Mettler-Toledo International Inc. Reports Third Quarter 2011 Results

- - Excellent Local Currency Sales Growth - -

- - Strong Growth in Operating Profit and EPS, Despite Currency Headwinds - -

Nov 03, 2011, 16:01 ET from Mettler-Toledo International Inc.

COLUMBUS, Ohio, Nov. 3, 2011 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced third quarter results for 2011.  Provided below are the highlights:

  • Sales in local currency increased by 15% in the quarter compared with the prior year.  Reported sales increased 23%, which includes an 8% benefit from currency.
  • Net earnings per diluted share as reported (EPS) were $2.09, compared with $1.82 in the third quarter of 2010.  Adjusted EPS was $2.01, an 18% increase over the prior-year amount of $1.71.  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, "Business demand was strong and broad-based in the quarter, with most product lines and geographies achieving excellent sales growth.   Despite tough currency headwinds on earnings, we had very good growth in operating profit and EPS."

EPS was $2.09, compared with the prior-year amount of $1.82.  Adjusted EPS was $2.01, an increase of 18% over the prior-year amount of $1.71.  

Sales were $601.1 million, a 15% increase in local currency sales, compared with $490.2 million in the prior year.  Reported sales growth was 23%, which included an 8% benefit from currency.  By region, local currency sales increased 16% in Europe, 10% in the Americas and 21% in Asia / Rest of World.  Adjusted operating income amounted to $98.5 million, a 15% increase from the prior-year amount of $85.8 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 $84.1 million, compared with $86.0 million in the prior year.

Nine Month Results

EPS was $5.31, compared with the prior-year amount of $4.41.  Adjusted EPS was $5.35, an increase of 22% over the prior-year amount of $4.39.  

Sales were $1.661 billion, a 14% increase in local currency sales, compared with $1.375 billion in the prior year.  Reported sales growth was 21%, which included a 7% benefit from currency.  By region, local currency sales increased 14% in Europe, 10% in the Americas and 21% in Asia / Rest of World.  Adjusted operating income amounted to $266.8 million, an 18% increase from the prior-year amount of $226.1 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 $177.7 million, compared with $205.3 million in the prior year.

Outlook  

Based on today's assessment, management anticipates that local currency sales growth in the fourth quarter will be in the range of 4% to 6% and Adjusted EPS in the range of $2.75 to $2.80, an increase of 7% to 9%.  The Company stated that Adjusted EPS guidance for the fourth quarter (and full year 2011) is negatively impacted due to unfavorable currency rates, principally due to the strengthening of the Swiss franc versus the euro.  

For the full year 2011, local currency sales growth is expected to be in the range of 11% to 12% and Adjusted EPS in the range of $8.09 to $8.14, an increase of 17%.  This compares with previous guidance of Adjusted EPS in the range of $7.95 to $8.05.  

The Company stated that based on its assessment of market conditions today, management anticipates local currency sales growth in 2012 will be in the range of 4% to 7% while Adjusted EPS will be in the range of $9.00 to $9.30.  Using the midpoint of the 2011 Adjusted EPS range, this reflects an increase of 11% to 15%.  

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 are very pleased with our competitive position and the strong momentum in our business.  We expect to continue to strengthen our leadership positions and grow faster than the underlying markets.  However, we recognize we are not immune to economic weakness and remain alert to signs of market weakness.  Based on market conditions today, we are assuming that economic growth will continue but at a slower rate than 2011.  Most importantly, we remain confident in the strength of the franchise, the execution of our strategies and our ability to compete effectively in our markets."  

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, November 3) 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, 2011

% of sales

September 30, 2010

% of sales

Net sales

$601,114

(a)

100.0

$490,213

100.0

Cost of sales

286,697

47.7

234,158

47.8

Gross profit

314,417

52.3

256,055

52.2

Research and development

30,068

5.0

24,992

5.1

Selling, general and administrative

185,832

30.9

145,303

29.6

Amortization

4,795

0.8

3,667

0.7

Interest expense

5,893

1.0

4,792

1.0

Restructuring charges

362

0.0

566

0.1

Other charges (income), net

409

0.1

(127)

0.0

Earnings before taxes

87,058

14.5

76,862

15.7

Provision for taxes

18,862

3.1

14,781

3.0

Net earnings

$68,196

11.4

$62,081

12.7

Basic earnings per common share:

Net earnings

$2.15

$1.87

Weighted average number of common shares

31,760,270

33,171,017

Diluted earnings per common share:

Net earnings

$2.09

$1.82

Weighted average number of common

 and common equivalent shares

32,664,482

34,027,191

Note:

(a)  Local currency sales increased 15% as compared to the same period in 2010.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Three months ended

Three months ended

September 30, 2011

% of sales

September 30, 2010

% of sales

Earnings before taxes

$87,058

$76,862

Amortization

4,795

3,667

Interest expense

5,893

4,792

Restructuring charges

362

566

Other charges (income), net

409

(127)

Adjusted operating income

$98,517

(b)

16.4

$85,760

17.5

Note:

(b)  Adjusted operating income increased 15% as compared to the same period in 2010.

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)

Nine months ended

Nine months ended

September 30, 2011

% of sales

September 30, 2010

% of sales

Net sales

$1,660,968

(a)

100.0

$1,375,413

100.0

Cost of sales

788,853

47.5

654,807

47.6

Gross profit

872,115

52.5

720,606

52.4

Research and development

86,024

5.2

70,562

5.1

Selling, general and administrative

519,264

31.3

423,919

30.8

Amortization

12,742

0.8

10,613

0.8

Interest expense

17,296

1.0

14,757

1.1

Restructuring charges

2,831

0.2

2,476

0.2

Other charges (income), net

2,285

0.1

857

0.0

Earnings before taxes

231,673

13.9

197,422

14.4

Provision for taxes

56,462

3.4

46,126

3.4

Net earnings

$175,211

10.5

$151,296

11.0

Basic earnings per common share:

Net earnings

$5.47

$4.52

Weighted average number of common shares

32,016,238

33,488,099

Diluted earnings per common share:

Net earnings

$5.31

$4.41

Weighted average number of common

 and common equivalent shares

32,990,000

34,318,582

Note:

(a)  Local currency sales increased 14% compared to the same period in 2010.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

Nine months ended

Nine months ended

September 30, 2011

% of sales

September 30, 2010

% of sales

Earnings before taxes

$231,673

$197,422

Amortization

12,742

10,613

Interest expense

17,296

14,757

Restructuring charges

2,831

2,476

Other charges (income), net

2,285

857

Adjusted operating income

$266,827

(b)

16.1

$226,125

16.4

Note:

(b)  Adjusted operating income increased 18% compared to the same period in 2010.

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)

September 30, 2011

December 31, 2010

Cash and cash equivalents

$262,473

$447,577

Accounts receivable, net

398,402

368,936

Inventories

265,351

217,104

Other current assets and prepaid expenses

126,920

111,278

Total current assets

1,053,146

1,144,895

Property, plant and equipment, net

408,156

364,472

Goodwill and other intangibles assets, net

576,065

539,071

Other non-current assets

258,070

234,625

Total assets

$2,295,437

$2,283,063

Short-term borrowings and maturities of long-term debt

$31,143

$10,902

Trade accounts payable

167,919

138,105

Accrued and other current liabilities

418,221

393,179

Total current liabilities

617,283

542,186

Long-term debt

550,554

670,301

Other non-current liabilities

308,191

298,992

Total liabilities

1,476,028

1,511,479

Shareholders' equity

819,409

771,584

Total liabilities and shareholders' equity

$2,295,437

$2,283,063

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)

Three months ended

Nine months ended

September 30,

September 30,

2011

2010

2011

2010

Cash flow from operating activities:

   Net earnings

$  68,196

$  62,081

$175,211

$151,296

   Adjustments to reconcile net earnings to

     net cash provided by operating activities:

Depreciation

8,516

7,796

23,370

22,261

Amortization

4,795

3,667

12,742

10,613

Deferred tax provision

(1,695)

(2,858)

(9,753)

(7,392)

Excess tax benefits from share-based payment arrangements

(1,328)

(692)

(6,259)

(3,410)

Other

3,054

3,059

8,261

9,197

Increase (decrease) in cash resulting from changes in

 operating assets and liabilities

2,573

12,959

(25,908)

22,705

               Net cash provided by operating activities

84,111

86,012

177,664

205,270

Cash flows from investing activities:

   Proceeds from sale of property, plant and equipment

100

55

2,402

157

   Purchase of property, plant and equipment

(23,989)

(18,761)

(64,506)

(38,564)

   Acquisitions

(19,199)

-

(34,662)

(12,557)

Other investing activities

(21)

-

(903)

-

               Net cash used in investing activities

(43,109)

(18,706)

(97,669)

(50,964)

Cash flows from financing activities:

   Proceeds from borrowings

19,550

41,554

65,993

93,697

   Repayments of borrowings

(66,526)

(5,057)

(170,726)

(52,115)

   Proceeds from exercise of stock options

4,606

2,860

11,189

12,244

   Excess tax benefits from share-based payment arrangements

1,328

692

6,259

3,410

   Repurchases of common stock

(57,000)

(76,000)

(171,179)

(148,794)

   Acquisition contingent consideration paid

(7,750)

-

(7,750)

-

   Other financing activities

(178)

(3,403)

(111)

(6,941)

               Net cash used in financing activities

(105,970)

(39,354)

(266,325)

(98,499)

Effect of exchange rate changes on cash and cash equivalents

(1,322)

3,341

1,226

2,046

Net (decrease) increase in cash and cash equivalents

(66,290)

31,293

(185,104)

57,853

Cash and cash equivalents:

   Beginning of period

328,763

111,591

447,577

85,031

   End of period

$262,473

$142,884

$262,473

$142,884

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

Net cash provided by operating activities

$  84,111

$  86,012

$177,664

$205,270

   Excess tax benefits from share-based payment arrangements

1,328

692

6,259

3,410

   Payments in respect of restructuring activities

1,265

2,257

4,103

8,883

   Proceeds from sale of property, plant and equipment

100

55

2,402

157

   Purchase of property, plant and equipment

(23,989)

(18,761)

(64,506)

(38,564)

Free cash flow

$  62,815

$  70,255

$125,922

$179,156

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, 2011

28%

11%

30%

23%

Nine Months Ended September 30, 2011

24%

11%

29%

21%

Local Currency Sales Growth

Three Months Ended September 30, 2011

16%

10%

21%

15%

Nine Months Ended September 30, 2011

14%

10%

21%

14%

RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS

(unaudited)

Three months ended

Nine months ended

September 30,

September 30,

2011

2010

% Growth

2011

2010

% Growth

EPS as reported, diluted

$2.09

$ 1.82

15%

$5.31

$4.41

20%

Restructuring charges, net of tax

0.01

(a)

0.01

(a)

0.06

(a)

0.05

(a)

Purchased intangible amortization, net of tax

0.03

(b)

0.03

(b)

0.09

(b)

0.08

(b)

Discrete tax items

(0.12)

(c)

(0.15)

(c)

(0.11)

(c)

(0.15)

(c)

Adjusted EPS, diluted

$2.01

$1.71

18%

$5.35

$4.39

22%

Notes:

(a)

Represents the EPS impact of restructuring charges of $0.4 million ($0.3 million after tax) and $0.6 million ($0.4 million after tax) for the three months ended September 30, 2011 and 2010, respectively and $2.8 million ($2.1 million after tax) and $2.5 million ($1.8 million after tax) for the nine months ended September 30, 2011 and 2010, respectively.

(b)

Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.1 million and $0.9 million for the three months ended September 30, 2011 and 2010, respectively and $2.9 million and $2.7 million for the nine months ended September 30, 2011 and 2010, respectively.

(c)

Represents the EPS impact of discrete tax items of $3.8 million and $5.2 million for the three months and nine months ended September 30, 2011 and 2010, respectively primarily related to the favorable resolution of certain prior year tax matters.

SOURCE Mettler-Toledo International Inc.



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http://www.mt.com/investors