Mettler-Toledo International Inc. Reports First Quarter 2014 Results - Mettler-Toledo Intl (NYSE:MTD)

- - Solid Earnings Growth Despite Currency Headwinds - -

COLUMBUS, Ohio, May 8, 2014 /PRNewswire/ -- Mettler-Toledo International Inc. MTD today announced first quarter results for 2014. Provided below are the highlights:

Sales in local currency increased by 4% in the quarter compared with the prior year. Reported sales increased 5% which included a 1% benefit due to currency.
Net earnings per diluted share as reported (EPS) were $1.93, compared with $1.69 in the first quarter of 2013. Adjusted EPS was $2.00, an increase of 9% over the prior-year amount of $1.84. 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.

First Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "Demand was very good in Europe, and growth in the Americas was solid. In China, our sales performance improved, but it has not yet resulted in year over year sales growth. In other regions of Asia / Rest of the World, growth was good. Despite currency headwinds, we generated solid EPS growth as we continue to benefit from our various margin and cost control initiatives."

EPS in the quarter was $1.93, compared with the prior-year amount of $1.69. Adjusted EPS was $2.00, an increase of 9% over the prior-year amount of $1.84.

Sales were $550.6 million, a 4% increase in local currency sales, compared with $524.4 million in the prior-year quarter. Reported sales increased 5%, and included a 1% benefit due to currency in the quarter. By region, local currency sales increased 9% in Europe, 3% in the Americas and 1% in Asia / Rest of World as compared to the prior year. Adjusted operating income amounted to $91.0 million, a 6% increase from the prior-year amount of $85.4 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 $42.8 million, compared with $23.7 million in the prior-year quarter.

Outlook

The Company updated its outlook for 2014 and noted that uncertainty in demand in some markets makes forecasting challenging. Based on today's assessment, management anticipates that local currency sales growth in 2014 will be approximately 4% and Adjusted EPS in the range of $11.45 to $11.60, an increase of 8% to 10%. This compares to previous guidance of Adjusted EPS in the range of $11.40 to $11.60.

The Company stated that based on its assessment of market conditions today, management anticipates local currency sales growth in the second quarter of 2014 will be in the range of 3% to 4%. This sales growth will result in Adjusted EPS in the range of $2.50 to $2.55, an increase of 6% to 9%.

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 have become more optimistic for the developed world as market conditions appear to be improving. In the short term, conditions will remain challenging in emerging markets, particularly in China, although we expect that these regions will regain momentum and again become an important contributor to growth. Globally, we are capitalizing on our sales and marketing programs and new product launches. We are focused on execution and are convinced we can continue to enhance our market position."

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday May 8) 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
		March 31, 2014		% of sales		March 31, 2013	% of sales


Net sales		$550,621	(a)	100.0		$524,355	100.0
Cost of sales		257,980		46.9		245,197	46.8
Gross profit		292,641		53.1		279,158	53.2

Research and development		29,497		5.4		27,700	5.3
Selling, general and administrative		172,191		31.3		166,025	31.7
Amortization		7,094		1.3		5,122	1.0
Interest expense		5,666		1.0		5,400	1.0
Restructuring charges		1,492		0.3		5,002	1.0
Other charges (income), net		317		0.0		773	0.0
Earnings before taxes		76,384		13.8		69,136	13.2

Provision for taxes		18,333		3.3		16,592	3.2
Net earnings		$58,051		10.5		$52,544	10.0

Basic earnings per common share:
Net earnings		$1.98				$1.73
Weighted average number of common shares		29,370,232				30,299,569

Diluted earnings per common share:
Net earnings		$1.93				$1.69
Weighted average number of common		30,088,245				31,101,979
and common equivalent shares

Note:
(a) Local currency sales increased 4% as compared to the same period in 2013.


RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

	Three months ended				Three months ended
		March 31, 2014		% of sales		March 31, 2013	% of sales

Earnings before taxes		$76,384				$69,136
Amortization		7,094				5,122
Interest expense		5,666				5,400
Restructuring charges		1,492				5,002
Other charges (income), net		317				773
Adjusted operating income		$90,953	(b)	16.5		$85,433	16.3

Note:
(b) Adjusted operating income increased 6% as compared to the same period in 2013.

METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)


	March 31, 2014		December 31, 2013

Cash and cash equivalents		$115,804		$111,874
Accounts receivable, net		425,161		466,703
Inventories		224,420		210,414
Other current assets and prepaid expenses		124,720		124,996
Total current assets		890,105		913,987

Property, plant and equipment, net		517,686		514,438
Goodwill and other intangibles assets, net		569,861		570,260
Other non-current assets		157,485		154,134
Total assets		$2,135,137		$2,152,819

Short-term borrowings and maturities of long-term debt		$16,255		$17,067
Trade accounts payable		119,128		145,993
Accrued and other current liabilities		373,812		401,128
Total current liabilities		509,195		564,188

Long-term debt		449,582		395,960
Other non-current liabilities		252,756		257,619
Total liabilities		1,211,533		1,217,767

Shareholders' equity		923,604		935,052
Total liabilities and shareholders' equity		$2,135,137		$2,152,819

METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)

	Three months ended
	March 31,
	2014	2013

Cash flow from operating activities:
Net earnings	$58,051	$52,544
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation	8,420	8,881
Amortization	7,094	5,122
Deferred tax benefit	(695)	(3,354)
Excess tax benefits from share-based payment arrangements	(4,495)	(256)
Other	3,238	2,831
Decrease in cash resulting from changes in
operating assets and liabilities	(28,768)	(42,096)
Net cash provided by operating activities	42,845	23,672

Cash flows from investing activities:
Proceeds from sale of property, plant and equipment	189	36
Purchase of property, plant and equipment	(16,716)	(19,018)
Acquisition	(391)	-
Net cash used in investing activities	(16,918)	(18,982)

Cash flows from financing activities:
Proceeds from borrowings	145,879	141,959
Repayments of borrowings	(93,229)	(89,334)
Proceeds from exercise of stock options	3,450	7,069
Excess tax benefits from share-based payment arrangements	4,495	256
Repurchases of common stock	(82,498)	(72,300)
Other financing activities	(235)	(483)
Net cash used in financing activities	(22,138)	(12,833)

Effect of exchange rate changes on cash and cash equivalents	141	(350)

Net increase (decrease) in cash and cash equivalents	3,930	(8,493)

Cash and cash equivalents:
Beginning of period	111,874	101,702
End of period	$115,804	$93,209


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

Net cash provided by operating activities	$42,845	$23,672
Excess tax benefits from share-based payment arrangements	4,495	256
Payments in respect of restructuring activities	3,141	4,646
Proceeds from sale of property, plant and equipment	189	36
Purchase of property, plant and equipment	(16,716)	(19,018)
Free cash flow	$33,954	$9,592

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 March 31, 2014	12%	2%		0%			5%

Local Currency Sales Growth
	Three Months Ended March 31, 2014	9%	3%		1%			4%



RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS
(unaudited)

			Three months ended
			March 31,
			2014			2013		% Growth

EPS as reported, diluted			$1.93			$1.69		14%

Restructuring charges, net of tax			0.04	(a)		0.12	(a)
Purchased intangible amortization, net of tax			0.03	(b)		0.03	(b)

Adjusted EPS, diluted			$2.00			$1.84		9%

Notes:
(a)	Represents the EPS impact of restructuring charges of $1.5 million ($1.1 million after tax) and $5.0 million ($3.8 million after tax) for the three months ended March 31, 2014 and 2013, respectively, which primarily include employee related costs.

(b)	Represents the EPS impact of purchased intangibles amortization, net of tax, of $0.9 million for both the three month periods ended March 31, 2014 and 2013.

SOURCE Mettler-Toledo International Inc.

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