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Mettler-Toledo International Inc. Reports Third Quarter 2017 Results
- - Good Sales Growth - -
- - Strong EPS Growth - -

COLUMBUS, Ohio, Nov. 2, 2017 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced third quarter results for 2017.  Provided below are the highlights:

  • Sales in local currency increased 6% in the quarter compared with the prior year. Reported sales increased 7% as currency increased sales growth by 1% in the quarter.
     
  • Net earnings per diluted share as reported (EPS) were $3.99, compared with $3.77 in the prior-year period. Adjusted EPS was $4.36, an increase of 12% over the prior-year amount of $3.89. Adjusted EPS is a non-GAAP measure, and we have included a reconciliation to EPS on the last page of the attached schedules.

Third Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "Sales growth in the quarter was good, with excellent growth in Asia/Rest of World.  In the Americas and Europe, sales growth was good in our Lab and Industrial businesses but, as expected, Food Retailing declined.  Our productivity and margin initiatives continue to yield tangible results, which contributed to strong growth in EPS." 

EPS in the quarter was $3.99, compared with the prior-year amount of $3.77.  Adjusted EPS was $4.36, an increase of 12% over the prior-year amount of $3.89.  

Sales were $698.8 million, a 6% increase in local currency sales, compared with $650.6 million in the prior-year quarter.  Reported sales increased 7% as currency increased sales growth by 1% in the quarter.  As compared with the prior year, local currency sales increased 2% in the Americas, 2% in Europe and 15% in Asia/Rest of World.  Adjusted operating income amounted to $162.9 million, a 7% increase from the prior-year amount of $151.7 million.  Adjusted operating income is a non-GAAP measure, and a reconciliation to earnings before taxes is provided in the attached schedules.

Nine Month Results

EPS for the nine months was $11.31, compared with the prior-year amount of $9.08.  Adjusted EPS was $11.61, an increase of 21% over the prior-year amount of $9.56.  

Sales were $1.947 billion, a 9% increase in local currency sales, compared with $1.799 billion in the prior-year period.  Reported sales increased 8% as currency reduced sales growth by 1% in the period.  As compared with the prior year, local currency sales increased 8% in the Americas, 6% in Europe and 13% in Asia/Rest of World.  Adjusted operating income amounted to $438.8 million, a 15% increase from the prior-year amount of $382.8 million.  Adjusted operating income is a non-GAAP measure, and a reconciliation to earnings before taxes is provided in the attached schedules.

Acquisition to Expand Channel Access and Brands in the Liquid Handling Market

The Company announced that, during the quarter, it completed the acquisition of Biotix Inc., a manufacturer and distributor of plastic consumables associated with pipettes, including tips, tubes and reagent reservoirs used in the life sciences market.  The Company stated the acquisition will expand its consumable offering for the pipette market into indirect distribution channels.  Management stated that this expansion is an excellent complement to its Rainin pipette and tips offering that is sold through its direct salesforce.  Biotix is headquartered in San Diego with a manufacturing facility in Mexico. 

Outlook 

Based on today's assessment, management anticipates that local currency sales growth in the fourth quarter 2017 will be approximately 5.5%, and Adjusted EPS is forecasted to be approximately $5.90, an increase of 12%. 

For the full year 2017, local currency sales growth is expected to be approximately 8%.  This sales growth is expected to result in Adjusted EPS of approximately $17.50, an increase of 18%.  This compares with previous guidance of Adjusted EPS in the range of $17.25 to $17.35

The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in 2018 will be approximately 6%.  This sales growth is expected to result in Adjusted EPS in the range of $19.65 to $19.85, which reflects growth of 12% to 13%. 

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, "Demand in our markets remains solid.  We continue to execute well and are benefiting from our Field Turbo investments, Spinnaker sales and marketing initiatives, new product launches and margin and productivity initiatives.  The addition of Biotix will further strengthen our position in the attractive liquid handling market and bring us more exposure to life sciences.  As we look to the remainder of this year and into 2018, we believe we are well positioned to continue to gain market share and deliver strong results."    

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, November 2) 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 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 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








September 30, 2017


% of sales



September 30, 2016


% of sales





















Net sales


$698,799


(a)


100.0





$650,598




100.0



Cost of sales


298,522




42.7





281,104




43.2



Gross profit


400,277




57.3





369,494




56.8






















Research and development


32,477




4.6





30,139




4.6



Selling, general and administrative 


204,915




29.3





187,680




28.8



Amortization


10,716




1.5





9,087




1.4



Interest expense


8,248




1.2





7,167




1.1



Restructuring charges


3,385




0.5





1,494




0.3



Other charges (income), net


909




0.2





603




0.1



Earnings before taxes


139,627




20.0





133,324




20.5






















Provision for taxes


34,677




5.0





31,992




4.9



Net earnings


$104,950




15.0





$101,332




15.6






















Basic earnings per common share:


















Net earnings 


$4.10









$3.84







Weighted average number of common shares


25,613,433









26,375,468


























Diluted earnings per common share:


















Net earnings 


$3.99









$3.77







Weighted average number of common 


26,303,529









26,888,810







  and common equivalent shares





































Note:


















(a)     Local currency sales increased 6% as compared to the same period in 2016.


























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME






















Three months ended







Three months ended








September 30, 2017


% of sales



September 30, 2016


% of sales





















Earnings before taxes


$139,627









$133,324







Amortization


10,716









9,087







Interest expense


8,248









7,167







Restructuring charges


3,385









1,494







Other charges (income), net


909


(b)







603


(b)





Adjusted operating income 


$162,885


(c)


23.3





$151,675




23.3






















Note:


















(b)     Other charges (income), net includes acquisition costs of $1.7 million and $1.1 million for the three months ended September 30, 2017 
          and 2016, respectively.

(c)     Adjusted operating income increased 7% as compared to the same period in 2016.



 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)






















Nine months ended







Nine months ended








September 30, 2017


% of sales



September 30, 2016


% of sales

















Net sales


$1,947,022


(a)


100.0





$1,798,558




100.0



Cost of sales


828,928




42.6





781,581




43.5



Gross profit


1,118,094




57.4





1,016,977




56.5






















Research and development


96,723




5.0





89,813




5.0



Selling, general and administrative 


582,604




29.9





544,399




30.3



Amortization


31,010




1.6





26,166




1.5



Interest expense


24,160




1.2





20,619




1.1



Restructuring charges


8,840




0.5





4,579




0.2



Other charges (income), net


(5,565)




(0.3)





8,492




0.5



Earnings before taxes


380,322




19.5





322,909




17.9






















Provision for taxes


81,326




4.1





76,315




4.2



Net earnings


$298,996




15.4





$246,594




13.7






















Basic earnings per common share:


















Net earnings 


$11.60









$9.25







Weighted average number of common shares


25,764,472









26,644,938


























Diluted earnings per common share:


















Net earnings 


$11.31









$9.08







Weighted average number of common 


26,446,677









27,153,450







  and common equivalent shares





































Note:


















(a)     Local currency sales increased 9% as compared to the same period in 2016.


























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME






















Nine months ended







Nine months ended








September 30, 2017


% of sales



September 30, 2016


% of sales





















Earnings before taxes


$380,322









$322,909







Amortization


31,010









26,166







Interest expense


24,160









20,619







Restructuring charges


8,840









4,579







Other charges (income), net


(5,565)


(b)







8,492


(d)





Adjusted operating income 


$438,767


(c)


22.5





$382,765




21.3






















Note:


















(b)     Other charges (income), net includes a one-time gain of $3.4 million relating to the sale of a facility in Switzerland in connection with 
          our initiative to consolidate certain Swiss operations into a new facility and $1.7 million of acquisition costs for the nine months ended September 30, 2017.

(c)     Adjusted operating income increased 15% 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 and acquisition costs of $1.1 million for the nine months ended September 30, 2016.

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)




















September 30, 2017



December 31, 2016










Cash and cash equivalents


$169,086





$158,674


Accounts receivable, net


483,167





454,988


Inventories


263,527





222,047


Other current assets and prepaid expenses


70,784





61,075


Total current assets


986,564





896,784











Property, plant and equipment, net


641,709





563,707


Goodwill and other intangibles assets, net


768,393





643,433


Other non-current assets


100,533





62,853


Total assets


$2,497,199





$2,166,777











Short-term borrowings and maturities of long-term debt


$18,533





$18,974


Trade accounts payable


148,521





146,593


Accrued and other current liabilities


485,304





421,948


Total current liabilities


652,358





587,515











Long-term debt


1,050,681





875,056


Other non-current liabilities


281,181





269,263


Total liabilities


1,984,220





1,731,834











Shareholders' equity


512,979





434,943


Total liabilities and shareholders' equity


$2,497,199





$2,166,777


 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)












Three months ended


Nine months ended



September 30,


September 30,



2017


2016


2017


2016










Cash flow from operating activities:








    Net earnings

$104,950


$101,332


$298,996


$246,594

    Adjustments to reconcile net earnings to








      net cash provided by operating activities:








   Depreciation

8,502


8,411


24,421


24,527

   Amortization

10,716


9,087


31,010


26,166

   Deferred tax benefit

(3,914)


(2,226)


(7,754)


(11,078)

   Other

4,027


3,719


12,050


10,867

   Gain on facility sale 

-


-


(3,394)


-

   Non-cash pension settlement charge

-


-


-


8,189

 Increase (decrease) in cash resulting from changes in








  operating assets and liabilities

21,577


24,613


(4,094)


2,048

                Net cash provided by operating activities

145,858


144,936


351,235


307,313










Cash flows from investing activities:








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

228


143


10,437


361

    Purchase of property, plant and equipment

(37,297)


(22,376)


(85,826)


(51,234)

    Acquisitions

(107,748)


(105,352)


(108,445)


(109,681)

    Net hedging settlements on intercompany loans

4,749


956


3,716


2,031

                Net cash used in investing activities

(140,068)


(126,629)


(180,118)


(158,523)










Cash flows from financing activities:








    Proceeds from borrowings

312,773


317,428


985,694


709,988

    Repayments of borrowings

(218,899)


(186,229)


(834,061)


(455,913)

    Proceeds from exercise of stock options

6,380


6,222


23,315


20,187

    Repurchases of common stock 

(85,049)


(124,997)


(334,998)


(374,994)

    Other financing activities

-


-


(7,205)


(680)

                Net cash provided by (used in) financing activities

15,205


12,424


(167,255)


(101,412)










Effect of exchange rate changes on cash and cash equivalents

1,757


756


6,550


(132)










Net increase in cash and cash equivalents

22,752


31,487


10,412


47,246










Cash and cash equivalents:








    Beginning of period

146,334


114,646


158,674


98,887

    End of period

$169,086


$146,133


$169,086


$146,133



















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













Net cash provided by operating activities

$145,858


$144,936


$351,235


$307,313

    Payments in respect of restructuring activities

2,375


2,002


7,701


6,304

    Payments for acquisition costs

764


910


764


910

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

228


143


10,437


361

    Purchase of property, plant and equipment

(37,297)


(22,376)


(85,826)


(51,234)

Free cash flow

$111,928


$125,615


$284,311


$263,654










(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 nine months ended 
          September 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 September 30, 2017



7%


2%


15%


7%




Nine Months Ended September 30, 2017



5%


8%


12%


8%
















Local Currency Sales Growth













Three Months Ended September 30, 2017



2%


2%


15%


6%




Nine Months Ended September 30, 2017



6%


8%


13%


9%





























RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 


(unaudited)

















Three months ended

Nine months ended



September 30,

September 30,



2017


2016


% Growth


2017


2016


% Growth














EPS as reported, diluted

$3.99


$3.77


6%


$11.31


$9.08


25%














Restructuring charges, net of tax

0.10

(a)

0.04

(a)



0.26

(a)

0.13

(a)


Purchased intangible amortization, net of tax

0.07

(b)

0.05

(b)



0.18

(b)

0.13

(b)


Acquisition costs, net of tax

0.05

(c)

0.03

(c)



0.05

(c)

0.03

(c)


Income tax expense

0.15

(d)

-




(0.09)

(d)

-



Gain on facility sale

-


-




(0.10)

(e)

-



Non-cash pension settlement charge, net of tax

-


-




-


0.19

(f)















Adjusted EPS, diluted

$4.36


$3.89


12%


$11.61


$9.56


21%














Notes:












(a)

Represents the EPS impact of restructuring charges of $3.4 million ($2.6 million after tax) and $1.5 million ($1.1 million after tax) for the three months ended September 30, 2017 and 2016, and $8.8 million ($6.9 million after tax) and $4.6 million ($3.5 million after tax) for the nine months ended September 30, 2017 and 2016, respectively, which primarily include employee related costs.

(b)

Represents the EPS impact of purchased intangibles amortization of $2.6 million ($1.7 million after tax) and $2.0 million ($1.3 million after tax) for the three months ended September 30, 2017 and 2016, and $7.2 million ($4.7 million after tax) and $5.2 million ($3.5 million after tax) for the nine months ended September 30, 2017 and 2016, respectively.

(c)

Represents the EPS impact of acquisition costs of $1.7 million ($1.3 million after tax) and $1.1 million ($0.8 million after tax) for the three and nine months ended September 30, 2017 and 2016, respectively.

(d)

Represents the EPS impact of the difference between our reported tax rate of 25% and 21% during the three and nine months ending September 30, 2017 and our estimated annual income tax rate of 22%, which reflects a 2% estimated annual benefit pertaining to excess tax benefits associated with stock option exercises. 

(e)

Represents the EPS impact of a one-time gain of $3.4 million ($2.7 million after tax) for the nine months ended September 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.

(f)

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 nine months ended September 30, 2016.

 

 

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SOURCE Mettler-Toledo International Inc.