Mettler-Toledo International Inc. Reports Second Quarter 2016 Results
- 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
EPS in the quarter was
Sales were
Cash flow from operations was
Six Month Results
EPS for the six months was
Sales were
Cash flow from operations was
Acquisition to Expand Secondary Brand Offering and Market Position in Weight Calibration
The Company announced that it intends to complete the acquisition of
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
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
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 (
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. |
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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. |
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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: |
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(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. |
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(c) Adjusted operating income increased 9% as compared to the same period in 2015. |
METTLER-TOLEDO INTERNATIONAL INC. |
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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. |
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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. |
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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. |
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OTHER OPERATING STATISTICS |
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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% |
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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. |
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(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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