Market Overview

Mettler-Toledo International Inc. Reports Second Quarter 2012 Results

Mettler-Toledo International Inc. Reports Second Quarter 2012 Results

- - Solid Local Currency Sales and EPS Growth - -

PR Newswire

COLUMBUS, Ohio, July 26, 2012 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2012.  Provided below are the highlights:

  • Sales in local currency increased by 6% in the quarter compared with the prior year.  Reported sales increased 2%, which included a 4% negative currency impact.
  • Net earnings per diluted share as reported (EPS) were $1.93, compared with $1.82 in the second quarter of 2011.  Adjusted EPS was $2.15, an increase of 13% over the prior-year amount of $1.90.  Adjusted EPS is a non-GAAP measure and excludes purchased intangible amortization, discrete tax items, restructuring charges and other one-time items.  A reconciliation to EPS is provided on the last page of the attached schedules. 

Second Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "We achieved solid sales growth in the quarter despite slowing market demand and strong sales comparisons in the prior year period.  Our sales growth, combined with a focus on cost control, enabled us to generate good earnings growth in the quarter."

EPS was $1.93, compared with the prior-year amount of $1.82.  Adjusted EPS was $2.15, an increase of 13% over the prior-year amount of $1.90.  

Sales were $570.3 million, a 6% increase in local currency sales, compared with $561.1 million in the prior-year quarter.  Reported sales growth was 2%, which included a 4% negative currency impact.  By region, local currency sales increased 6% in the Americas and 14% in Asia / Rest of World and decreased 2% in Europe.  Adjusted operating income amounted to $101.1 million, a 7% increase from the prior-year amount of $94.5 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 $91.3 million, compared with $87.0 million in the prior-year quarter.

Six Month Results

EPS was $3.54, compared with the prior-year amount of $3.23.  Adjusted EPS was $3.80, an increase of 14% over the prior-year amount of $3.34.  

Sales were $1.106 billion, a 7% increase in local currency sales, compared with $1.060 billion in the prior-year period.  Reported sales growth was 4%, which included a 3% negative currency impact.  For the six month period, local currency sales increased 0% in Europe, 6% in the Americas and 16% in Asia / Rest of World.  Adjusted operating income amounted to $181.9 million, an 8% increase from the prior-year amount of $168.3 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 $112.0 million, compared with $93.6 million in the prior-year period.

Cost Control Measures

The Company has initiated a series of cost control measures in response to current economic conditions.  The Company will record pre-tax restructuring charges, consisting principally of severance-related costs, of approximately $20 million to $25 million, of which $7.8 million was recorded in the second quarter.  The remaining amount will be recognized over the next two years.  These cost control measures should reduce operating costs by approximately $40 million annually. 

Outlook 

The Company stated that there is greater uncertainty in its markets, which makes forecasting difficult.  Based on today's assessment, management anticipates that local currency sales growth in 2012 will be in the range of 3% to 5% and Adjusted EPS in the range of $9.00 to $9.40, an increase of 8% to 12%.  The Company previously provided guidance for Adjusted EPS of $9.20 to $9.50.   

The Company stated that, based on its assessment of market conditions today, management anticipates local currency sales growth in the third quarter 2012 will be in the range of 0% to 4% while Adjusted EPS will be in the range of $2.15 to $2.35, an increase of 7% to 17%. 

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 have become more challenging in the last few months.  In addition, we will continue to face strong sales growth comparisons from the prior year.  We have initiated cost control measures in light of current economic conditions but continue to invest for future growth.  We remain confident in our strategic initiatives and our ability to execute and believe we can outgrow the market and continue to gain share."  

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, July 26) at 4:30 p.m. Eastern Time.  To hear a live webcast or replay of the call, visit the investor relations page on the Company's website at www.mt.com/investors.  The presentation referenced in the conference call will be located on the website prior to the call.

METTLER TOLEDO is a leading global supplier of precision instruments and services. The Company has strong leadership positions in all businesses and believes it holds global number-one market positions in a majority of them. Specifically, METTLER TOLEDO is the largest provider of weighing instruments for use in laboratory, industrial and food retailing applications. The Company is also a leading provider in analytical instruments for use in life science, reaction engineering and real-time analytic systems used in drug and chemical compound development and process analytics instruments used for in-line measurement in production processes. In addition, METTLER TOLEDO is the largest supplier of end-of-line inspection systems used in production and packaging for food, pharmaceutical and other industries. Additional information about METTLER TOLEDO can be found at www.mt.com/investors.

Statements in this press release which are not historical facts constitute "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934.  These statements involve known and unknown risks, uncertainties and other factors that may cause our or our businesses' actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or "continue" or the negative of those terms or other comparable terminology.  For a discussion of these risks and uncertainties, please see the discussion on forward-looking statements in our current report on Form 8-K to which this release has been furnished as an exhibit.  All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under the captions "Factors affecting our future operating results" and in the "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our annual report on Form 10-K for the most recently completed fiscal year, which describe risks and factors that could cause results to differ materially from those projected in those forward-looking statements.  

 






















METTLER-TOLEDO INTERNATIONAL INC.


CONSOLIDATED STATEMENTS OF OPERATIONS


(amounts in thousands except share data)


(unaudited)



























Three months ended








Three months ended










June 30, 2012


% of sales



June 30, 2011


% of sales









































Net sales




$570,283

(a)



100.0





$561,088

(a)



100.0




Cost of sales




271,275




47.6





264,897




47.2




Gross profit




299,008




52.4





296,191




52.8

























Research and development




27,966




4.9





29,605




5.3




Selling, general and administrative 




169,985




29.8





172,054




30.7




Amortization




5,357




0.9





4,325




0.8




Interest expense




5,706




1.0





5,692




1.0




Restructuring charges




7,835




1.4





1,971




0.3




Other charges (income), net




433




0.1





1,207




0.2




Earnings before taxes




81,726




14.3





81,337




14.5

























Provision for taxes




20,022




3.5





21,149




3.8




Net earnings




$61,704




10.8





$60,188




10.7

























Basic earnings per common share:





















Net earnings 




$1.97









$1.88








Weighted average number of common shares




31,267,660









31,997,850





























Diluted earnings per common share:





















Net earnings 




$1.93









$1.82








Weighted average number of common 




32,038,928









33,013,887








  and common equivalent shares










































Note:





















(a)  Local currency sales increased 6% as compared to the same period in 2011.






























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME



























Three months ended








Three months ended










June 30, 2012


% of sales



June 30, 2011


% of sales
























Earnings before taxes




$81,726









$81,337








Amortization




5,357









4,325








Interest expense




5,706









5,692








Restructuring charges




7,835









1,971








Other charges (income), net




433









1,207








Adjusted operating income 




$101,057

(b)



17.7





$94,532

(b)



16.8

























Note:





















(b)  Adjusted operating income increased 7% as compared to the same period in 2011.














 






















METTLER-TOLEDO INTERNATIONAL INC.


CONSOLIDATED STATEMENTS OF OPERATIONS


(amounts in thousands except share data)


(unaudited)


























Six months ended







Six months ended










June 30, 2012


% of sales



June 30, 2011


% of sales









































Net sales




$1,105,683

(a)



100.0





$1,059,854

(a)



100.0




Cost of sales




529,573




47.9





502,156




47.4




Gross profit




576,110




52.1





557,698




52.6

























Research and development




56,633




5.1





55,956




5.3




Selling, general and administrative 




337,626




30.5





333,432




31.5




Amortization




10,556




1.0





7,947




0.7




Interest expense




11,529




1.0





11,403




1.1




Restructuring charges




8,143




0.7





2,469




0.2




Other charges (income), net




589




0.1





1,876




0.2




Earnings before taxes




151,034




13.7





144,615




13.6

























Provision for taxes




37,003




3.4





37,600




3.5




Net earnings




$114,031




10.3





$107,015




10.1

























Basic earnings per common share:





















Net earnings 




$3.63









$3.33








Weighted average number of common shares




31,399,788









32,144,223





























Diluted earnings per common share:





















Net earnings 




$3.54









$3.23








Weighted average number of common 




32,212,927









33,152,760








  and common equivalent shares










































Note:





















(a)  Local currency sales increased 7% as compared to the same period in 2011.






























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME


























Six months ended







Six months ended










June 30, 2012


% of sales



June 30, 2011


% of sales
























Earnings before taxes




$151,034









$144,615








Amortization




10,556









7,947








Interest expense




11,529









11,403








Restructuring charges




8,143









2,469








Other charges (income), net




589









1,876








Adjusted operating income 




$181,851

(b)



16.4





$168,310

(b)



15.9

























Note:





















(b)  Adjusted operating income increased 8% as compared to the same period in 2011.














 












METTLER-TOLEDO INTERNATIONAL INC.


CONDENSED CONSOLIDATED BALANCE SHEETS


(amounts in thousands)


(unaudited)


























June 30, 2012



December 31, 2011













Cash and cash equivalents



$134,766





$235,601



Accounts receivable, net



397,238





425,147



Inventories



217,231





241,421



Other current assets and prepaid expenses



111,741





116,694



Total current assets



860,976





1,018,863














Property, plant and equipment, net



427,666





410,007



Goodwill and other intangible assets, net



564,719





569,153



Other non-current assets



202,265





205,451



Total assets



$2,055,626





$2,203,474














Short-term borrowings and maturities of long-term debt



$27,075





$28,300



Trade accounts payable



129,988





168,109



Accrued and other current liabilities



365,939





413,435



Total current liabilities



523,002





609,844














Long-term debt



431,730





476,715



Other non-current liabilities



325,920





335,778



Total liabilities



1,280,652





1,422,337














Shareholders' equity



774,974





781,137



Total liabilities and shareholders' equity



$2,055,626





$2,203,474

























  











METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)














Three months ended


Six months ended




June 30,


June 30,




2012


2011


2012


2011











Cash flow from operating activities:










    Net earnings



$  61,704


$  60,188


$114,031


$107,015

    Adjustments to reconcile net earnings to










      net cash provided by operating activities:










Depreciation



8,331


7,471


16,106


14,854

Amortization



5,357


4,325


10,556


7,947

Deferred tax benefit



(2,697)


(1,465)


(4,758)


(8,058)

Excess tax benefits from share-based payment arrangements



(64)


(2,584)


(340)


(4,931)

Other



3,027


2,047


7,212


5,207

Increase (decrease) in cash resulting from changes in










  operating assets and liabilities



15,594


17,047


(30,758)


(28,481)

                Net cash provided by operating activities



91,252


87,029


112,049


93,553











Cash flows from investing activities:










    Proceeds from sale of property, plant and equipment



66


2,254


153


2,302

    Purchase of property, plant and equipment



(24,704)


(22,958)


(43,233)


(40,517)

    Acquisitions



(1,541)


(931)


(1,541)


(15,463)

    Other investing activities



-


20


-


(882)

                Net cash used in investing activities



(26,179)


(21,615)


(44,621)


(54,560)











Cash flows from financing activities:










    Proceeds from borrowings



83,332


17,659


99,813


46,443

    Repayments of borrowings



(96,132)


(92,712)


(145,612)


(104,200)

    Proceeds from exercise of stock options



426


3,520


13,264


6,583

    Excess tax benefits from share-based payment arrangements



64


2,584


340


4,931

    Repurchases of common stock 



(72,045)


(57,000)


(135,766)


(114,179)

    Other financing activities



(379)


154


(543)


67

                Net cash used in financing activities



(84,734)


(125,795)


(168,504)


(160,355)











Effect of exchange rate changes on cash and cash equivalents



(1,765)


1,042


241


2,548











Net decrease in cash and cash equivalents



(21,426)


(59,339)


(100,835)


(118,814)











Cash and cash equivalents:










    Beginning of period



156,192


388,102


235,601


447,577

    End of period



$134,766


$328,763


$134,766


$328,763





















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











Net cash provided by operating activities



$  91,252


$  87,029


$112,049


$  93,553

    Excess tax benefits from share-based payment arrangements



64


2,584


340


4,931

    Payments in respect of restructuring activities



2,583


1,425


4,165


2,838

    Proceeds from sale of property, plant and equipment



66


2,254


153


2,302

    Purchase of property, plant and equipment



(24,704)


(22,958)


(43,233)


(40,517)

Free cash flow



$  69,261


$  70,334


$  73,474


$  63,107





















     















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 June 30, 2012


(11%)


5%


14%


2%





Six Months Ended June 30, 2012


(6%)


6%


17%


4%


















Local Currency Sales Growth













Three Months Ended June 30, 2012


(2%)


6%


14%


6%





Six Months Ended June 30, 2012


0%


6%


16%


7%
































RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 


(unaudited)


















Three months ended 


Six months ended




June 30, 


June 30,




2012


2011


% Growth


2012


2011


% Growth
















EPS as reported, diluted


$1.93


$1.82


6%


$3.54


$3.23


10%
















Restructuring charges, net of tax


0.18

(a)

0.05

(a)



0.19

(a)

0.05

(a)



Purchased intangible amortization, net of tax


0.04

(b)

0.03

(b)



0.07

(b)

0.06

(b)

















Adjusted EPS, diluted


$2.15


$1.90


13%


$3.80


$3.34


14%
















Notes:














(a)  Represents the EPS impact of restructuring charges of $7.8 million ($5.9 million after tax) and $2.0 million ($1.5 million

after tax) for the three months ended June 30, 2012 and 2011, respectively and $8.1 million ($6.1 million after tax) and $2.5 million

($1.8 million after tax) for the six months ended June 30, 2012 and 2011, respectively, which primarily includes severance costs.


(b)  Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.1 million and $1.0 million for the three months

ended June 30, 2012 and 2011, respectively and $2.3 million and $1.9 million for the six months ended June 30, 2012 and 2011, respectively.








SOURCE Mettler-Toledo International Inc.

 

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