Mettler-Toledo International Reports Third Quarter 2017 Results

Sales in local currency increased 6% in the quarter compared with the prior year. Reported sales increased 7% as currency increased sales growth by 1% in the quarter.

- - Good Sales Growth - -
- - Strong EPS Growth - -

 
[02-November-2017]
 
 

COLUMBUS, Ohio, Nov. 2, 2017 /PRNewswire/ -- Mettler-Toledo today announced third quarter results for 2017. Provided below are the highlights:

  • Sales in local currency increased 6% in the quarter compared with the prior year. Reported sales increased 7% as currency increased sales growth by 1% in the quarter.
  • Net earnings per diluted share as reported (EPS) were $3.99, compared with $3.77 in the prior-year period. Adjusted EPS was $4.36, an increase of 12% over the prior-year amount of $3.89. Adjusted EPS is a non-GAAP measure, and we have included a reconciliation to EPS on the last page of the attached schedules.

Third Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "Sales growth in the quarter was good, with excellent growth in Asia/Rest of World. In the Americas and Europe, sales growth was good in our Lab and Industrial businesses but, as expected, Food Retailing declined. Our productivity and margin initiatives continue to yield tangible results, which contributed to strong growth in EPS."

EPS in the quarter was $3.99, compared with the prior-year amount of $3.77. Adjusted EPS was $4.36, an increase of 12% over the prior-year amount of $3.89.

Sales were $698.8 million, a 6% increase in local currency sales, compared with $650.6 million in the prior-year quarter. Reported sales increased 7% as currency increased sales growth by 1% in the quarter. As compared with the prior year, local currency sales increased 2% in the Americas, 2% in Europe and 15% in Asia/Rest of World. Adjusted operating income amounted to $162.9 million, a 7% increase from the prior-year amount of $151.7 million. Adjusted operating income is a non-GAAP measure, and a reconciliation to earnings before taxes is provided in the attached schedules.

Nine Month Results

EPS for the nine months was $11.31, compared with the prior-year amount of $9.08. Adjusted EPS was $11.61, an increase of 21% over the prior-year amount of $9.56.

Sales were $1.947 billion, a 9% increase in local currency sales, compared with $1.799 billion in the prior-year period. Reported sales increased 8% as currency reduced sales growth by 1% in the period. As compared with the prior year, local currency sales increased 8% in the Americas, 6% in Europe and 13% in Asia/Rest of World. Adjusted operating income amounted to $438.8 million, a 15% increase from the prior-year amount of $382.8 million. Adjusted operating income is a non-GAAP measure, and a reconciliation to earnings before taxes is provided in the attached schedules.

Acquisition to Expand Channel Access and Brands in the Liquid Handling Market

The Company announced that, during the quarter, it completed the acquisition of Biotix Inc., a manufacturer and distributor of plastic consumables associated with pipettes, including tips, tubes and reagent reservoirs used in the life sciences market. The Company stated the acquisition will expand its consumable offering for the pipette market into indirect distribution channels. Management stated that this expansion is an excellent complement to its Rainin pipette and tips offering that is sold through its direct salesforce. Biotix is headquartered in San Diego with a manufacturing facility in Mexico.

Outlook

Based on today's assessment, management anticipates that local currency sales growth in the fourth quarter 2017 will be approximately 5.5%, and Adjusted EPS is forecasted to be approximately $5.90, an increase of 12%.

For the full year 2017, local currency sales growth is expected to be approximately 8%. This sales growth is expected to result in Adjusted EPS of approximately $17.50, an increase of 18%. This compares with previous guidance of Adjusted EPS in the range of $17.25 to $17.35.

The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in 2018 will be approximately 6%. This sales growth is expected to result in Adjusted EPS in the range of $19.65 to $19.85, which reflects growth of 12% to 13%.

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. The Company noted in making its outlook that economic uncertainty remains in certain regions of the world and market conditions are subject to change.

Conclusion

Filliol concluded, "Demand in our markets remains solid. We continue to execute well and are benefiting from our Field Turbo investments, Spinnaker sales and marketing initiatives, new product launches and margin and productivity initiatives. The addition of Biotix will further strengthen our position in the attractive liquid handling market and bring us more exposure to life sciences. As we look to the remainder of this year and into 2018, we believe we are well positioned to continue to gain market share and deliver strong results."

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, November 2) 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 (NYSE: MTD) is a leading global supplier of precision instruments and services. We have strong leadership positions in all of our businesses and believe we hold global number-one market positions in most of them. We are recognized as an innovation leader and our solutions are critical in key R&D, quality control and manufacturing processes for customers in a wide range of industries including life sciences, food and chemicals. Our sales and service network is one of the most extensive in the industry. Our products are sold in more than 140 countries and we have a direct presence in approximately 40 countries. With proven growth strategies and a focus on execution, we have achieved a long-term track record of strong financial performance. For more information, please visit 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 caption "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, 2017                                      % of sales                           September 30, 2016 % of sales
                                                                                                          ------------------                                      ----------                           ------------------ ----------


    Net sales                                                                                                                                        $698,799                 (a)                                  100.0                        $650,598     100.0

    Cost of sales                                                                                                                                     298,522                                                       42.7                         281,104      43.2
                                                                                                                                                      -------                                                       ----                         -------      ----

    Gross profit                                                                                                                                      400,277                                                       57.3                         369,494      56.8


    Research and development                                                                                                                           32,477                                                        4.6                          30,139       4.6

    Selling, general and administrative                                                                                                               204,915                                                       29.3                         187,680      28.8

    Amortization                                                                                                                                       10,716                                                        1.5                           9,087       1.4

    Interest expense                                                                                                                                    8,248                                                        1.2                           7,167       1.1

    Restructuring charges                                                                                                                               3,385                                                        0.5                           1,494       0.3

    Other charges (income), net                                                                                                                           909                                                        0.2                             603       0.1
                                                                                                                                                          ---                                                                                       ---       ---

    Earnings before taxes                                                                                                                             139,627                                                       20.0                         133,324      20.5


    Provision for taxes                                                                                                                                34,677                                                        5.0                          31,992       4.9

    Net earnings                                                                                                                                     $104,950                                                       15.0                        $101,332      15.6
                                                                                                                                                     ========                                                       ====                        ========      ====


    Basic earnings per common share:

    Net earnings                                                                                                                                        $4.10                                                                                     $3.84

    Weighted average number of common shares                                                                                                       25,613,433                                                                                26,375,468


    Diluted earnings per common share:

    Net earnings                                                                                                                                        $3.99                                                                                     $3.77

    Weighted average number of common                                                                                                              26,303,529                                                                                26,888,810

      and common equivalent shares


    Note:

    (a)     Local currency sales increased 6% as compared to the same period in 2016.



                                                                                                                                     RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME




                                                                                                          Three months ended                                                                                              Three months ended

                                                                                                          September 30, 2017                                      % of sales                           September 30, 2016 % of sales
                                                                                                          ------------------                                      ----------                           ------------------ ----------


    Earnings before taxes                                                                                                                            $139,627                                                                                  $133,324

    Amortization                                                                                                                                       10,716                                                                                     9,087

    Interest expense                                                                                                                                    8,248                                                                                     7,167

    Restructuring charges                                                                                                                               3,385                                                                                     1,494

    Other charges (income), net                                                                                                                           909                 (b)                                                                   603  (b)

    Adjusted operating income                                                                                                                        $162,885                 (c)                                   23.3                        $151,675      23.3
                                                                                                                                                     ========                                                                                  ========


    Note:

    (b)     Other charges (income), net includes acquisition costs of $1.7 million and $1.1 million for the three months ended September 30, 2017
              and 2016, respectively.

    (c)     Adjusted operating income increased 7% as compared to the same period in 2016.

 

 

                                                                                                                                                                       METTLER-TOLEDO INTERNATIONAL INC.

                                                                                                                                                                     CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                                                                                                   (amounts in thousands except share data)

                                                                                                                                                                                  (unaudited)




                                                                                                                Nine months ended                                                                                                    Nine months ended

                                                                                                                September 30, 2017                                      % of sales                               September 30, 2016 % of sales
                                                                                                                ------------------                                      ----------                               ------------------ ----------


    Net sales                                                                                                                                            $1,947,022                 (a)                                       100.0                     $1,798,558     100.0

    Cost of sales                                                                                                                                           828,928                                                            42.6                        781,581      43.5
                                                                                                                                                            -------                                                            ----                        -------      ----

    Gross profit                                                                                                                                          1,118,094                                                            57.4                      1,016,977      56.5


    Research and development                                                                                                                                 96,723                                                             5.0                         89,813       5.0

    Selling, general and administrative                                                                                                                     582,604                                                            29.9                        544,399      30.3

    Amortization                                                                                                                                             31,010                                                             1.6                         26,166       1.5

    Interest expense                                                                                                                                         24,160                                                             1.2                         20,619       1.1

    Restructuring charges                                                                                                                                     8,840                                                             0.5                          4,579       0.2

    Other charges (income), net                                                                                                                             (5,565)                                                          (0.3)                         8,492       0.5
                                                                                                                                                             ------                                                            ----                          -----       ---

    Earnings before taxes                                                                                                                                   380,322                                                            19.5                        322,909      17.9


    Provision for taxes                                                                                                                                      81,326                                                             4.1                         76,315       4.2
                                                                                                                                                                                                                               ---

    Net earnings                                                                                                                                           $298,996                                                            15.4                       $246,594      13.7
                                                                                                                                                           ========                                                            ====                       ========      ====


    Basic earnings per common share:

    Net earnings                                                                                                                                             $11.60                                                                                         $9.25

    Weighted average number of common shares                                                                                                             25,764,472                                                                                    26,644,938


    Diluted earnings per common share:

    Net earnings                                                                                                                                             $11.31                                                                                         $9.08

    Weighted average number of common                                                                                                                    26,446,677                                                                                    27,153,450

      and common equivalent shares


    Note:

    (a)     Local currency sales increased 9% as compared to the same period in 2016.



                                                                                                                                                   RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME




                                                                                                                Nine months ended                                                                                                    Nine months ended

                                                                                                                September 30, 2017                                      % of sales                               September 30, 2016 % of sales
                                                                                                                ------------------                                      ----------                               ------------------ ----------


    Earnings before taxes                                                                                                                                  $380,322                                                                                      $322,909

    Amortization                                                                                                                                             31,010                                                                                        26,166

    Interest expense                                                                                                                                         24,160                                                                                        20,619

    Restructuring charges                                                                                                                                     8,840                                                                                         4,579

    Other charges (income), net                                                                                                                             (5,565)                (b)                                                                     8,492   (d)

    Adjusted operating income                                                                                                                              $438,767                 (c)                                        22.5                       $382,765      21.3
                                                                                                                                                           ========                                                                                      ========


    Note:

    (b)     Other charges (income), net includes a one-time gain of $3.4 million relating to the sale of a facility in Switzerland in connection with
              our initiative to consolidate certain Swiss operations into a new facility and $1.7 million of acquisition costs for the nine months ended September 30, 2017.

    (c)     Adjusted operating income increased 15% as compared to the same period in 2016.

    (d)     Other charges (income), net includes a one-time non-cash pension settlement charge of $8.2 million related to a lump sum settlement
              to former employees of our U.S. pension plan and acquisition costs of $1.1 million for the nine months ended September 30, 2016.

 

 

                                                             METTLER-TOLEDO INTERNATIONAL INC.

                                                           CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                  (amounts in thousands)

                                                                        (unaudited)



                                                                                              September 30, 2017        December 31, 2016
                                                                                              ------------------        -----------------


    Cash and cash equivalents                                                                                  $169,086                     $158,674

    Accounts receivable, net                                                                                    483,167                      454,988

    Inventories                                                                                                 263,527                      222,047

    Other current assets and prepaid expenses                                                                    70,784                       61,075
                                                                                                                 ------                       ------

    Total current assets                                                                                        986,564                      896,784


    Property, plant and equipment, net                                                                          641,709                      563,707

    Goodwill and other intangibles assets, net                                                                  768,393                      643,433

    Other non-current assets                                                                                    100,533                       62,853

    Total assets                                                                                             $2,497,199                   $2,166,777
                                                                                                             ==========                   ==========


    Short-term borrowings and maturities of long-term debt                                                      $18,533                      $18,974

    Trade accounts payable                                                                                      148,521                      146,593

    Accrued and other current liabilities                                                                       485,304                      421,948
                                                                                                                -------                      -------

    Total current liabilities                                                                                   652,358                      587,515


    Long-term debt                                                                                            1,050,681                      875,056

    Other non-current liabilities                                                                               281,181                      269,263
                                                                                                                -------                      -------

    Total liabilities                                                                                         1,984,220                    1,731,834


    Shareholders' equity                                                                                        512,979                      434,943

    Total liabilities and shareholders' equity                                                               $2,497,199                   $2,166,777
                                                                                                             ==========                   ==========

 

 

                                                                                                                              METTLER-TOLEDO INTERNATIONAL INC.

                                                                                                                       CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                                                    (amounts in thousands)

                                                                                                                                         (unaudited)


                                                                                                                                                   Three months ended     Nine months ended

                                                                                                                                                      September 30,         September 30,
                                                                                                                                                      -------------         -------------

                                                                                                                                                                     2017                   2016        2017         2016
                                                                                                                                                                     ----                   ----        ----         ----


    Cash flow from operating activities:

        Net earnings                                                                                                                                             $104,950               $101,332    $298,996     $246,594

        Adjustments to reconcile net earnings to

          net cash provided by operating activities:

       Depreciation                                                                                                                                                 8,502                  8,411      24,421       24,527

       Amortization                                                                                                                                                10,716                  9,087      31,010       26,166

       Deferred tax benefit                                                                                                                                       (3,914)               (2,226)    (7,754)    (11,078)

       Other                                                                                                                                                        4,027                  3,719      12,050       10,867

       Gain on facility sale                                                                                                                                            -                     -    (3,394)           -

       Non-cash pension settlement charge                                                                                                                               -                     -          -       8,189

     Increase (decrease) in cash resulting from changes in

      operating assets and liabilities                                                                                                                             21,577                 24,613     (4,094)       2,048

                    Net cash provided by operating activities                                                                                                     145,858                144,936     351,235      307,313
                                                                                                                                                                  -------                -------     -------      -------


    Cash flows from investing activities:

        Proceeds from sale of property, plant and equipment(a)                                                                                                        228                    143      10,437          361

        Purchase of property, plant and equipment                                                                                                                (37,297)              (22,376)   (85,826)    (51,234)

        Acquisitions                                                                                                                                            (107,748)             (105,352)  (108,445)   (109,681)

        Net hedging settlements on intercompany loans                                                                                                               4,749                    956       3,716        2,031

                    Net cash used in investing activities                                                                                                       (140,068)             (126,629)  (180,118)   (158,523)
                                                                                                                                                                 --------               --------    --------     --------


    Cash flows from financing activities:

        Proceeds from borrowings                                                                                                                                  312,773                317,428     985,694      709,988

        Repayments of borrowings                                                                                                                                (218,899)             (186,229)  (834,061)   (455,913)

        Proceeds from exercise of stock options                                                                                                                     6,380                  6,222      23,315       20,187

        Repurchases of common stock                                                                                                                              (85,049)             (124,997)  (334,998)   (374,994)

        Other financing activities                                                                                                                                      -                     -    (7,205)       (680)

                    Net cash provided by (used in) financing activities                                                                                            15,205                 12,424   (167,255)   (101,412)
                                                                                                                                                                   ------                 ------    --------     --------


    Effect of exchange rate changes on cash and cash equivalents                                                                                                    1,757                    756       6,550        (132)


    Net increase in cash and cash equivalents                                                                                                                      22,752                 31,487      10,412       47,246


    Cash and cash equivalents:

        Beginning of period                                                                                                                                       146,334                114,646     158,674       98,887

        End of period                                                                                                                                            $169,086               $146,133    $169,086     $146,133
                                                                                                                                                                 ========               ========    ========     ========



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


    Net cash provided by operating activities                                                                                                                    $145,858               $144,936    $351,235     $307,313

        Payments in respect of restructuring activities                                                                                                             2,375                  2,002       7,701        6,304

        Payments for acquisition costs                                                                                                                                764                    910         764          910

        Proceeds from sale of property, plant and equipment(a)                                                                                                        228                    143      10,437          361

        Purchase of property, plant and equipment                                                                                                                (37,297)              (22,376)   (85,826)    (51,234)

    Free cash flow                                                                                                                                               $111,928               $125,615    $284,311     $263,654
                                                                                                                                                                 ========               ========    ========     ========


    (a)     Proceeds from sale of property, plant and equipment includes $9.9 million relating to the sale of a facility in Switzerland in
              connection with our initiative to consolidate certain Swiss operations into a new facility for the nine months ended
              September 30, 2017.

 

 

                                                                                                                    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, 2017                                                                                                 7%                      2%                   15%              7%

                                                   Nine Months Ended September 30, 2017                                                                                                  5%                      8%                   12%              8%


    Local Currency Sales Growth

                                                   Three Months Ended September 30, 2017                                                                                                 2%                      2%                   15%              6%

                                                   Nine Months Ended September 30, 2017                                                                                                  6%                      8%                   13%              9%



                                                                                                    RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS

                                                                                                                               (unaudited)


                                                                                                                                                          Three months ended                  Nine months ended

                                                                                                                                                            September 30,                       September 30,
                                                                                                                                                            -------------                       -------------

                                                                                                                                        2017                                    2016          % Growth                     2017              2016          % Growth
                                                                                                                                        ----                                    ----          --------                     ----              ----          --------


    EPS as reported, diluted                                                                                                                                 $3.99                   $3.77                       6%                $11.31            $9.08          25%


    Restructuring charges, net of tax                                                                                                   0.10    (a)                             0.04 (a)                                   0.26    (a)       0.13    (a)

    Purchased intangible amortization, net of tax                                                                                       0.07    (b)                             0.05 (b)                                   0.18    (b)       0.13    (b)

    Acquisition costs, net of tax                                                                                                       0.05    (c)                             0.03 (c)                                   0.05    (c)       0.03    (c)

    Income tax expense                                                                                                                  0.15    (d)                                -                                    (0.09)   (d)          -

    Gain on facility sale                                                                                                                  -                                      -                                    (0.10)   (e)          -

    Non-cash pension settlement charge, net of tax                                                                                         -                                      -                                         -             0.19    (f)
                                                                                                                                         ---                                    ---                                       ---             ----


    Adjusted EPS, diluted                                                                                                                                    $4.36                   $3.89                      12%                $11.61            $9.56          21%
                                                                                                                                                             =====                   =====                                         ======            =====


    Notes:

                          (a)                       Represents the EPS impact of restructuring charges of $3.4 million ($2.6 million after tax) and $1.5 million ($1.1
                                                    million after tax) for the three months ended September 30, 2017 and 2016, and $8.8 million ($6.9 million after tax)
                                                    and $4.6 million ($3.5 million after tax) for the nine months ended September 30, 2017 and 2016, respectively, which
                                                    primarily include employee related costs.

                          (b)                       Represents the EPS impact of purchased intangibles amortization of $2.6 million ($1.7 million after tax) and $2.0
                                                    million ($1.3 million after tax) for the three months ended September 30, 2017 and 2016, and $7.2 million ($4.7
                                                    million after tax) and $5.2 million ($3.5 million after tax) for the nine months ended September 30, 2017 and 2016,
                                                    respectively.

                          (c)                       Represents the EPS impact of acquisition costs of $1.7 million ($1.3 million after tax) and $1.1 million ($0.8
                                                    million after tax) for the three and nine months ended September 30, 2017 and 2016, respectively.

                          (d)                       Represents the EPS impact of the difference between our reported tax rate of 25% and 21% during the three and nine
                                                    months ending September 30, 2017 and our estimated annual income tax rate of 22%, which reflects a 2% estimated
                                                    annual benefit pertaining to excess tax benefits associated with stock option exercises.

                          (e)                       Represents the EPS impact of a one-time gain of $3.4 million ($2.7 million after tax) for the nine months ended
                                                    September 30, 2017 relating to the sale of a facility in Switzerland in connection with our initiative to
                                                    consolidate certain Swiss operations into a new facility.

                          (f)                       Represents the EPS impact of a one-time non-cash pension settlement charge of $8.2 million ($5.1 million after tax)
                                                    related to a lump sum settlement to former employees of our U.S. pension plan for the nine months ended September
                                                    30, 2016.

 

 

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SOURCE Mettler-Toledo International Inc.

 
 
Company Codes: NYSE:MTD
 
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