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Mettler-Toledo International Inc. Reports Fourth Quarter 2019 Results

COLUMBUS, Ohio, Feb. 6, 2020 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results for 2019.  Provided below are the highlights:

  • Reported sales increased 3% compared with the prior year.  In local currency, sales increased 4% in the quarter as currency reduced sales growth by 1%.
  • Net earnings per diluted share as reported (EPS) were $7.84, compared with $7.11 in the prior-year period.  Adjusted EPS was $7.78, an increase of 14% over the prior-year amount of $6.85.  Adjusted EPS is a non-GAAP measure, and we have included a reconciliation to EPS on the last page of the attached schedules. 

Quarterly Results

Olivier Filliol, President and Chief Executive Officer, stated, "We had good sales growth in the quarter, particularly in light of the excellent growth in the prior year.  Sales growth was strong in the Americas and China.  With the benefit of our margin and productivity initiatives, we overcame meaningful currency and tariff headwinds to generate strong margin improvement and earnings growth in the quarter.  Finally, we had excellent cash flow generation in the quarter and for the full year."

GAAP Results
EPS in the quarter was $7.84, compared with the prior-year amount of $7.11.  EPS included a one-time, non-cash, deferred tax gain of $0.64, while prior year EPS included a one-time, non-cash, acquisition-related gain of $0.75.  

Compared with the prior year, total reported sales increased 3% to $844.0 million.  By region, reported sales increased 6% in the Americas and 4% in Asia/Rest of World.  Reported sales in Europe declined by 1%.  Earnings before taxes amounted to $231.1 million, compared with $230.5 million in the prior year.  Earnings before taxes in the prior year included a one-time, non-cash, acquisition-related gain of $18.7 million

Non-GAAP Results
Adjusted EPS was $7.78, an increase of 14% over the prior-year amount of $6.85.     

Compared with the prior year, total sales in local currency increased 4% as currency reduced reported sales growth by 1%.  By region, local currency sales increased 6% in the Americas, 1% in Europe and 5% in Asia/Rest of World.  Adjusted Operating Profit amounted to $256.3 million, a 7% increase from the prior-year amount of $239.7 million

Adjusted EPS and Adjusted Operating Profit are non-GAAP measures. Reconciliations to the most comparable GAAP measures are provided in the attached schedules.

Full Year Results

GAAP Results
EPS in 2019 was $22.47, compared with the prior-year amount of $19.88. EPS included a one-time, non-cash, deferred tax gain of $0.63, while prior year EPS included a one-time, non-cash, acquisition-related gain of $0.74

Compared with the prior year, total reported sales increased 2% in 2019 to $3.009 billion.  By region, reported sales increased 5% in the Americas and 3% in Asia/Rest of World.  Reported sales in Europe declined 2%.  Earnings before taxes amounted to $681.4 million, compared with $651.9 million in the prior year.  Earnings before taxes in the prior year included a one-time, non-cash, acquisition-related gain of $18.7 million

Non-GAAP Results
Adjusted EPS in 2019 was $22.77, an increase of 12% over the prior-year amount of $20.32.     

Compared with the prior year, total sales in local currency increased 5% as currency reduced reported sales growth by 3%.  By region, local currency sales increased 6% in the Americas, 3% in Europe and 6% in Asia/Rest of World.  Adjusted Operating Profit amounted to $778.1 million, a 7% increase from the prior-year amount of $730.5 million.

Adjusted EPS and Adjusted Operating Profit are non-GAAP measures. Reconciliations to the most comparable GAAP measures are provided in the attached schedules.

Outlook

The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in 2020 will be approximately 4%.  This sales growth is expected to result in Adjusted EPS in the range of $24.85 to $25.10, a growth rate of 9% to 10%.  Management noted that local currency sales growth and Adjusted EPS guidance remains unchanged from previous guidance.    

Management noted that they will face tough comparisons in the first quarter 2020 due to strong sales in the prior-year quarter and will face strong headwinds to Adjusted EPS due to adverse currency and the impact of tariff costs in the first quarter.  In addition, based on today's assessment, the Company expects a significant impact on its China sales in the first quarter due to the Wuhan Coronavirus.

Based on market conditions today, the Company anticipates that local currency sales growth in the first quarter 2020 will be approximately 0% to 1%, and Adjusted EPS is forecasted to be in the range of $4.20 to $4.30, an increase of 2% to 5%. 

While the Company has provided an outlook for local currency sales growth and Adjusted EPS, it has not provided an outlook for reported sales growth or EPS as it would require an estimate of currency exchange fluctuations and non-recurring items, which are not yet known.  The Company noted in making its outlook that uncertainty remains in the macroeconomic environment and market conditions are subject to change.   

Conclusion

Filliol concluded, "Demand in our markets remains solid with the exception of Food Retail and the potential short-term impact of the Wuhan Coronavirus.  We continue to invest for growth via our investments in our field force, Spinnaker sales and marketing programs and new product development.  We remain confident in executing on our growth, productivity and margin initiatives.  We will monitor the macroeconomic environment as uncertainty exists in certain regions of the world, and remain agile and adapt if market conditions change.  Based on market conditions today, we believe we can continue to gain share and deliver strong results in 2020."

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, February 6) 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 10-K.  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





December 31, 2019


% of sales


December 31, 2018


% of sales










Net sales


$843,969

(a)

100.0


$817,923


100.0

Cost of sales


345,672


41.0


340,357


41.6

Gross profit


498,297


59.0


477,566


58.4










Research and development


35,299


4.2


36,205


4.4

Selling, general and administrative 


206,717


24.5


201,653


24.7

Amortization


12,813


1.5


11,963


1.5

Interest expense


9,635


1.1


8,840


1.1

Restructuring charges


4,614


0.5


4,464


0.5

Other charges (income), net


(1,924)


(0.3)


(16,013)

(c)

(2.0)

Earnings before taxes


231,143


27.3


230,454


28.2










Provision for taxes


38,394

(b)

4.5


49,268

(b)

6.0

Net earnings


$192,749


22.8


$181,186


22.2










Basic earnings per common share:









Net earnings 


$7.95




$7.25



Weighted average number of common shares


24,241,383




24,975,303












Diluted earnings per common share:









Net earnings 


$7.84




$7.11



Weighted average number of common 


24,599,702




25,490,270



  and common equivalent shares


















Note:









(a) Local currency sales increased 4% as compared to the same period in 2018.

(b) Provision for taxes includes a non-cash deferred net benefit of $15.8 million for the three months ended December 31, 2019 related to the enactment of Swiss tax reform and a charge of $3.6 million for the three months ended December 31, 2018 for the enactment of the U.S. Tax Cuts and Jobs Act.

(c) Other charges (income), net includes a one-time gain of $18.7 million relating to the Biotix acquisition contingent consideration and a one-time legal charge of $3.0 million for the three months ended December 31, 2018.











RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT












Three months ended




Three months ended





December 31, 2019


% of sales


December 31, 2018


% of sales










Earnings before taxes


$231,143




$230,454



Amortization


12,813




11,963



Interest expense


9,635




8,840



Restructuring charges


4,614




4,464



Other charges (income), net


(1,924)




(16,013)



Adjusted operating profit


$256,281

(d)

30.4


$239,708


29.3










Note:









(d) Adjusted operating profit increased 7% as compared to the same period in 2018.

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)













Twelve months ended




Twelve months ended






December 31, 2019


% of sales


December 31, 2018


% of sales












Net sales


$3,008,652

(a)

100.0


$2,935,586


100.0


Cost of sales


1,267,441


42.1


1,251,208


42.6


Gross profit


1,741,211


57.9


1,684,378


57.4












Research and development


143,950


4.8


141,071


4.8


Selling, general and administrative


819,183


27.2


812,802


27.7


Amortization


49,690


1.7


47,524


1.6


Interest expense


37,411


1.2


34,511


1.2


Restructuring charges


15,760


0.5


18,420


0.6


Other charges (income), net


(6,177)


(0.3)


(21,808)

(c)

(0.7)


Earnings before taxes


681,394


22.6


651,858


22.2












Provision for taxes


120,285

(b)

4.0


139,247

(b)

4.7


Net earnings


$561,109


18.6


$512,611


17.5












Basic earnings per common share:










Net earnings


$22.84




$20.33




Weighted average number of common shares


24,567,609




25,215,674














Diluted earnings per common share:










Net earnings


$22.47




$19.88




Weighted average number of common


24,974,457




25,781,324




  and common equivalent shares




















Note:










(a) Local currency sales increased 5% as compared to the same period in 2018.

(b) Provision for taxes includes a non-cash deferred net benefit of $15.8 million for twelve months ended December 31, 2019 related to the enactment of Swiss tax reform and a charge of $3.6 million for the twelve months ended December 31, 2018 for the enactment of the U.S. Tax Cuts and Jobs Act.

(c) Other charges (income), net includes a one-time gain of $18.7 million relating to the Biotix acquisition contingent consideration and a one-time legal charge of $3.0 million for the twelve months ended December 31, 2018.


RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT













Twelve months ended




Twelve months ended






December 31, 2019


% of sales


December 31, 2018


% of sales












Earnings before taxes


$681,394




$651,858




Amortization


49,690




47,524




Interest expense


37,411




34,511




Restructuring charges


15,760




18,420




Other charges (income), net


(6,177)




(21,808)




Adjusted operating profit


$778,078

(d)

25.9


$730,505


24.9












Note:










(d) Adjusted operating profit increased 7% as compared to the same period in 2018.


 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)






December 31, 2019


December 31, 2018





Cash and cash equivalents

$207,785


$178,110

Accounts receivable, net

566,256


535,528

Inventories

274,285


268,821

Other current assets and prepaid expenses

61,321


63,401

Total current assets

1,109,647


1,045,860





Property, plant and equipment, net

748,657


717,526

Goodwill and other intangibles assets, net

742,221


752,088

Other non-current assets

188,796

(a)

103,373

Total assets

$2,789,321


$2,618,847





Short-term borrowings and maturities of long-term debt

$55,868


$49,670

Trade accounts payable

185,592


196,641

Accrued and other current liabilities

513,052

(a)

488,123

Total current liabilities

754,512


734,434





Long-term debt

1,235,350


985,021

Other non-current liabilities

378,679

(a)

309,329

Total liabilities

2,368,541


2,028,784





Shareholders' equity

420,780


590,063

Total liabilities and shareholders' equity

$2,789,321


$2,618,847


(a) Includes a lease right-of-use asset of $87.3 million, a short-term lease liability of $27.6 million and a long-term lease liability of $60.9 million in accordance with ASC 842 "Leases" that went into effect on January 1, 2019.


 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)



Three months ended


Twelve months ended


December 31,


December 31,


2019


2018


2019


2018









Cash flow from operating activities:








    Net earnings

$192,749


$181,186


$561,109


$512,611

    Adjustments to reconcile net earnings to








     net cash provided by operating activities:








  Depreciation

9,643


9,278


38,991


37,167

  Amortization

12,813


11,963


49,690


47,524

  Deferred tax expense

29,166


14,203


11,203


2,302

  Share-based compensation

5,002


5,074


18,285


17,579

  Swiss tax reform benefit (a)

(15,833)


-


(15,833)


-

  U.S. tax reform charge (b)

-


3,597


-


3,597

  Acquisition gain (c)

-


(18,674)


-


(18,674)

  Other

161


147


133


(2,559)

Decrease in cash resulting from changes in








  operating assets and liabilities

(31,992)


(8,202)


(60,128)


(34,542)

                Net cash provided by operating activities

201,709


198,572


603,450


565,005










Cash flows from investing activities:








    Proceeds from sale of property, plant and equipment

174


381


1,422


8,190

    Purchase of property, plant and equipment

(25,714)


(46,061)


(97,341)


(142,726)

    Acquisitions

-


(565)


(2,004)


(5,527)

    Net hedging settlements on intercompany loans

2,939


1,899


(1,160)


1,119

                Net cash used in investing activities

(22,601)


(44,346)


(99,083)


(138,944)










Cash flows from financing activities:








    Proceeds from borrowings

627,370


168,341


1,435,081


940,615

    Repayments of borrowings

(515,989)


(172,620)


(1,176,784)


(876,324)

    Proceeds from exercise of stock options

9,665


9,823


47,581


24,600

    Repurchases of common stock 

(216,249)


(118,750)


(774,999)


(474,999)

    Acquisition contingent consideration payment

-


-


(10,000)


-

    Other financing activities

-


(250)


1,753


(1,914)

                Net cash used in financing activities

(95,203)


(113,456)


(477,368)


(388,022)










Effect of exchange rate changes on cash and cash equivalents

3,348


(108)


2,676


(8,616)










Net increase in cash and cash equivalents

87,253


40,662


29,675


29,423










Cash and cash equivalents:








    Beginning of period

120,534


137,448


$178,110


148,687

    End of period

$207,787


$178,110


$207,785


$178,110










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










Net cash provided by operating activities

$201,709


$198,572


$603,450


$565,005

    Payments in respect of restructuring activities

7,033


4,119


16,483


20,820

    Proceeds from sale of property, plant and equipment

174


381


1,422


8,190

    Purchase of property, plant and equipment

(25,714)


(46,061)


(97,341)


(142,726)

    Payments for one-time legal charge (d)

2,992


-


2,992


-

    Transition tax payments

-


-


4,289


4,200

    Payments for acquisition costs

-


233


-


375

Adjusted free cash flow

$186,194


$157,244


$531,295


$455,864









(a) Represents a non-cash deferred net benefit of $15.8 million for the three and twelve months ended December 31, 2019 related to the enactment of Swiss tax reform.

(b) Represents U.S. tax reform charge of $3.6 million for the three and twelve months ended December 31, 2018 for the implementation of the Tax Cuts and Jobs Act.

(c) Represents a one-time gain of $18.7 million relating to the Biotix acquisition contingent consideration for the three and twelve months ended December 31, 2018.

(d) Represents cash payments related to the one-time legal charge recorded during the three months ended December 31, 2018.

 

 

METTLER-TOLEDO INTERNATIONAL INC.


OTHER OPERATING STATISTICS




























SALES GROWTH BY DESTINATION


(unaudited)



















Europe


Americas


Asia/RoW

Total
















U.S. Dollar Sales Growth (Decrease)













Three Months Ended December 31, 2019



(1%)


6%


4%


3%




Twelve Months Ended December 31, 2019



(2%)


5%


3%


2%
















Local Currency Sales Growth (Decrease)













Three Months Ended December 31, 2019



1%


6%


5%


4%




Twelve Months Ended December 31, 2019



3%


6%


6%


5%





























RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 


(unaudited)

















Three months ended


Twelve months ended



December 31,


December 31,



2019


2018


% Growth


2019


2018


% Growth














EPS as reported, diluted

$7.84


$7.11


10%


$22.47


$19.88


13%














Restructuring charges, net of tax

0.15

(a)

0.14

(a)



0.50

(a)

0.56

(a)


Purchased intangible amortization, net of tax

0.11

(b)

0.10

(b)



0.43

(b)

0.39

(b)


Income tax expense

0.32

(c)

0.02

(c)



-


-



Swiss Tax reform

(0.64)

(d)

-




(0.63)

(d)

-



U.S. Tax reform

-


0.14

(e)



-


0.14

(e)


Acquisition gain, net of tax

-


(0.75)

(f)



-


(0.74)

(f)


Legal charge, net of tax

-


0.09

(g)



-


0.09

(g)


Adjusted EPS, diluted

$7.78


$6.85


14%


$22.77


$20.32


12%














Notes:














(a)

Represents the EPS impact of restructuring charges of $4.6 million ($3.7 million after tax) and $4.5 million ($3.5 million after tax) for the three months
ended December 31, 2019 and 2018, and $15.8 million ($12.6 million after tax) and $18.4 million ($14.5 million after tax) for the twelve months ended
December 31, 2019 and 2018, respectively, which primarily include employee related costs.

(b)

Represents the EPS impact of purchased intangibles amortization, net of tax, of $3.8 million ($2.8 million after tax) and $3.3 million ($2.5 million after
tax) for the three months ended December 31, 2019 and 2018, and $14.3 million ($10.8 million after tax) and $13.3 million ($10.0 million after tax) for
the twelve months ended December 31, 2019 and 2018, respectively.

(c)

Represents the EPS impact of the difference between our reported and annual tax rate before non-recurring discrete items, due to the timing of excess
tax benefits associated with stock option exercises. 

(d)

Represents the EPS impact of a non-cash deferred net benefit of $15.8 million related to the enactment of Swiss tax reform for the three and twelve
months ended December 31, 2019.

(e)

Represents the EPS impact of U.S. tax reform charges of $3.6 million for the three and twelve months ended December 31, 2018, related to the
implementation of the Tax Cuts and Jobs Act.

(f)

Represents the EPS impact of a one-time gain of $18.7 million ($19.2 million after tax) for the three and twelve months ended December 31, 2018
associated with the Biotix acquisition contingent consideration. 

(g)

Represents the EPS impact of a one-time legal charge of $3.0 million ($2.4 million after tax) for the three and twelve months ended December 31, 2018.

 

Cision View original content:http://www.prnewswire.com/news-releases/mettler-toledo-international-inc-reports-fourth-quarter-2019-results-301000652.html

SOURCE Mettler-Toledo International Inc.

Mary T. Finnegan, Treasurer, Investor Relations, Mettler-Toledo International Inc., +1-614-438-4748, Fax: +1-614-438-4646