Mettler-Toledo International Inc. Reports Third Quarter 2012 Results

- Strong Earnings Growth -

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

COLUMBUS, Ohio, Nov. 1, 2012 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced third quarter results for 2012.  Provided below are the highlights:

  • Sales in local currency increased by 1% in the quarter compared with the prior year.  Reported sales decreased 4%, which included a 5% negative currency impact.
  • Net earnings per diluted share as reported (EPS) were $2.28, compared with $2.09 in the third quarter of 2011.  Adjusted EPS was $2.40, an increase of 19% over the prior-year amount of $2.01.  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 slowing growth in customer demand throughout the world, particularly in Europe.  This environment compares to very strong sales growth in the prior-year period.  However, we had strong execution in our various margin improvement and cost control initiatives, resulting in strong EPS growth."

EPS was $2.28, compared with the prior-year amount of $2.09.  Adjusted EPS was $2.40, an increase of 19% over the prior-year amount of $2.01.  

Sales were $578.6 million, a 1% increase in local currency sales, compared with $601.1 million in the prior-year quarter.  Reported sales decreased 4%, which included a 5% negative currency impact.  By region, local currency sales increased 1% in the Americas and 7% in Asia / Rest of World and decreased 5% in Europe.  Adjusted operating income amounted to $109.2 million, an 11% increase from the prior-year amount of $98.5 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 $103.9 million, compared with $84.1 million in the prior-year quarter.

Nine Month Results

EPS was $5.82, compared with the prior-year amount of $5.31.  Adjusted EPS was $6.19, an increase of 16% over the prior-year amount of $5.35.  

Sales were $1.684 billion, a 4% increase in local currency sales, compared with $1.661 billion in the prior-year period.  Reported sales growth was 1%, which included a 3% negative currency impact.  For the nine month period, local currency sales increased 4% in the Americas and 12% in Asia / Rest of World and decreased 2% in Europe.  Adjusted operating income amounted to $291.1 million, a 9% increase from the prior-year amount of $266.8 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 $216.0 million, compared with $177.7 million in the prior-year period.

Cost Control Measures

As part of the cost control measures announced last quarter, the Company recorded pre-tax restructuring charges of $3.1 million in the third quarter and $11.3 million year to date. 

Outlook 

The Company stated that there is uncertainty in demand in most of its markets, which makes forecasting difficult.  Based on today's assessment, management anticipates that local currency sales growth in the fourth quarter will be in the range of 0% to 2% and Adjusted EPS in the range of $3.10 to $3.20, an increase of 8% to 11%. 

For the full year 2012, local currency sales growth is expected to be in the range of 3% to 4% and Adjusted EPS in the range of $9.30 to $9.40, an increase of 11% to 12%.  The Company previously provided guidance for Adjusted EPS of $9.00 to $9.40.   

The Company stated that based on its assessment of market conditions today, management anticipates local currency sales growth in 2013 will be in the range of 1% to 4%, with growth stronger in the second half of the year.  This sales growth will result in Adjusted EPS in the range of $10.00 to $10.30.  Using the midpoint of the 2012 Adjusted EPS range, this reflects an increase of 7% to 10%.   

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 are challenging with a high degree of uncertainty in the global economy.  We are taking targeted actions to control costs but continue to invest for future growth.  We are further tailoring our Spinnaker sales and marketing programs to ensure we are allocating resources to the highest potential opportunities.  Our sales and marketing approach combined with new product introductions positions us well to outgrow the market and continue to gain share."  

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, November 1) 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

September 30, 2012

% of sales

September 30, 2011

% of sales

Net sales

$578,553

(a)

100.0

$601,114

(a)

100.0

Cost of sales

270,396

46.7

286,697

47.7

Gross profit

308,157

53.3

314,417

52.3

Research and development

27,896

4.8

30,068

5.0

Selling, general and administrative 

171,021

29.6

185,832

30.9

Amortization

5,215

0.9

4,795

0.8

Interest expense

5,568

1.0

5,893

1.0

Restructuring charges

3,118

0.5

362

0.0

Other charges (income), net

(266)

0.0

409

0.1

Earnings before taxes

95,605

16.5

87,058

14.5

Provision for taxes

23,422

4.0

18,862

3.1

Net earnings

$72,183

12.5

$68,196

11.4

Basic earnings per common share:

Net earnings 

$2.34

$2.15

Weighted average number of common shares

30,846,062

31,760,270

Diluted earnings per common share:

Net earnings 

$2.28

$2.09

Weighted average number of common 

31,599,081

32,664,482

  and common equivalent shares

Note:

(a) Local currency sales increased 1% as compared to the same period in 2011.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Three months ended

Three months ended

September 30, 2012

% of sales

September 30, 2011

% of sales

Earnings before taxes

$95,605

$87,058

Amortization

5,215

4,795

Interest expense

5,568

5,893

Restructuring charges

3,118

362

Other charges (income), net

(266)

409

Adjusted operating income 

$109,240

(b)

18.9

$98,517

(b)

16.4

Note:

(b) Adjusted operating income increased 11% as compared to the same period in 2011.

  

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)

Nine months ended

Nine months ended

September 30, 2012

% of sales

September 30, 2011

% of sales

Net sales

$1,684,236

(a)

100.0

$1,660,968

(a)

100.0

Cost of sales

799,969

47.5

788,853

47.5

Gross profit

884,267

52.5

872,115

52.5

Research and development

84,529

5.0

86,024

5.2

Selling, general and administrative 

508,647

30.2

519,264

31.3

Amortization

15,771

1.0

12,742

0.8

Interest expense

17,097

1.0

17,296

1.0

Restructuring charges

11,261

0.7

2,831

0.2

Other charges (income), net

323

0.0

2,285

0.1

Earnings before taxes

246,639

14.6

231,673

13.9

Provision for taxes

60,425

3.5

56,462

3.4

Net earnings

$186,214

11.1

$175,211

10.5

Basic earnings per common share:

Net earnings 

$5.97

$5.47

Weighted average number of common shares

31,215,212

32,016,238

Diluted earnings per common share:

Net earnings 

$5.82

$5.31

Weighted average number of common 

32,008,311

32,990,000

  and common equivalent shares

Note:

(a) Local currency sales increased 4% as compared to the same period in 2011.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Nine months ended

Nine months ended

September 30, 2012

% of sales

September 30, 2011

% of sales

Earnings before taxes

$246,639

$231,673

Amortization

15,771

12,742

Interest expense

17,097

17,296

Restructuring charges

11,261

2,831

Other charges (income), net

323

2,285

Adjusted operating income 

$291,091

(b)

17.3

$266,827

(b)

16.1

Note:

(b) Adjusted operating income increased 9% as compared to the same period in 2011.

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)

September 30, 2012

December 31, 2011

Cash and cash equivalents

$105,374

$235,601

Accounts receivable, net

406,570

425,147

Inventories

214,893

241,421

Other current assets and prepaid expenses

111,526

116,694

Total current assets

838,363

1,018,863

Property, plant and equipment, net

445,024

410,007

Goodwill and other intangible assets, net

569,447

569,153

Other non-current assets

208,571

205,451

Total assets

$2,061,405

$2,203,474

Short-term borrowings and maturities of long-term debt

$36,570

$28,300

Trade accounts payable

129,982

168,109

Accrued and other current liabilities

388,686

413,435

Total current liabilities

555,238

609,844

Long-term debt

379,060

476,715

Other non-current liabilities

328,863

335,778

Total liabilities

1,263,161

1,422,337

Shareholders' equity

798,244

781,137

Total liabilities and shareholders' equity

$2,061,405

$2,203,474

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)

Three months ended

Nine months ended

September 30,

September 30,

2012

2011

2012

2011

Cash flow from operating activities:

    Net earnings

$        72,183

$        68,196

$      186,214

$      175,211

    Adjustments to reconcile net earnings to

      net cash provided by operating activities:

Depreciation

8,172

8,516

24,278

23,370

Amortization

5,215

4,795

15,771

12,742

Deferred tax benefit

(2,131)

(1,695)

(6,889)

(9,753)

Excess tax benefits from share-based payment arrangements

(162)

(1,328)

(502)

(6,259)

Other

3,394

3,054

10,606

8,261

Increase (decrease) in cash resulting from changes in

  operating assets and liabilities

17,258

2,573

(13,500)

(25,908)

                Net cash provided by operating activities

103,929

84,111

215,978

177,664

Cash flows from investing activities:

    Proceeds from sale of property, plant and equipment

191

100

344

2,402

    Purchase of property, plant and equipment

(21,059)

(23,989)

(64,292)

(64,506)

    Acquisitions

(557)

(19,199)

(2,098)

(34,662)

    Other investing activities

-

(21)

-

(903)

                Net cash used in investing activities

(21,425)

(43,109)

(66,046)

(97,669)

Cash flows from financing activities:

    Proceeds from borrowings

336,516

19,550

436,329

65,993

    Repayments of borrowings

(380,868)

(66,526)

(526,480)

(170,726)

    Proceeds from exercise of stock options

2,922

4,606

16,186

11,189

    Excess tax benefits from share-based payment arrangements

162

1,328

502

6,259

    Repurchases of common stock 

(72,084)

(57,000)

(207,850)

(171,179)

    Acquisition contingent consideration paid

-

(7,750)

-

(7,750)

    Other financing activities

(241)

(178)

(784)

(111)

                Net cash used in financing activities

(113,593)

(105,970)

(282,097)

(266,325)

Effect of exchange rate changes on cash and cash equivalents

1,697

(1,322)

1,938

1,226

Net decrease in cash and cash equivalents

(29,392)

(66,290)

(130,227)

(185,104)

Cash and cash equivalents:

    Beginning of period

134,766

328,763

235,601

447,577

    End of period

$      105,374

$      262,473

$      105,374

$      262,473

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

Net cash provided by operating activities

$      103,929

$        84,111

$      215,978

$      177,664

    Excess tax benefits from share-based payment arrangements

162

1,328

502

6,259

    Payments in respect of restructuring activities

4,064

1,265

8,230

4,103

    Proceeds from sale of property, plant and equipment

191

100

344

2,402

    Purchase of property, plant and equipment

(21,059)

(23,989)

(64,292)

(64,506)

Free cash flow

$        87,287

$        62,815

$      160,762

$      125,922

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 September 30, 2012

(15%)

0%

5%

(4%)

Nine Months Ended September 30, 2012

(9%)

4%

12%

1%

Local Currency Sales Growth

Three Months Ended September 30, 2012

(5%)

1%

7%

1%

Nine Months Ended September 30, 2012

(2%)

4%

12%

4%

RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)

Three months ended 

Nine months ended

September 30,

September 30,

2012

2011

% Growth

2012

2011

% Growth

EPS as reported, diluted

$2.28

$2.09

9%

$5.82

$5.31

10%

Restructuring charges, net of tax

0.08

(a)

0.01

(a)

0.26

(a)

0.06

(a)

Purchased intangible amortization, net of tax

0.04

(b)

0.03

(b)

0.11

(b)

0.09

(b)

Discrete tax items

-

(0.12)

(c)

-

(0.11)

(c)

Adjusted EPS, diluted

$2.40

$2.01

19%

$6.19

$5.35

16%

Notes:

(a)

Represents the EPS impact of restructuring charges of $3.1 million ($2.4 million after tax) and $0.4 million ($0.3 million after tax) for the three months ended September 30, 2012 and 2011, respectively and $11.3 million ($8.5 million after tax) and $2.8 million ($2.1 million after tax) for the nine months ended September 30, 2012 and 2011, respectively.

(b)

Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.2 million and $1.1 million for the three months ended September 30, 2012 and 2011, respectively and $3.4 million and $2.9 million for the nine months ended September 30, 2012 and 2011, respectively.

(c)

Represents the EPS impact of discrete tax items of $3.8 million for the three months and nine months ended September 30, 2011, primarily related to the favorable resolution of certain prior year tax matters.

 

SOURCE Mettler-Toledo International Inc.



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