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Mettler-Toledo International Inc. Reports Second Quarter 2016 Results
- - Strong Sales Growth - -
- - Strong Margin Improvement and EPS Growth - -

COLUMBUS, Ohio, July 28, 2016 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2016.  Provided below are the highlights:

  • Sales in local currency increased 6% in the quarter compared with the prior year.  Reported sales increased 5% as currency reduced sales growth by 1% in the quarter.
  • Net earnings per diluted share as reported (EPS) were $2.93, compared with $2.73 in the prior-year period.  Adjusted EPS was $3.22, an increase of 15% over the prior-year amount of $2.80.  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, "Sales growth in the quarter was strong as we continued to have good demand in the Americas and very good growth in Asia / Rest of World, including China.  Europe growth was solid.  We improved gross and operating margins which contributed to an excellent growth in EPS.  Finally, cash flow in the quarter was strong." 

EPS in the quarter was $2.93, compared with the prior-year amount of $2.73.  Adjusted EPS was $3.22, an increase of 15% over the prior-year amount of $2.80.  

Sales were $608.3 million, a 6% increase in local currency sales, compared with $582.1 million in the prior-year quarter.  Reported sales increased 5% as currency reduced sales growth by 1% in the quarter.  As compared to the prior year, local currency sales increased 6% in the Americas, 4% in Europe and 8% in Asia / Rest of World.  Adjusted operating income amounted to $129.1 million, a 9% increase from the prior-year amount of $118.3 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 $115.5 million, compared with $105.2 million in the prior-year quarter.

Six Month Results

EPS for the six months was $5.32, compared with the prior-year amount of $4.91. Adjusted EPS was $5.68, an increase of 12% over the prior-year amount of $5.05.

Sales were $1.148 billion, a 5% increase in local currency sales, compared with $1.118 billion in the prior-year period. Reported sales increased 3%, as currency reduced sales growth by 2% in the period. By region, local currency sales increased 6% in the Americas, 2% in Europe and 6% in Asia / Rest of World as compared to the prior-year period. Adjusted operating income amounted to $231.1 million, a 7% increase from the prior-year period amount of $215.6 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 $151.2 million, compared with $163.8 million in the prior-year period.

Acquisition to Expand Secondary Brand Offering and Market Position in Weight Calibration

The Company announced that it intends to complete the acquisition of Henry Troemner, LLC ("Troemner"), a leading supplier of lab equipment, weights and weight calibration, in the third quarter of 2016.  The Company stated that the acquisition will expand the offering of basic lab products which are sold through indirect distribution under the Company's secondary brand, Ohaus.  In addition, the Company will become a global leader in weights and weight calibration through the combination of Troemner's U.S.-based business with the Company's European business.  Troemner is based in the Philadelphia area.         

Outlook 

The Company updated its outlook for 2016 and noted that forecasting remains challenging.  The Company also noted that the updated outlook includes the estimated impact of the Troemner acquisition.    

Based on today's assessment, management anticipates that local currency sales growth in 2016 will be in approximately 5% and Adjusted EPS is forecasted to be in the range of $14.40 to $14.50, an increase of 11% to 12%.  This compares to previous guidance of local currency sales growth of approximately 4% and Adjusted EPS in the range of $14.25 to $14.35.    

For the third quarter 2016, management anticipates that local currency sales growth will be in the range of 5% to 6% and Adjusted EPS is forecasted to be in the range of $3.65 to $3.70, an increase of 12% to 13%. 

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 saw improved momentum in our business during the quarter but our outlook for the rest of the year remains cautious given the uncertainty in the global economy.  While we are guarded about economic factors that are outside our control, we are very encouraged with factors within our control – namely our strategic initiatives and ability to execute them.  Specifically, our new product introductions, Field Turbo investments, Spinnaker sales and marketing programs and various productivity improvement measures are yielding tangible results.  With strong execution, we believe we can continue to gain share."    

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, July 28) 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










June 30, 2016



% of sales


June 30, 2015



% of sales



































Net sales



$608,286


(a)


100.0



$582,057




100.0




Cost of sales



260,710




42.9



259,145




44.5




Gross profit



347,576




57.1



322,912




55.5






















Research and development



30,701




5.0



29,794




5.1




Selling, general and administrative 



187,798




30.9



174,808




30.1




Amortization



8,655




1.4



7,634




1.3




Interest expense



6,872




1.1



6,942




1.2




Restructuring charges



2,205




0.4



1,720




0.3




Other charges (income), net



8,173




1.3



(33)




0.0




Earnings before taxes



103,172




17.0



102,047




17.5






















Provision for taxes



23,584




3.9



24,490




4.2




Net earnings



$79,588




13.1



$77,557




13.3






















Basic earnings per common share:


















Net earnings 



$2.99







$2.79








Weighted average number of common shares



26,631,015







27,843,905



























Diluted earnings per common share:


















Net earnings 



$2.93







$2.73








Weighted average number of common 



27,143,284







28,460,336








  and common equivalent shares





































Note:


















(a)   Local currency sales increased 6% as compared to the same period in 2015.










































RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

























Three months ended







Three months ended











June 30, 2016



% of sales


June 30, 2015



% of sales






















Earnings before taxes



$103,172







$102,047








Amortization



8,655







7,634








Interest expense



6,872







6,942








Restructuring charges



2,205







1,720








Other charges (income), net



8,173


(b)





(33)








Adjusted operating income 



$129,077


(c)


21.2



$118,310




20.3























Note:


















(b)   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.




(c)   Adjusted operating income increased 9% as compared to the same period in 2015.




 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)






















Six months ended








Six months ended









June 30, 2016



% of sales



June 30, 2015


% of sales


































Net sales



$1,147,960


(a)


100.0




$1,117,758



100.0



Cost of sales



500,477




43.6




496,041



44.4



Gross profit



647,483




56.4




621,717



55.6





















Research and development



59,674




5.2




58,255



5.2



Selling, general and administrative 



356,719




31.1




347,846



31.1



Amortization



17,079




1.5




15,162



1.4



Interest expense



13,452




1.2




13,667



1.2



Restructuring charges



3,085




0.2




2,627



0.2



Other charges (income), net



7,889




0.7




(850)



(0.1)



Earnings before taxes



189,585




16.5




185,010



16.6





















Provision for taxes



44,323




3.8




44,402



4.0



Net earnings



$145,262




12.7




$140,608



12.6





















Basic earnings per common share:

















Net earnings 



$5.42








$5.03






Weighted average number of common shares



26,781,154








27,978,814
























Diluted earnings per common share:

















Net earnings 



$5.32








$4.91






Weighted average number of common 



27,283,012








28,611,637






  and common equivalent shares



































Note:

















(a)  Local currency sales increased 5% as compared to the same period in 2015.

























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME






















Six months ended








Six months ended









June 30, 2016



% of sales



June 30, 2015


% of sales




















Earnings before taxes



$189,585








$185,010






Amortization



17,079








15,162






Interest expense



13,452








13,667






Restructuring charges



3,085








2,627






Other charges (income), net



7,889


(b)






(850)






Adjusted operating income 



$231,090


(c)


20.1




$215,616



19.3





















Note:

















(b)  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.



(c)  Adjusted operating income increased 7% as compared to the same period in 2015.



 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)























June 30, 2016



December 31, 2015











Cash and cash equivalents



$114,646





$98,887


Accounts receivable, net



407,972





411,420


Inventories



234,006





214,383


Other current assets and prepaid expenses



143,636





138,125


Total current assets



900,260





862,815












Property, plant and equipment, net



514,312





517,229


Goodwill and other intangible assets, net



558,280





561,536


Other non-current assets



88,895





75,059


Total assets



$2,061,747





$2,016,639












Short-term borrowings and maturities of long-term debt



$20,945





$14,488


Trade accounts payable



131,888





142,075


Accrued and other current liabilities



438,275





438,564


Total current liabilities



591,108





595,127












Long-term debt



693,263





575,138


Other non-current liabilities



285,414





265,917


Total liabilities



1,569,785





1,436,182












Shareholders' equity



491,962





580,457


Total liabilities and shareholders' equity



$2,061,747





$2,016,639












 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)














Three months ended


Six months ended




June 30,


June 30,




2016


2015


2016


2015











Cash flow from operating activities:









    Net earnings


$        79,588


$        77,557


$      145,262


$      140,608

    Adjustments to reconcile net earnings to









      net cash provided by operating activities:









Depreciation


7,994


8,357


16,116


16,658

Amortization


8,655


7,634


17,079


15,162

Deferred tax benefit


(5,548)


(1,011)


(8,852)


(2,681)

Excess tax benefits from share-based payment arrangements

(5,347)


(837)


(11,152)


(1,278)

Non-cash pension settlement charge


8,189


-


8,189


-

Other


3,569


3,590


7,148


7,070

Increase (decrease) in cash resulting from changes in









  operating assets and liabilities


18,425


9,899


(22,565)


(11,754)

                Net cash provided by operating activities


115,525


105,189


151,225


163,785











Cash flows from investing activities:









    Proceeds from sale of property, plant and equipment


83


85


218


127

    Purchase of property, plant and equipment


(14,510)


(17,384)


(28,858)


(35,923)

    Acquisitions


-


(100)


(4,329)


(300)

    Net hedging settlements on intercompany loans


(1,053)


(4,427)


1,075


(12,811)

                Net cash used in investing activities


(15,480)


(21,826)


(31,894)


(48,907)











Cash flows from financing activities:









    Proceeds from borrowings


163,147


342,454


392,560


493,450

    Repayments of borrowings


(145,217)


(236,437)


(269,684)


(313,923)

    Proceeds from exercise of stock options


8,056


8,192


13,965


17,738

    Excess tax benefits from share-based payment arrangements


5,347


837


11,152


1,278

    Repurchases of common stock 


(124,997)


(123,728)


(249,997)


(247,473)

   Other financing activities


(555)


(854)


(680)


(854)

                Net cash used in financing activities


(94,219)


(9,536)


(102,684)


(49,784)











Effect of exchange rate changes on cash and cash equivalents


(1,775)


123


(888)


(1,048)











Net increase (decrease) in cash and cash equivalents


4,051


73,950


15,759


64,046











Cash and cash equivalents:









    Beginning of period


110,595


75,359


98,887


85,263

    End of period


$      114,646


$      149,309


$      114,646


$      149,309





















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











Net cash provided by operating activities


$      115,525


$      105,189


$      151,225


$      163,785

    Excess tax benefits from share-based payment arrangements


5,347


837


11,152


1,278

    Payments in respect of restructuring activities


2,461


1,216


4,302


2,022

    Proceeds from sale of property, plant and equipment


83


85


218


127

    Purchase of property, plant and equipment


(14,510)


(17,384)


(28,858)


(35,923)

Free cash flow


$      108,906


$        89,943


$      138,039


$      131,289

 

 

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 June 30, 2016



5%


5%


4%


5%




Six Months Ended June 30, 2016



2%


5%


1%


3%
















Local Currency Sales Growth













Three Months Ended June 30, 2016



4%


6%


8%


6%




Six Months Ended June 30, 2016



2%


6%


6%


5%





























RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)
















Three months ended 


Six months ended



June 30,


June 30,



2016


2015


% Growth


2016


2015


% Growth














EPS as reported, diluted

$2.93


$2.73


7%


$5.32


$4.91


8%














Restructuring charges, net of tax

0.06

(a)

0.04

(a)



0.09

(a)

0.07

(a)


Purchased intangible amortization, net of tax

0.04

(b)

0.03

(b)



0.08

(b)

0.07

(b)


Non-cash pension settlement charge, net of tax

0.19

(c)

0.00




0.19

(c)

0.00
















Adjusted EPS, diluted

$3.22


$2.80


15%


$5.68


$5.05


12%














Notes:












(a)   Represents the EPS impact of restructuring charges of $2.2 million ($1.7 million after tax) and $1.7 million ($1.3 million after tax) for the three months ended June 30, 2016 and 2015, and $3.1 million ($2.3 million after tax) and $2.6 million ($2.0 million after tax) for the six months ended June 30, 2016 and 2015, respectively, which primarily include employee related costs.



(b)  Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.0 million and $0.9 million for the three months ended June 30, 2016 and 2015, and $2.1 million and $1.9 million for the six months ended June 30, 2016 and 2015, respectively.


(c)   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 three and six months ended June 30, 2016.

 

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SOURCE Mettler-Toledo International Inc.

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