Mettler-Toledo International Inc. Reports First Quarter 2013 Results

- Further Margin Improvement Drives Earnings Growth -

PR Newswire

COLUMBUS, Ohio, May 2, 2013 /PRNewswire/ -- Mettler-Toledo International Inc. (MTD) today announced first quarter results for 2013.  Provided below are the highlights:

  • Sales in local currency decreased by 2% in the quarter compared with the prior year.  Reported sales also decreased 2%, as currency had no impact on sales in the quarter.
  • Net earnings per diluted share as reported (EPS) were $1.69, compared with $1.62 in the first quarter of 2012.  Adjusted EPS was $1.84, an increase of 11% over the prior-year amount of $1.66.  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. 

First Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "Market conditions were challenging, particularly in Europe and Asia.  However, I am pleased to report that we continue to have strong execution in our various margin improvement and cost control initiatives, resulting in good EPS growth."

EPS was $1.69, compared with the prior-year amount of $1.62.  Adjusted EPS was $1.84, an increase of 11% over the prior-year amount of $1.66.  

Sales were $524.4 million, a 2% decrease in local currency sales, compared with $535.4 million in the prior-year quarter.  Reported sales also decreased 2%, as currency had no impact on sales in the quarter.  By region, local currency sales increased 1% in the Americas and decreased 5% in Europe and decreased 2% in Asia / Rest of World.  Adjusted operating income amounted to $85.4 million, a 6% increase from the prior-year amount of $80.8 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 $23.7 million, compared with $20.8 million in the prior-year quarter.

Cost Control Measures

As part of the cost control measures announced in the second quarter of 2012, the Company recorded pre-tax restructuring charges of $5.0 million in the quarter.

Outlook 

The Company updated its outlook for 2013 and noted that uncertainty in demand exists in most of its markets, which makes forecasting difficult.  Based on today's assessment, management anticipates that local currency sales growth in 2013 will be in the range of 1% to 3%, with growth stronger in the second half of the year.  This sales growth will result in Adjusted EPS in the range of $10.40 to $10.60, an increase of 8% to 10%.  This compares to previous guidance of Adjusted EPS in the range of $10.30 to $10.55.    

The Company stated that, based on its assessment of market conditions today, management anticipates that local currency sales growth for the second quarter of 2013 will be in the range of 0% to 2%, and Adjusted EPS will be in the range of $2.30 to $2.35, an increase of 7% to 9%.

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, "While market conditions remain challenging with significant uncertainty in the global economy, we expect conditions to improve as the year progresses.  We made adjustments to our cost structure last year in anticipation of slower market growth.  Therefore, while we will continue to monitor the environment closely, we believe we are well positioned to expand margins despite modest sales growth expectations for the year.  We remain focused on the execution of our strategic initiatives and continue to see opportunities to further gain market share, despite the environment."  

Other Matters

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









March 31, 2013


% of sales



March 31, 2012


% of sales






































Net sales



$524,353


(a)


100.0





$535,400




100.0



Cost of sales



245,100




46.7





258,298




48.2



Gross profit



279,253




53.3





277,102




51.8























Research and development



27,700




5.3





28,667




5.4



Selling, general and administrative 



166,120




31.7





167,641




31.3



Amortization



5,122




1.0





5,199




1.0



Interest expense



5,400




1.0





5,823




1.1



Restructuring charges



5,002




1.0





308




0.1



Other charges (income), net



773




0.1





156




0.0



Earnings before taxes



69,136




13.2





69,308




12.9























Provision for taxes



16,592




3.2





16,981




3.1



Net earnings



$52,544




10.0





$52,327




9.8























Basic earnings per common share:



















Net earnings 



$1.73









$1.66







Weighted average number of common shares



30,299,569









31,531,915



























Diluted earnings per common share:



















Net earnings 



$1.69









$1.62







Weighted average number of common 



31,101,979









32,386,924







  and common equivalent shares







































Note:



















(a)  Local currency sales decreased 2% as compared to the same period in 2012.



























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME























Three months ended






Three months ended









March 31, 2013


% of sales



March 31, 2012


% of sales






















Earnings before taxes



$69,136









$69,308







Amortization



5,122









5,199







Interest expense



5,400









5,823







Restructuring charges



5,002









308







Other charges (income), net



773









156







Adjusted operating income 



$85,433


(b)


16.3





$80,794




15.1























Note:



















(b)  Adjusted operating income increased 6% as compared to the same period in 2012.







 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)























March 31, 2013



December 31, 2012











Cash and cash equivalents



$93,209





$101,702


Accounts receivable, net



410,650





437,390


Inventories



199,574





198,939


Other current assets and prepaid expenses



125,505





126,889


Total current assets



828,938





864,920












Property, plant and equipment, net



466,165





469,421


Goodwill and other intangibles assets, net



561,198





569,915


Other non-current assets



214,305





213,144


Total assets



$2,070,606





$2,117,400












Short-term borrowings and maturities of long-term debt



$17,959





$41,600


Trade accounts payable



116,678





142,362


Accrued and other current liabilities



343,658





378,715


Total current liabilities



478,295





562,677












Long-term debt



421,913





347,131


Other non-current liabilities



370,176





380,373


Total liabilities



1,270,384





1,290,181












Shareholders' equity



800,222





827,219


Total liabilities and shareholders' equity



$2,070,606





$2,117,400












 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)













Three months ended






March 31,






2013


2012










Cash flow from operating activities:







    Net earnings



$52,544


$52,327


    Adjustments to reconcile net earnings to







      net cash provided by operating activities:







Depreciation



8,881


7,775


Amortization



5,122


5,199


Deferred tax benefit



(3,354)


(2,061)


Excess tax benefits from share-based payment arrangements


(256)


(276)


Other



2,831


4,185


Decrease in cash resulting from changes in







  operating assets and liabilities



(42,096)


(46,352)


                Net cash provided by operating activities



23,672


20,797










Cash flows from investing activities:







    Proceeds from sale of property, plant and equipment



36


87


    Purchase of property, plant and equipment



(19,018)


(18,529)


                Net cash used in investing activities



(18,982)


(18,442)










Cash flows from financing activities:







    Proceeds from borrowings



141,959


60,879


    Repayments of borrowings



(89,334)


(93,878)


    Proceeds from exercise of stock options



7,069


12,838


    Excess tax benefits from share-based payment arrangements



256


276


    Repurchases of common stock 



(72,300)


(63,721)


    Other financing activities



(483)


(164)


                Net cash used in financing activities



(12,833)


(83,770)










Effect of exchange rate changes on cash and cash equivalents



(350)


2,006










Net decrease in cash and cash equivalents



(8,493)


(79,409)










Cash and cash equivalents:







    Beginning of period



101,702


235,601


    End of period



$93,209


$156,192


















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









Net cash provided by operating activities



$23,672


$20,797


    Excess tax benefits from share-based payment arrangements



256


276


    Payments in respect of restructuring activities



4,646


1,582


    Proceeds from sale of property, plant and equipment



36


87


    Purchase of property, plant and equipment



(19,018)


(18,529)


Free cash flow



$9,592


$4,213


















 

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 March 31, 2013

(5%)


2%


(3%)


(2%)














Local Currency Sales Growth












Three Months Ended March 31, 2013

(5%)


1%


(2%)


(2%)






































RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)

















Three months ended






March 31,






2013



2012


%

Growth














EPS as reported, diluted



$1.69



$1.62


4%














Restructuring charges, net of tax



0.12

(a)


0.01

(a)




Purchased intangible amortization, net of tax



0.03

(b)


0.03

(b)
















Adjusted EPS, diluted



$1.84



$1.66


11%














Notes:











(a)

Represents the EPS impact of restructuring charges of $5.0 million ($3.8 million after tax) and $0.3 million ($0.2 million after tax) for the three months ended March 31, 2013 and 2012, respectively, which primarily include severance costs.

(b)

Represents the EPS impact of purchased intangibles amortization, net of tax, of $0.9 million and $1.1 million for the three month periods ended March 31, 2013 and 2012, respectively.

 

 

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