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Mettler-Toledo International Inc. Reports Second Quarter 2019 Results

COLUMBUS, Ohio, Aug. 1, 2019 /PRNewswire/ -- Mettler-Toledo International Inc. (MTD) today announced second quarter results for 2019.  Provided below are the highlights:

  • Reported sales increased 1% compared with the prior year.  In local currency, sales increased 5% in the quarter as currency reduced sales growth by 4%. 
  • Net earnings per diluted share as reported (EPS) were $5.06, compared with $4.31 in the prior-year period.  Adjusted EPS was $5.16, an increase of 11% over the prior-year amount of $4.65.  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 was solid in the quarter with excellent growth in our Laboratory product lines and good growth in our Core Industrial business.  Sales growth in the Americas and China was particularly strong while sales growth in Europe was impacted by strong prior-year comparisons.  With the benefit of our margin initiatives, and despite significant challenges from the adverse impact of currency and tariff costs, we achieved strong growth in earnings in the quarter."

GAAP Results
EPS in the quarter was $5.06, compared with the prior-year amount of $4.31

Compared with the prior year, total reported sales increased 1% to $731.4 million.  By region, reported sales increased 7% in the Americas and 2% in Asia/Rest of World.  Reported sales in Europe declined by 6%.  Earnings before taxes amounted to $155.2 million, compared with $143.6 million in the prior year. 

Non-GAAP Results
Adjusted EPS was $5.16, an increase of 11% over the prior-year amount of $4.65.     

Compared with the prior year, total sales in local currency increased 5% as currency reduced reported sales growth by 4%.  By region, local currency sales increased 7% in the Americas and 7% in Asia/Rest of World.  Local currency sales declined 1% in Europe.  Adjusted Operating Profit amounted to $177.7 million, a 5% increase from the prior-year amount of $169.3 million

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

Six Month Results

GAAP Results
EPS was $9.48, compared with the prior-year amount of $7.88

Compared with the prior year, total reported sales increased 2% to $1.411 billion.  By region, reported sales increased 5% in the Americas and 3% in Asia/Rest of World.  Reported sales in Europe declined 2%.  Earnings before taxes amounted to $280.9 million, compared with $261.0 million in the prior year. 

Non-GAAP Results
Adjusted EPS was $9.26, an increase of 11% over the prior-year amount of $8.38.  

Compared with the prior year, total sales in local currency increased 6% as currency reduced reported sales growth by 4%.  By region, local currency sales increased 5% in the Americas, 4% in Europe and 8% in Asia/Rest of World.  Adjusted Operating Profit amounted to $325.6 million, a 5% increase from the prior-year amount of $308.8 million

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

Outlook

The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in 2019 will be approximately 5%.  This sales growth is expected to result in Adjusted EPS in the range of $22.60 to $22.75, a growth rate of 11% to 12%.  This compares with previous Adjusted EPS guidance of $22.55 to $22.75.  

Based on today's assessment of market conditions, management anticipates that local currency sales growth in the third quarter 2019 will be in the range of 4% to 5%, and Adjusted EPS is forecasted to be in the range of $5.65 to $5.75, an increase of 10% to 12%. 

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.  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, "With the exception of our Food Retail business, demand in our markets is favorable and our growth initiatives continue to generate tangible results.  We assume market conditions will remain unchanged and our outlook for the third quarter is positive.  As we look to the later part of the year, we acknowledge there is more uncertainty due to macroeconomic data.  We remain focused on our growth strategy and believe we can continue to gain market share regardless of the economy.  Based on market conditions today, we believe we can deliver strong results in 2019."

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, August 1) 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 (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 10-K.  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










June 30, 2019



% of sales



June 30, 2018



% of sales






















Net sales



$731,366


(a)


100.0





$721,996




100.0



Cost of sales



311,828




42.6





309,371




42.8



Gross profit



419,538




57.4





412,625




57.2























Research and development



36,582




5.0





35,315




4.9



Selling, general and administrative 



205,215




28.1





208,024




28.8



Amortization



12,326




1.7





11,970




1.7



Interest expense



8,882




1.2





8,309




1.2



Restructuring charges



2,891




0.4





7,321




1.0



Other charges (income), net



(1,574)




(0.2)





(1,916)




(0.3)



Earnings before taxes



155,216




21.2





143,602




19.9























Provision for taxes



28,056




3.8





32,134




4.5



Net earnings



$127,160




17.4





$111,468




15.4























Basic earnings per common share:



















Net earnings 



$5.15









$4.41







Weighted average number of common shares



24,698,032









25,299,414



























Diluted earnings per common share:



















Net earnings 



$5.06









$4.31







Weighted average number of common 



25,118,352









25,867,383







  and common equivalent shares







































Note:



















(a)     Local currency sales increased 5% as compared to the same period in 2018.























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT

























Three months ended









Three months ended










June 30, 2019



% of sales



June 30, 2018



% of sales






















Earnings before taxes



$155,216









$143,602







Amortization



12,326









11,970







Interest expense



8,882









8,309







Restructuring charges



2,891









7,321







Other charges (income), net



(1,574)









(1,916)







Adjusted operating profit



$177,741


(b)


24.3





$169,286




23.4























Note:



















(b)     Adjusted operating profit increased 5% as compared to the same period in 2018.



 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)
























Six months ended








Six months ended










June 30, 2019



% of sales



June 30, 2018



% of sales


















Net sales



$1,410,818


(a)


100.0





$1,382,817




100.0



Cost of sales



602,961




42.7





595,259




43.0



Gross profit



807,857




57.3





787,558




57.0























Research and development



72,635




5.1





70,028




5.1



Selling, general and administrative 



409,640




29.0





408,698




29.6



Amortization



24,548




1.7





23,705




1.7



Interest expense



17,976




1.4





16,668




1.2



Restructuring charges



4,414




0.3





11,734




0.8



Other charges (income), net



(2,248)




(0.1)





(4,316)




(0.3)



Earnings before taxes



280,892




19.9





261,041




18.9























Provision for taxes



41,927




3.0





56,269




4.1



Net earnings



$238,965




16.9





$204,772




14.8























Basic earnings per common share:



















Net earnings 



$9.65









$8.07







Weighted average number of common shares



24,774,262









25,383,402



























Diluted earnings per common share:



















Net earnings 



$9.48









$7.88







Weighted average number of common 



25,217,359









25,979,508







  and common equivalent shares







































Note:



















(a)     Local currency sales increased 6% as compared to the same period in 2018.























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT
























Six months ended








Six months ended










June 30, 2019



% of sales



June 30, 2018



% of sales






















Earnings before taxes



$280,892









$261,041







Amortization



24,548









23,705







Interest expense



17,976









16,668







Restructuring charges



4,414









11,734







Other charges (income), net



(2,248)









(4,316)







Adjusted operating profit



$325,582

(b)


23.1





$308,832




22.3























Note:



















(b)     Adjusted operating profit increased 5% as compared to the same period in 2018.



 


METTLER-TOLEDO INTERNATIONAL INC.


CONDENSED CONSOLIDATED BALANCE SHEETS


(amounts in thousands)


(unaudited)


























June 30, 2019



December 31, 2018












Cash and cash equivalents



$124,439





$178,110


Accounts receivable, net



498,723





535,528


Inventories



286,347





268,821


Other current assets and prepaid expenses



71,937





63,401


Total current assets



981,446





1,045,860













Property, plant and equipment, net



728,007





717,526


Goodwill and other intangibles assets, net



745,768





752,088


Other non-current assets



205,637

(a)


103,373


Total assets



$2,660,858





$2,618,847













Short-term borrowings and maturities of long-term debt



$51,918





$49,670


Trade accounts payable



160,584





196,641


Accrued and other current liabilities



494,749

(a)


488,123


Total current liabilities



707,251





734,434













Long-term debt



1,087,874





985,021


Other non-current liabilities



361,647

(a)


309,329


Total liabilities



2,156,772





2,028,784













Shareholders' equity



504,086





590,063


Total liabilities and shareholders' equity



$2,660,858





$2,618,847





(a)

Includes a lease right-of-use asset of $88.1 million, a short-term lease liability of $26.4 million and

a long-term lease liability of $62.3 million in accordance with ASC 842 "Leases" that went into

effect on January 1, 2019.


 

METTLER-TOLEDO INTERNATIONAL INC.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


 (amounts in thousands)


 (unaudited)














Three months ended


Six months ended




June 30,


June 30,




2019


2018


2019


2018












Cash flow from operating activities:









    Net earnings

$127,160


$111,468


$238,965


$204,772


    Adjustments to reconcile net earnings to









      net cash provided by operating activities:









    Depreciation

9,623


9,449


19,390


18,606


    Amortization

12,326


11,970


24,548


23,705


    Deferred tax expense (benefit)

58


(3,693)


(14,881)


(10,109)


    Other

4,286


3,951


8,790


7,036


   Increase (decrease) in cash resulting from changes in









    operating assets and liabilities

(26,383)


7,050


(50,947)


(27,251)


                Net cash provided by operating activities

127,070


140,195


225,865


216,759












Cash flows from investing activities:









    Proceeds from sale of property, plant and equipment

1,144


23


1,216


4,530


    Purchase of property, plant and equipment

(22,295)


(31,812)


(44,699)


(61,586)


    Acquisitions

(504)


-


(504)


(500)


    Net hedging settlements on intercompany loans

(6,028)


3,738


(1,226)


7,042


                Net cash used in investing activities

(27,683)


(28,051)


(45,213)


(50,514)












Cash flows from financing activities:









    Proceeds from borrowings

336,123


266,668


638,830


603,180


    Repayments of borrowings

(261,083)


(171,410)


(532,729)


(502,524)


    Proceeds from exercise of stock options

8,767


4,291


37,757


9,960


    Repurchases of common stock 

(186,249)


(118,749)


(372,500)


(237,499)


    Acquisition contingent consideration payment

-


-


(10,000)


-


    Other financing activities

1,753


(1,635)


1,753


(1,635)


                Net cash used in financing activities

(100,689)


(20,835)


(236,889)


(128,518)












Effect of exchange rate changes on cash and cash equivalents

(739)


(7,067)


2,566


(3,224)












Net (decrease) increase in cash and cash equivalents

(2,041)


84,242


(53,671)


34,503












Cash and cash equivalents:









    Beginning of period

126,480


98,948


178,110


148,687


    End of period

$124,439


$183,190


$124,439


$183,190






















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












Net cash provided by operating activities

$127,070


$140,195


$225,865


$216,759


    Payments in respect of restructuring activities

3,154


8,167


6,846


13,409


    Transition tax payment

4,289


4,200


4,289


4,200


    Proceeds from sale of property, plant and equipment

1,144


23


1,216


4,530


    Purchase of property, plant and equipment

(22,295)


(31,812)


(44,699)


(61,586)


Adjusted free cash flow

$113,362


$120,773


$193,517


$177,312












 

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, 2019



(6%)


7%


2%


1%




Six Months Ended June 30, 2019



(2%)


5%


3%


2%
















Local Currency Sales Growth (Decrease)













Three Months Ended June 30, 2019



(1%)


7%


7%


5%




Six Months Ended June 30, 2019



4%


5%


8%


6%





























RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 


(unaudited)

















Three months ended

Six months ended



June 30,

June 30,



2019


2018


% Growth


2019


2018


% Growth














EPS as reported, diluted

$5.06


$4.31


17%


$9.48


$7.88


20%














Restructuring charges, net of tax

0.09

(a)

0.22

(a)



0.14

(a)

0.35

(a)


Purchased intangible amortization, net of tax

0.10

(b)

0.10

(b)



0.21

(b)

0.19

(b)


Income tax expense

(0.09)

(c)

0.02

(c)



(0.57)

(c)

(0.04)

(c)















Adjusted EPS, diluted

$5.16


$4.65


11%


$9.26


$8.38


11%














Notes:












(a)

Represents the EPS impact of restructuring charges of $2.9 million ($2.3 million after tax) and $7.3 million ($5.7 million after tax) for the

three months ended June 30, 2019 and 2018, and $4.4 million ($3.5 million after tax) and $11.7 million ($9.2 million after tax) for the six

months ended June 30, 2019 and 2018, respectively, which primarily include employee related costs.

(b)

Represents the EPS impact of purchased intangibles amortization, net of tax, of $2.6 million and $2.5 million for the three months

ended June 30, 2019 and 2018, and $5.2 million and $5.0 million for the six months ended June 30, 2019 and 2018, respectively.

(c)

Represents the EPS impact on our reported tax rate during the three and six months ending June 30, 2019 and 2018, respectively, due

to excess tax benefits associated with stock option exercises. 

 

Cision

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