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Mettler-Toledo International Inc. Reports Second Quarter 2017 Results
- - Very Strong Sales Growth - -
- - Further Margin Expansion and Excellent EPS Growth - -

COLUMBUS, Ohio, July 27, 2017 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2017.  Provided below are the highlights:

  • Sales in local currency increased 10% in the quarter compared with the prior year. Reported sales increased 7% as currency reduced sales growth by 3% in the quarter.
  • Net earnings per diluted share as reported (EPS) were $3.84, compared with $2.93 in the prior-year period. Adjusted EPS was $3.92, an increase of 22% over the prior-year amount of $3.22. Adjusted EPS is a non-GAAP measure and we have included a reconciliation to EPS 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 very strong with excellent growth in Asia/Rest of World and the Americas.  We continue to benefit from our productivity and margin initiatives which contributed to further margin expansion and excellent growth in EPS." 

EPS in the quarter was $3.84, compared with the prior-year amount of $2.93.  Adjusted EPS was $3.92, an increase of 22% over the prior-year amount of $3.22.  

Sales were $653.7 million, a 10% increase in local currency sales, compared with $608.3 million in the prior-year quarter.  Reported sales increased 7% as currency reduced sales growth by 3% in the quarter.  As compared to the prior year, local currency sales increased 10% in the Americas, 4% in Europe and 15% in Asia/Rest of World.  Adjusted operating income amounted to $148.5 million, a 15% increase from the prior-year amount of $129.1 million.  Adjusted operating income is a non-GAAP measure, and a reconciliation to earnings before taxes is provided in the attached schedules.

Six Month Results

EPS for the six months was $7.32, compared with the prior-year amount of $5.32.  Adjusted EPS was $7.25, an increase of 28% over the prior-year amount of $5.68.  

Sales were $1.248 billion, an 11% increase in local currency sales, compared with $1.148 billion in the prior-year period.  Reported sales increased 9% as currency reduced sales growth by 2% in the period.  As compared to the prior year, local currency sales increased 12% in the Americas, 8% in Europe and 12% in Asia/Rest of World.  Adjusted operating income amounted to $275.9 million, a 19% increase from the prior-year amount of $231.1 million.  Adjusted operating income is a non-GAAP measure, and a reconciliation to earnings before taxes is 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 2017 will be approximately 8%.  This sales growth is expected to result in Adjusted EPS in the range of $17.25 to $17.35, an increase of 17%.  This compares to previous guidance of Adjusted EPS in the range of $16.95 to $17.15

For the third quarter 2017, local currency sales growth is expected to be approximately 5% and Adjusted EPS in the range of $4.25 to $4.30, an increase of 9% to 11%. 

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.  The Company noted in making its outlook that economic uncertainty remains in certain regions of the world and market conditions are subject to change.   

Conclusion

Filliol concluded, "Our operating results for the last several quarters have been excellent.  Our Field Turbo investments, Spinnaker sales and marketing initiatives and new product launches are yielding tangible results and we continue to further our margin and productivity initiatives.  We will face more challenging comparisons for the remainder of the year but with continued strong execution, we believe we can continue to gain share and deliver a strong performance in 2017."    

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, July 27) 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 (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 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, 2017


% of sales



June 30, 2016


% of sales





















Net sales



$653,656


(a)


100.0





$608,286




100.0



Cost of sales



278,739




42.6





260,710




42.9



Gross profit



374,917




57.4





347,576




57.1






















Research and development



32,854




5.0





30,701




5.0



Selling, general and administrative 



193,517




29.6





187,798




30.9



Amortization



10,249




1.6





8,655




1.4



Interest expense



8,171




1.3





6,872




1.1



Restructuring charges



4,023




0.6





2,205




0.4



Other charges (income), net



(744)




(0.1)





8,173




1.3



Earnings before taxes



126,847




19.4





103,172




17.0






















Provision for taxes



25,267




3.9





23,584




3.9



Net earnings



$101,580




15.5





$79,588




13.1






















Basic earnings per common share:



















Net earnings 



$3.94









$2.99







Weighted average number of common shares


25,751,374









26,631,015


























Diluted earnings per common share:



















Net earnings 



$3.84









$2.93







Weighted average number of common 



26,439,529









27,143,284







  and common equivalent shares






































Note:



















(a)     Local currency sales increased 10% as compared to the same period in 2016.



























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME























Three months ended







Three months ended









June 30, 2017


% of sales



June 30, 2016


% of sales





















Earnings before taxes



$126,847









$103,172







     Amortization



10,249









8,655







     Interest expense



8,171









6,872







     Restructuring charges



4,023









2,205







     Other charges (income), net



(744)









8,173


(c)





Adjusted operating income 



$148,546


(b)


22.7





$129,077




21.2






















Note:



















(b)     Adjusted operating income increased 15% as compared to the same period in 2016.



(c)     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 for the three months ended June 30, 2016.



 

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)























Six months ended







Six months ended










June 30, 2017


% of sales



June 30, 2016


% of sales


















Net sales



$1,248,223


(a)


100.0





$1,147,960




100.0



Cost of sales



530,406




42.5





500,477




43.6



Gross profit



717,817




57.5





647,483




56.4























Research and development



64,246




5.1





59,674




5.2



Selling, general and administrative 



377,689




30.3





356,719




31.1



Amortization



20,294




1.6





17,079




1.5



Interest expense



15,912




1.3





13,452




1.2



Restructuring charges



5,455




0.4





3,085




0.2



Other charges (income), net



(6,474)




(0.5)





7,889




0.7



Earnings before taxes



240,695




19.3





189,585




16.5























Provision for taxes



46,649




3.8





44,323




3.8



Net earnings



$194,046




15.5





$145,262




12.7























Basic earnings per common share:



















Net earnings 



$7.51









$5.42







Weighted average number of common shares


25,841,243









26,781,154



























Diluted earnings per common share:



















Net earnings 



$7.32









$5.32







Weighted average number of common 



26,514,311









27,283,012







  and common equivalent shares







































Note:



















(a)     Local currency sales increased 11% as compared to the same period in 2016.



























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME























Six months ended







Six months ended










June 30, 2017


% of sales



June 30, 2016


% of sales






















Earnings before taxes



$240,695









$189,585







     Amortization



20,294









17,079







     Interest expense



15,912









13,452







     Restructuring charges



5,455









3,085







     Other charges (income), net



(6,474)


(b)







7,889


(d)





Adjusted operating income 



$275,882


(c)


22.1





$231,090




20.1























Note:



















(b)     Other charges (income), net includes a one-time gain of $3.4 million for the six months ended June 30, 2017 relating to the 
          sale of a facility in Switzerland in connection with our initiative to consolidate certain Swiss operations into a new facility.

(c)     Adjusted operating income increased 19% as compared to the same period in 2016.



(d)     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 for the six months ended June 30, 2016.

 

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)























June 30, 2017



December 31, 2016











Cash and cash equivalents



$146,334





$158,674


Accounts receivable, net



448,098





454,988


Inventories



253,734





222,047


Other current assets and prepaid expenses



65,587





61,075


Total current assets



913,753





896,784












Property, plant and equipment, net



600,900





563,707


Goodwill and other intangibles assets, net



647,891





643,433


Other non-current assets



85,406





62,853


Total assets



$2,247,950





$2,166,777












Short-term borrowings and maturities of long-term debt


$21,608





$18,974


Trade accounts payable



143,607





146,593


Accrued and other current liabilities



423,594





421,948


Total current liabilities



588,809





587,515












Long-term debt



947,781





875,056


Other non-current liabilities



249,441





269,263


Total liabilities



1,786,031





1,731,834












Shareholders' equity



461,919





434,943


Total liabilities and shareholders' equity



$2,247,950





$2,166,777


 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)
















Three months ended


Six months ended





June 30,


June 30,





2017


2016


2017


2016












Cash flow from operating activities:









    Net earnings


$101,580


$79,588


$194,046


$145,262

    Adjustments to reconcile net earnings to









      net cash provided by operating activities:









         Depreciation


7,953


7,994


15,919


16,116

         Amortization


10,249


8,655


20,294


17,079

         Deferred tax benefit


(2,264)


(5,548)


(3,840)


(8,852)

      Other


4,211


3,569


8,023


7,148

      Gain on facility sale


-


-


(3,394)


-

      Non-cash pension settlement charge


-


8,189


-


8,189

          Increase (decrease) in cash resulting from changes in









            operating assets and liabilities


16,049


18,425


(25,671)


(22,565)

                Net cash provided by operating activities


137,778


$120,872


205,377


$162,377












Cash flows from investing activities:









    Proceeds from sale of property, plant and equipment(a)


206


83


10,209


218

    Purchase of property, plant and equipment


(27,514)


(14,510)


(48,529)


(28,858)

    Acquisitions


(697)


-


(697)


(4,329)

    Net hedging settlements on intercompany loans


(1,345)


(1,053)


(1,033)


1,075

                Net cash used in investing activities


(29,350)


(15,480)


(40,050)


(31,894)












Cash flows from financing activities:









    Proceeds from borrowings


200,189


163,147


672,921


392,560

    Repayments of borrowings


(205,281)


(145,217)


(615,162)


(269,684)

    Proceeds from exercise of stock options


8,734


8,056


16,935


13,965

    Repurchases of common stock 


(124,952)


(124,997)


(249,949)


(249,997)

    Other financing activities


(7,205)


(555)


(7,205)


(680)

                Net cash used in financing activities


(128,515)


(99,566)


(182,460)


(113,836)












Effect of exchange rate changes on cash and cash equivalents

1,528


(1,775)


4,793


(888)












Net (decrease) increase in cash and cash equivalents


(18,559)


4,051


(12,340)


15,759












Cash and cash equivalents:









    Beginning of period


164,893


110,595


158,674


98,887

    End of period


$146,334


$114,646


$146,334


$114,646























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















Net cash provided by operating activities


$137,778


$120,872


$205,377


$162,377

    Payments in respect of restructuring activities


2,748


2,461


5,326


4,302

    Proceeds from sale of property, plant and equipment


206


83


10,209


218

    Purchase of property, plant and equipment


(27,514)


(14,510)


(48,529)


(28,858)

Free cash flow


$113,218


$108,906


$172,383


$138,039












(a)     Proceeds from sale of property, plant and equipment includes $9.9 million relating to the sale of a facility in Switzerland in connection with our 
          initiative to consolidate certain Swiss operations into a new facility for the six months ended June 30, 2017.

 

 

 

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, 2017



1%


9%


13%


7%




Six Months Ended June 30, 2017



4%


11%


10%


9%
















Local Currency Sales Growth













Three Months Ended June 30, 2017



4%


10%


15%


10%




Six Months Ended June 30, 2017



8%


12%


12%


11%





























RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 


(unaudited)

















Three months ended


Six months ended



June 30,


June 30,



2017


2016


% Growth


2017


2016


% Growth














EPS as reported, diluted

$3.84


$2.93


31%


$7.32


$5.32


38%














Restructuring charges, net of tax

0.12

(a)

0.06

(a)



0.16

(a)

0.09

(a)


Purchased intangible amortization, net of tax

0.06

(b)

0.04

(b)



0.11

(b)

0.08

(b)


Income tax expense

(0.10)

(c)

-




(0.24)

(c)

-



Gain on facility sale

-


-




(0.10)

(d)

-



Non-cash pension settlement charge, net of tax

-


0.19

(e)



-


0.19

(e)















Adjusted EPS, diluted

$3.92


$3.22


22%


$7.25


$5.68


28%














Notes:












(a)     Represents the EPS impact of restructuring charges of $4.0 million ($3.1 million after tax) and $2.2 million ($1.7 million after tax) for the 
          three months ended June 30, 2017 and 2016, and $5.5 million ($4.3 million after tax) and $3.1 million ($2.3 million after tax) for the six 
          months ended June 30, 2017 and 2016, respectively, which primarily include employee related costs.

(b)     Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.5 million and $1.0 million for the three months 
          ended June 30, 2017 and 2016, and $3.0 million and $2.1 million for the six months ended June 30, 2017 and 2016, respectively.

(c)     Represents the EPS impact of the difference between our reported tax rate of 20% and 19% during the three and six 
          months ending June 30, 2017 and our estimated annual income tax rate of 22%, which reflects a 2% benefit pertaining to 
          excess tax benefits associated with stock option exercises. 

(d)     Represents the EPS impact of a one-time gain of $3.4 million ($2.7 million after tax) for the six months ended June 30, 2017 
          relating to the sale of a facility in Switzerland in connection with our initiative to consolidate certain Swiss operations into 
          a new facility.

(e)     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.