earnings before taxes |
76,862 |
15.7 |
56,910 |
13.1 |
|||||
Provision for taxes |
14,781 |
3.0 |
15,365 |
3.6 |
|||||
Net earnings |
$62,081 |
12.7 |
$41,545 |
9.5 |
|||||
Basic earnings per common share: |
|||||||||
Net earnings |
$1.87 |
$1.23 |
|||||||
Weighted average number of common shares |
33,171,017 |
33,728,931 |
|||||||
Diluted earnings per common share: |
|||||||||
Net earnings |
$1.82 |
$1.21 |
|||||||
Weighted average number of common |
|||||||||
and common equivalent shares |
34,027,191 |
34,413,656 |
|||||||
Note: |
|||||||||
(a) Local currency sales increased 14% as compared to the same period in 2009. |
|||||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME |
|||||||||
Three months ended |
Three months ended |
||||||||
September 30, 2010 |
% of sales |
September 30, 2009 |
% of sales |
||||||
Earnings before taxes |
$76,862 |
$56,910 |
|||||||
Amortization |
3,667 |
3,237 |
|||||||
Interest expense |
4,792 |
6,974 |
|||||||
Restructuring charges |
566 |
6,064 |
|||||||
Other charges (income), net |
(127) |
13 |
|||||||
Adjusted operating income |
$85,760 |
(b) |
17.5 |
$73,198 |
16.8 |
||||
Note: |
|||||||||
(b) Adjusted operating income increased 17% as compared to the same period in 2009. |
|||||||||
METTLER-TOLEDO INTERNATIONAL INC. |
|||||||||
Nine months ended |
Nine months ended |
||||||||
September 30, 2010 |
% of sales |
September 30, 2009 |
% of sales |
||||||
Net sales |
$1,375,413 |
(a) |
100.0 |
$1,217,171 |
100.0 |
||||
Cost of sales |
654,807 |
47.6 |
597,822 |
49.1 |
|||||
Gross profit |
720,606 |
52.4 |
619,349 |
50.9 |
|||||
Research and development |
70,562 |
5.1 |
65,954 |
5.4 |
|||||
Selling, general and administrative |
423,919 |
30.8 |
366,209 |
30.1 |
|||||
Amortization |
10,613 |
0.8 |
8,734 |
0.7 |
|||||
Interest expense |
14,757 |
1.1 |
18,975 |
1.6 |
|||||
Restructuring charges |
2,476 |
0.2 |
28,398 |
2.3 |
|||||
Other charges (income), net |
857 |
0.0 |
1,149 |
0.1 |
|||||
Earnings before taxes |
197,422 |
14.4 |
129,930 |
10.7 |
|||||
Provision for taxes |
46,126 |
3.4 |
26,775 |
2.2 |
|||||
Net earnings |
$151,296 |
11.0 |
$103,155 |
8.5 |
|||||
Basic earnings per common share: |
|||||||||
Net earnings |
$4.52 |
$3.06 |
|||||||
Weighted average number of common shares |
33,488,099 |
33,683,443 |
|||||||
Diluted earnings per common share: |
|||||||||
Net earnings |
$4.41 |
$3.02 |
|||||||
Weighted average number of common |
|||||||||
and common equivalent shares |
34,318,582 |
34,200,834 |
|||||||
Note: |
|||||||||
(a) Local currency sales increased 12% as compared to the same period in 2009. |
|||||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME |
||||||||||
Nine months ended |
Nine months ended |
|||||||||
September 30, 2010 |
% of sales |
September 30, 2009 |
% of sales |
|||||||
Earnings before taxes |
$197,422 |
$129,930 |
||||||||
Amortization |
10,613 |
8,734 |
||||||||
Interest expense |
14,757 |
18,975 |
(c) |
|||||||
Restructuring charges |
2,476 |
28,398 |
||||||||
Other charges (income), net |
857 |
1,149 |
||||||||
Adjusted operating income |
$226,125 |
(b) |
16.4 |
$187,186 |
15.4 |
|||||
Notes: |
||||||||||
(b) Adjusted operating income increased 21% as compared to the same period in 2009. |
||||||||||
(c) Includes costs to tender $75 million of the Company's 4.85% $150 million Senior Notes and other financing-related costs totaling $1.8 million during the nine months ended September 30, 2009. |
||||||||||
METTLER-TOLEDO INTERNATIONAL INC. |
||||
September 30, 2010 |
December 31, 2009 |
|||
Cash and cash equivalents |
$142,884 |
$85,031 |
||
Accounts receivable, net |
331,954 |
312,998 |
||
Inventories |
215,316 |
168,042 |
||
Other current assets and prepaid expenses |
96,575 |
80,036 |
||
Total current assets |
786,729 |
646,107 |
||
Property, plant and equipment, net |
334,803 |
316,334 |
||
Goodwill and other intangibles assets, net |
554,683 |
546,234 |
||
Other non-current assets |
231,412 |
210,112 |
||
Total assets |
$1,907,627 |
$1,718,787 |
||
Short-term borrowings and maturities of long-term debt |
$89,350 |
$89,968 |
||
Trade accounts payable |
121,339 |
103,160 |
||
Accrued and other current liabilities |
395,335 |
301,547 |
||
Total current liabilities |
606,024 |
494,675 |
||
Long-term debt |
245,866 |
203,590 |
||
Other non-current liabilities |
300,194 |
309,384 |
||
Total liabilities |
1,152,084 |
1,007,649 |
||
Shareholders’ equity |
755,543 |
711,138 |
||
Total liabilities and shareholders’ equity |
$1,907,627 |
$1,718,787 |
||
METTLER-TOLEDO INTERNATIONAL INC. |
|||||||||
Three months ended |
Nine months ended |
||||||||
September 30, |
September 30, |
||||||||
2010 |
2009 |
2010 |
2009 |
||||||
Cash flow from operating activities: |
|||||||||
Net earnings |
$ 62,081 |
$ 41,545 |
$ 151,296 |
$ 103,155 |
|||||
Adjustments to reconcile net earnings to |
|||||||||
net cash provided by operating activities: |
|||||||||
Depreciation |
7,796 |
7,573 |
22,261 |
21,926 |
|||||
Amortization |
3,667 |
3,237 |
10,613 |
8,734 |
|||||
Deferred tax provision |
(2,858) |
(4,976) |
(7,392) |
(15,773) |
|||||
Excess tax benefits from share-based payment arrangements |
(692) |
(407) |
(3,410) |
(609) |
|||||
Other |
3,059 |
2,638 |
9,197 |
8,485 |
|||||
Increase in cash resulting from changes in |
|||||||||
operating assets and liabilities |
12,959 |
29,971 |
22,705 |
62,557 |
|||||
Net cash provided by operating activities |
86,012 |
79,581 |
205,270 |
188,475 |
|||||
Cash flows from investing activities: |
|||||||||
Proceeds from sale of property, plant and equipment |
55 |
62 |
157 |
1,979 |
|||||
Purchase of property, plant and equipment |
(18,761) |
(12,626) |
(38,564) |
(36,646) |
|||||
Acquisitions |
- |
- |
(12,557) |
(170) |
|||||
Net cash used in investing activities |
(18,706) |
(12,564) |
(50,964) |
(34,837) |
|||||
Cash flows from financing activities: |
|||||||||
Proceeds from borrowings |
41,554 |
30,167 |
93,697 |
198,072 |
|||||
Repayments of borrowings |
(5,057) |
(106,615) |
(52,115) |
(323,948) |
|||||
Debt issuance costs |
- |
(18) |
- |
(620) |
|||||
Debt extinguishment costs |
- |
(15) |
- |
(1,316) |
|||||
Proceeds from exercise of stock options |
2,860 |
1,464 |
12,244 |
6,073 |
|||||
Excess tax benefits from share-based payment arrangements |
692 |
407 |
3,410 |
609 |
|||||
Repurchases of common stock |
(76,000) |
- |
(148,794) |
- |
|||||
Other financing activities |
(3,403) |
94 |
(6,941) |
(984) |
|||||
Net cash used in financing activities |
(39,354) |
(74,516) |
(98,499) |
(122,114) |
|||||
Effect of exchange rate changes on cash and cash equivalents |
3,341 |
1,721 |
2,046 |
4,351 |
|||||
Net increase (decrease) in cash and cash equivalents |
31,293 |
(5,778) |
57,853 |
35,875 |
|||||
Cash and cash equivalents: |
|||||||||
Beginning of period |
111,591 |
119,726 |
85,031 |
78,073 |
|||||
End of period |
$ 142,884 |
$ 113,948 |
$ 142,884 |
$ 113,948 |
|||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW |
|||||||||
Net cash provided by operating activities |
$86,012 |
$79,581 |
$205,270 |
$188,475 |
|||||
Excess tax benefits from share-based payment arrangements |
692 |
407 |
3,410 |
609 |
|||||
Payments in respect of restructuring activities |
2,257 |
4,226 |
8,883 |
18,538 |
|||||
Proceeds from sale of property, plant and equipment |
55 |
62 |
157 |
1,979 |
|||||
Purchase of property, plant and equipment |
(18,761) |
(12,626) |
(38,564) |
(36,646) |
|||||
Free cash flow |
$70,255 |
$71,650 |
$179,156 |
$172,955 |
|||||
METTLER-TOLEDO INTERNATIONAL INC. |
|||||||||||
SALES GROWTH BY DESTINATION |
|||||||||||
(unaudited) |
|||||||||||
Europe |
Americas |
Asia/RoW |
Total |
||||||||
U.S. Dollar Sales Growth |
|||||||||||
Three Months Ended September 30, 2010 |
0% |
15% |
28% |
13% |
|||||||
Nine Months Ended September 30, 2010 |
3% |
15% |
27% |
13% |
|||||||
Local Currency Sales Growth |
|||||||||||
Three Months Ended September 30, 2010 |
7% |
15% |
25% |
14% |
|||||||
Nine Months Ended September 30, 2010 |
5% |
14% |
23% |
12% |
|||||||
RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS |
||||||||||||||
Three months ended |
Nine months ended |
|||||||||||||
September 30, |
September 30, |
|||||||||||||
2010 |
2009 |
% Growth |
2010 |
2009 |
% Growth |
|||||||||
EPS as reported, diluted |
$1.82 |
$1.21 |
50% |
$4.41 |
$3.02 |
46% |
||||||||
Restructuring charges, net of tax |
0.01 |
(a) |
0.13 |
(a) |
0.05 |
(a) |
0.61 |
(a) |
||||||
Debt extinguishment and financing costs, net of tax |
- |
- |
- |
0.04 |
(d) |
|||||||||
Purchased intangible amortization, net of tax |
0.03 |
(b) |
0.02 |
(b) |
0.08 |
(b) |
0.06 |
(b) |
||||||
Discrete tax items |
(0.15) |
(c) |
- |
(0.15) |
(c) |
(0.25) |
(e) |
|||||||
Adjusted EPS, diluted |
$1.71 |
$1.36 |
26% |
$4.39 |
$3.48 |
26% |
||||||||
Notes: |
||||||||||||||
(a) |
Represents the EPS impact of restructuring charges of $0.6 million ($0.4 million after tax) and $6.1 million ($4.4 million after tax) for the three months ended September 30, 2010 and 2009, respectively and $2.5 million ($1.8 million after tax) and $28.4 million ($20.7 million after tax) for the nine months ended September 30, 2010 and 2009, respectively, which primarily include severance and lease termination costs. |
|||||||||||||
(b) |
Represents the EPS impact of purchased intangible amortization, net of tax, of $0.9 million and $0.7 million for the three months ended September 30, 2010 and 2009, respectively and $2.7 million and $2.0 million for the nine months ended September 30, 2010 and 2009, respectively. |
|||||||||||||
(c) |
Discrete tax items for the three and nine months ended September 30, 2010 pertain to the EPS impact of a net tax benefit of $5.2 million primarily related to the favorable resolution of certain prior year tax matters. |
|||||||||||||
(d) |
Represents the EPS impact of costs to tender $75 million of the Company's 4.85% $150 million Senior Notes and other financing-related costs totaling $1.8 million ($1.3 million after tax) for the nine months ended September 30, 2009. |
|||||||||||||
(e) |
Discrete tax items for the nine months ended September 30, 2009 pertain to the EPS impact of a net tax benefit of $8.3 million primarily related to the favorable resolution of certain prior year tax matters. |
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SOURCE Mettler-Toledo International Inc.
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