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Mettler-Toledo International Inc. Reports Third Quarter 2020 Results

COLUMBUS, Ohio, Nov. 5, 2020 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced third quarter results for 2020.  Provided below are the highlights:

  • Reported sales increased 7% compared with the prior year.  In local currency, sales increased 6% in the quarter as currency benefited reported sales growth by 1%. 
  • Net earnings per diluted share as reported (EPS) were $6.68, compared with $5.20 in the prior-year period.  Adjusted EPS was $7.02, an increase of 22% over the prior-year amount of $5.77.  Adjusted EPS is a non-GAAP measure, and a reconciliation to EPS is included on the last page of the attached schedules. 

Quarterly Results

Olivier Filliol, President and Chief Executive Officer, stated, "Outstanding growth in China and strong growth in our Laboratory business resulted in excellent performance in the quarter despite negative impacts on our business from COVID-19. Our strong product portfolio combined with innovative sales and marketing strategies are yielding very good results despite the overall challenging environment. With the benefit of our temporary cost initiatives as well as ongoing margin and productivity initiatives, we had a strong increase in Adjusted Operating Profit margins and excellent growth in Adjusted EPS. Finally, cash flow generation was also very robust."

GAAP Results

EPS in the quarter was $6.68, compared with the prior-year amount of $5.20.  

Compared with the prior year, total reported sales increased 7% to $807.4 million.  By region, reported sales increased 2% in the Americas, 9% in Europe and 11% in Asia/Rest of World. Earnings before taxes amounted to $205.8 million, compared with $169.4 million in the prior year. 

Non-GAAP Results

Adjusted EPS was $7.02, an increase of 22% over the prior-year amount of $5.77.     

Compared with the prior year, total sales in local currency increased 6% as currency benefited sales growth by 1%.  By region, local currency sales increased 3% in the Americas, 4% in Europe and 10% in Asia/Rest of World.  Adjusted Operating Profit amounted to $230.0 million, a 17% increase from the prior-year amount of $196.2 million

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

Year-to-Date Results

GAAP Results

EPS was $15.92, compared with the prior-year amount of $14.67

Compared with the prior year, total reported sales decreased 1% to $2.147 billion.  By region, reported sales decreased 1% in the Americas and 1% in Europe and was constant in Asia/Rest of World.  Earnings before taxes amounted to $479.6 million, compared with $450.3 million in the prior year. 

Non-GAAP Results

Adjusted EPS was $16.30, compared with the prior-year amount of $15.02.     

Compared with the prior year, total sales in local currency was constant as currency reduced reported sales by 1%.  By region, local currency sales decreased 1% in the Americas and 2% in Europe and increased 1% in Asia/Rest of World.  Adjusted Operating Profit amounted to $547.9 million, a 5% increase from the prior-year amount of $521.8 million

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

Share Repurchase Authorization 

The Company has $0.9 billion remaining under the current authorization for the share repurchase program. The Company announced that the Board of Directors authorized an additional $2.5 billion to the share repurchase program.  Any amount remaining under the existing program will be incorporated into the new authorization.  Filliol commented, "The additional authorization allows us to continue the share repurchase program, which has provided strong returns for our shareholders over many years.  We are confident in our future growth prospects, and our balance sheet and cash flow generation remain very strong."  The Company expects the additional authorization will be utilized over the next several years.  The Company added that the repurchases will be made through open market transactions, and the amount and timing will depend on business and market conditions, stock price, trading restrictions, the level of acquisition activity and other factors. 

Outlook

The Company stated that forecasting continues to be challenging given the significant uncertainty surrounding COVID-19 and ensuing impact to the global economic environment. While the Company is providing an estimate for sales growth and Adjusted EPS for 2020 and 2021, management cautions that market dynamics and impacts related to COVID-19 are fluid and changes to the business environment can happen quickly. The estimates include significant uncertainty and management acknowledges that market conditions are subject to change. 

Based on today's assessment of market conditions, management anticipates the local currency sales growth in the fourth quarter 2020 will be in the range of 4% to 5%, and Adjusted EPS is forecasted to be in the range of $8.60 to $8.70, an increase of 11% to 12%.

For the full year 2020, local currency sales growth is expected to be approximately 1% and Adjusted EPS is forecasted to be $24.87 to $24.97, a growth rate of 9% to 10%.  This compares with previous guidance for Adjusted EPS of $22.70 to $23.20.

The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in 2021 to be in the range of 4% to 6%. This sales growth is expected to result in Adjusted EPS in the range of $27.50 to $28.30.  Using the mid-point of 2020 guidance, this would result in Adjusted EPS growth of 10% to 14%.

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. 

Conclusion

Filliol concluded, "The regional dynamics surrounding COVID-19 continue to change rapidly and the outlook for the global economy remains uncertain. We remain focused on factors we can control, namely ensuring the safety of our employees while serving our customers, the majority of which are in essential end markets including life sciences and food manufacturing. We continue to launch leading-edge instruments and services and have adapted our innovative digital sales and marketing approaches to ensure our go-to-market approach is highly effective given current market conditions. As we look to the remainder of 2020 and to 2021, we believe we will continue to gain share and deliver solid results. We will remain agile and adapt as necessary to changes in market conditions."

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, Nov 5) 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. You should not rely on forward-looking statements to predict our actual results. Our actual results or performance may be materially different than reflected in forward-looking statements because of various risks and uncertainties, including statements about expected revenue growth and long-term impacts of the COVID-19 pandemic. 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." We make forward-looking statements about future events or our future financial performance, including earnings and sales growth, earnings per share, strategic plans and contingency plans, growth opportunities or economic downturns, our ability to respond to changes in market conditions, customer demand, our competitive position, pricing, our supply chain, adequacy of our facilities, access to and the costs of raw materials, shipping and supplier costs, gross margins, planned research and development efforts and product introductions, capital expenditures, cash flow, tax-related matters, the impact of foreign currencies, compliance with laws, effects of acquisitions and the impact of the COVID-19 pandemic on our businesses. Our forward-looking statements may not be accurate or complete, and we do not intend to update or revise them in light of actual results. New risks also periodically arise. Please consider the risks and factors that could cause our results to differ materially from what is described in our forward-looking statements, including the uncertain duration and severity of the COVID-19 pandemic. See in particular "Factors Affecting Our Future Operating Results" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2019 and other reports filed with the SEC from time to time.

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)























Three months ended






Three months ended








September 30, 2020


% of sales


September 30, 2019


% of sales






















Net sales



$807,357


(a)


100.0





$753,866




100.0



Cost of sales



337,749




41.8





318,810




42.3



Gross profit



469,608




58.2





435,056




57.7























Research and development



34,656




4.3





36,015




4.8



Selling, general and administrative 



204,974




25.4





202,826




26.9



Amortization



14,121




1.7





12,329




1.6



Interest expense



9,310




1.2





9,800




1.3



Restructuring charges



4,570




0.6





6,732




0.9



Other charges (income), net



(3,832)




(0.5)





(2,005)




(0.3)



Earnings before taxes



205,809




25.5





169,359




22.5























Provision for taxes



44,042




5.5





39,964




5.3



Net earnings



$161,767




20.0





$129,395




17.2























Basic earnings per common share:



















Net earnings 



$6.76









$5.28







Weighted average number of common shares



23,922,272









24,487,268



























Diluted earnings per common share:



















Net earnings 



$6.68









$5.20







Weighted average number of common 



24,225,204









24,880,179







  and common equivalent shares







































Note:



















(a)

Local currency sales increased 6% as compared to the same period in 2019.























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT























Three months ended






Three months ended








September 30, 2020


% of sales


September 30, 2019


% of sales






















Earnings before taxes



$205,809









$169,359







Amortization



14,121









12,329







Interest expense



9,310









9,800







Restructuring charges



4,570









6,732







Other charges (income), net



(3,832)









(2,005)







Adjusted operating profit



$229,978


(b)


28.5





$196,215




26.0























Note:



















(b)

Adjusted operating profit increased 17% as compared to the same period in 2019.



 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)























Nine months ended






Nine months ended








September 30, 2020


% of sales


September 30, 2019


% of sales


















Net sales



$2,147,192


(a)


100.0





$2,164,684


(a)


100.0



Cost of sales



905,205




42.2





921,771




42.6



Gross profit



1,241,987




57.8





1,242,913




57.4























Research and development



100,236




4.7





108,650




5.0



Selling, general and administrative 



593,852




27.7





612,466




28.3



Amortization



42,008




2.0





36,877




1.7



Interest expense



29,111




1.3





27,776




1.3



Restructuring charges



7,335




0.3





11,146




0.5



Other charges (income), net



(10,118)




(0.5)





(4,253)




(0.2)



Earnings before taxes



479,563




22.3





450,251




20.8























Provision for taxes



93,119




4.3





81,891




3.8



Net earnings



$386,444




18.0





$368,360




17.0























Basic earnings per common share:



















Net earnings 



$16.13









$14.93







Weighted average number of common shares



23,963,311









24,677,546



























Diluted earnings per common share:



















Net earnings 



$15.92









$14.67







Weighted average number of common 



24,272,354









25,103,173







  and common equivalent shares







































Note:



















(a)

Local currency sales were flat compared to the same period in 2019.























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT























Nine months ended






Nine months ended








September 30, 2020


% of sales


September 30, 2019


% of sales






















Earnings before taxes



$479,563









$450,251







Amortization



42,008









36,877







Interest expense



29,111









27,776







Restructuring charges



7,335









11,146







Other charges (income), net



(10,118)









(4,253)







Adjusted operating profit



$547,899

(b)


25.5





$521,797




24.1























Note:



















(b)

Adjusted operating profit increased 5% as compared to the same period in 2019.



 

 


METTLER-TOLEDO INTERNATIONAL INC.


CONDENSED CONSOLIDATED BALANCE SHEETS


(amounts in thousands)


(unaudited)

























September 30, 2020



December 31, 2019












Cash and cash equivalents



$153,686





$207,785


Accounts receivable, net



521,777





566,256


Inventories



292,329





274,285


Other current assets and prepaid expenses



78,528





61,321


Total current assets



1,046,320





1,109,647













Property, plant and equipment, net



758,010





748,657


Goodwill and other intangibles assets, net



740,873





742,221


Other non-current assets



221,333





188,796


Total assets



$2,766,536





$2,789,321













Short-term borrowings and maturities of long-term debt



$55,111





$55,868


Trade accounts payable



146,646





185,592


Accrued and other current liabilities



562,324





513,052


Total current liabilities



764,081





754,512













Long-term debt



1,169,136





1,235,350


Other non-current liabilities



390,252





378,679


Total liabilities



2,323,469





2,368,541













Shareholders' equity



443,067





420,780


Total liabilities and shareholders' equity



$2,766,536





$2,789,321













 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)












Three months ended


Nine months ended



September 30,


September 30,



2020


2019


2020


2019










Cash flow from operating activities:








    Net earnings

$161,767


$129,395


$386,444


$368,360

    Adjustments to reconcile net earnings to








      net cash provided by operating activities:








Depreciation

10,622


9,958


30,949


29,348

Amortization

14,121


12,329


42,008


36,877

Deferred tax benefit

(2,420)


(3,082)


(6,990)


(17,963)

Other

4,430


4,465


13,248


13,255

Increase (decrease) in cash resulting from changes in








  operating assets and liabilities

36,559


22,811


8,171


(28,136)

                Net cash provided by operating activities

225,079


175,876


473,830


401,741










Cash flows from investing activities:








    Proceeds from sale of property, plant and equipment

1,021


32


3,046


1,248

    Purchase of property, plant and equipment

(20,339)


(26,928)


(57,428)


(71,627)

    Acquisitions

-


(1,500)


(6,242)


(2,004)

    Net hedging settlements on intercompany loans

(140)


(2,873)


(9,421)


(4,099)

                Net cash used in investing activities

(19,458)


(31,269)


(70,045)


(76,482)










Cash flows from financing activities:








    Proceeds from borrowings

72,262


168,881


1,148,360


807,711

    Repayments of borrowings

(63,066)


(128,066)


(1,231,191)


(660,795)

    Proceeds from exercise of stock options

8,444


159


26,194


37,916

    Repurchases of common stock 

(199,999)


(186,250)


(399,999)


(558,749)

    Acquisition contingent consideration payment

-


-


-


(10,000)

    Other financing activities

-


-


(800)


1,753

                Net cash used in financing activities

(182,359)


(145,276)


(457,436)


(382,164)










Effect of exchange rate changes on cash and cash equivalents

3,147


(3,236)


(448)


(671)










Net increase (decrease) in cash and cash equivalents

26,409


(3,905)


(54,099)


(57,576)










Cash and cash equivalents:








    Beginning of period

127,277


124,439


$207,785


178,110

    End of period

$153,686


$120,534


$153,686


$120,534



















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










Net cash provided by operating activities

$225,079


$175,876


$473,830


$401,741

    Payments in respect of restructuring activities

1,634


2,604


6,261


9,450

    Transition tax payment

4,264


-


4,264


4,289

    Proceeds from sale of property, plant and equipment

1,021


32


3,046


1,248

    Purchase of property, plant and equipment

(20,339)


(26,928)


(57,428)


(71,627)

Adjusted free cash flow

$211,659


$151,584


$429,973


$345,101










 

 

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 September 30, 2020



9%


2%


11%


7%




Nine Months Ended September 30, 2020



(1%)


(1%)


0%


(1%)
















Local Currency Sales Growth (Decrease)













Three Months Ended September 30, 2020



4%


3%


10%


6%




Nine Months Ended September 30, 2020



(2%)


(1%)


1%


0%





























RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 


(unaudited)

















Three months ended

Nine months ended



September 30,

September 30,



2020


2019


% Growth


2020


2019


% Growth














EPS as reported, diluted

$6.68


$5.20


28%


$15.92


$14.67


9%














Restructuring charges, net of tax

0.15

(a)

0.22

(a)



0.24

(a)

0.36

(a)


Purchased intangible amortization, net of tax

0.12

(b)

0.11

(b)



0.35

(b)

0.32

(b)


Income tax expense

0.07

(c)

0.24

(c)



(0.21)

(c)

(0.33)

(c)














Adjusted EPS, diluted

$7.02


$5.77


22%


$16.30


$15.02


9%














Notes:












(a)

Represents the EPS impact of restructuring charges of $4.6 million ($3.6 million after tax) and $6.7 million ($5.4 million after tax) for the three months ended September 30, 2020 and 2019, and $7.3 million ($5.8 million after tax) and $11.1 million ($8.9 million after tax) for the nine months ended September 30, 2020 and 2019, respectively, which primarily include employee related costs.

(b)

Represents the EPS impact of purchased intangibles amortization of $3.8 million ($2.8 million after tax) and $3.7 million ($2.8 million after tax) for the three months ended September 30, 2020 and 2019, and of $11.2 million ($8.5 million after tax) and $10.6 million ($8.0 million after tax) for the nine months ended September 30, 2020 and 2019, respectively.

(c)

Represents the EPS impact of the difference between our quarterly and estimated annual tax rate before non-recurring discrete items during the three and nine months ended September 30, 2020 and 2019 due to the timing of excess tax benefits associated with stock option exercises.

 

Cision View original content:http://www.prnewswire.com/news-releases/mettler-toledo-international-inc-reports-third-quarter-2020-results-301167507.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