Mettler-Toledo International Inc. Reports First Quarter 2018 Results
Mettler-Toledo International Inc. Reports First Quarter 2018 Results
- - Strong Adjusted EPS Growth - -
COLUMBUS, Ohio, May 3, 2018 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced first quarter results for 2018. Provided below are the highlights:
-- Sales in local currency increased 5% in the quarter compared with the
prior year. Reported sales increased 11% as currency increased sales
growth by 6% in the quarter.
-- Net earnings per diluted share as reported (EPS) were $3.58, compared
with $3.48 in the prior-year period. Adjusted EPS was $3.74, an
increase of 12% over the prior-year amount of $3.34. Adjusted EPS is a
non-GAAP measure, and we have included a reconciliation to EPS on the
last page of the attached schedules.
First Quarter Results
Olivier Filliol, President and Chief Executive Officer, stated, "Sales growth in the quarter came in as expected, and was impacted by the excellent sales growth in the prior-year period. China, in particular, had very strong broad-based sales growth in the quarter. This solid sales growth drove another quarter of strong Adjusted EPS growth."
EPS in the quarter was $3.58, compared with the prior-year amount of $3.48. Adjusted EPS was $3.74, an increase of 12% over the prior-year amount of $3.34.
Sales were $660.8 million, a 5% increase in local currency sales, compared with $594.6 million in the prior-year quarter. Reported sales increased 11% as currency increased sales growth by 6% in the quarter. Compared with the prior year, local currency sales increased 5% in the Americas and 10% in Asia/Rest of World. Sales declined 1% in local currency in Europe. Adjusted operating income amounted to $139.5 million, a 10% increase from the prior-year amount of $126.5 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 2018 will be approximately 6%. This sales growth is expected to result in
Adjusted EPS in the range of $20.10 to $20.25, which reflects growth of 14% to 15%. This compares with previous guidance of Adjusted EPS in the range of $19.95 to $20.15.
Management anticipates that local currency sales growth in the second quarter 2018 will be approximately 6%, and Adjusted EPS is forecasted to be in the range of $4.55 to $4.60, an increase of 16% to 17%.
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 outlook for 2018 remains promising despite facing difficult comparisons given our very strong performance last year. We acknowledge there is more uncertainty in the global economy compared with a few months ago but overall demand remains solid. We believe we are well positioned for continued share gains. Our Spinnaker sales and marketing programs, new product launches and continued investments in sales activities are generating returns. Our margin and productivity programs complement our sales growth initiatives and will yield continued earnings growth and funds for additional investments for growth."
Other Matters
The Company will host a conference call to discuss its quarterly results today (Thursday, May 3) 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 10-K. 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, 2018 % of sales March 31, 2017 % of sales
-------------- ---------- -------------- ----------
Net sales $660,821 (a) 100.0 $594,567 100.0
Cost of sales 285,888 43.3 251,178 (b) 42.2
------- ---- ------- ----
Gross profit 374,933 56.7 343,389 57.8
Research and development 34,713 5.3 31,200 (b) 5.3
Selling, general and administrative 200,674 30.4 185,656 (b) 31.2
Amortization 11,735 1.8 10,045 1.7
Interest expense 8,359 1.2 7,741 1.3
Restructuring charges 4,413 0.6 1,432 0.2
Other charges (income), net (2,400) (0.4) (6,533) (b)(c) (1.0)
------ ---- ------ ----
Earnings before taxes 117,439 17.8 113,848 19.1
Provision for taxes 24,135 3.7 21,382 3.5
Net earnings $93,304 14.1 $92,466 15.6
======= ==== ======= ====
Basic earnings per common share:
Net earnings $3.66 $3.57
Weighted average number of common shares 25,468,323 25,932,112
Diluted earnings per common share:
Net earnings $3.58 $3.48
Weighted average number of common 26,095,647 26,586,061
and common equivalent shares
Note:
Local
currency
sales
increased
5% as
compared
to the
same
period in
(a) 2017.
(b) In accordance
with the new
accounting
rules that
went into
effect on
January 1,
2018, the
Company
reclassified
a net pension
benefit of
$0.8 million
into other
charges
(income) from
other income
statement
categories
for the three
months ended
March 31,
2017 to be
consistent
with the 2018
presentation.
(c) Other charges
(income), net
for three
months ended
March 31,
2017 also
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.
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
Three months ended Three months ended
March 31, 2018 % of sales March 31, 2017 % of sales
-------------- ---------- -------------- ----------
Earnings before taxes $117,439 $113,848
Amortization 11,735 10,045
Interest expense 8,359 7,741
Restructuring charges 4,413 1,432
Other charges (income), net (2,400) (6,533) (b)(c)
Adjusted operating income $139,546 (d) 21.1 $126,533 21.3
======== ========
Note:
(d) Adjusted operating income increased 10% as compared to the same period in 2017.
METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
March 31, 2018 December 31, 2017
-------------- -----------------
Cash and cash equivalents $98,949 $148,687
Accounts receivable, net 483,919 528,615
Inventories 278,318 255,390
Other current assets and
prepaid expenses 66,186 74,031
------ ------
Total current assets 927,372 1,006,723
Property, plant and
equipment, net 696,890 668,271
Goodwill and other
intangible assets, net 769,511 766,556
Other non-current assets 118,134 108,255
Total assets $2,511,907 $2,549,805
========== ==========
Short-term borrowings and
maturities of long-term
debt $14,883 $19,677
Trade accounts payable 164,639 167,627
Accrued and other current
liabilities 457,360 502,369
------- -------
Total current liabilities 636,882 689,673
Long-term debt 978,715 960,170
Other non-current
liabilities 335,563 352,682
------- -------
Total liabilities 1,951,160 2,002,525
Shareholders' equity 560,747 547,280
Total liabilities and
shareholders' equity $2,511,907 $2,549,805
========== ==========
METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
Three months ended
March 31,
---------
2018 2017
---- ----
Cash flow from operating activities:
Net earnings $93,304 $92,466
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 9,157 7,966
Amortization 11,735 10,045
Deferred tax benefit (6,416) (1,470)
Gain on facility sale - (3,394)
Other 3,085 3,812
Decrease in cash resulting from changes in
operating assets and liabilities (34,301) (41,826)
Net cash provided by operating activities 76,564 67,599
------ ------
Cash flows from investing activities:
Proceeds from sale of property, plant and
equipment 4,507 10,003
Purchase of property, plant and equipment (29,774) (21,015)
Acquisitions (500) -
Net hedging settlements on intercompany
loans 3,304 312
Net cash used in investing activities (22,463) (10,700)
------- -------
Cash flows from financing activities:
Proceeds from borrowings 336,512 472,732
Repayments of borrowings (331,114) (409,881)
Proceeds from exercise of stock options 5,669 8,201
Repurchases of common stock (118,750) (124,997)
Net cash used in financing activities (107,683) (53,945)
-------- -------
Effect of exchange rate changes on cash and
cash equivalents 3,844 3,265
Net increase (decrease) in cash and cash
equivalents (49,738) 6,219
Cash and cash equivalents:
Beginning of period 148,687 158,674
End of period $98,949 $164,893
======= ========
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
Net cash provided by operating activities $76,564 $67,599
Payments in respect of restructuring
activities 5,242 2,578
Proceeds from sale of property, plant and
equipment 4,507 10,003
Purchase of property, plant and equipment (29,774) (21,015)
Free cash flow $56,539 $59,165
======= =======
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, 2018 12% 6% 18% 11%
Local Currency Sales Growth (Decrease)
Three Months Ended March 31, 2018 (1%) 5% 10% 5%
RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS
(unaudited)
Three months ended
March 31,
---------
2018 2017 %
Growth
------
EPS as reported, diluted $3.58 $3.48 3%
Restructuring charges, net of tax 0.13 (a) 0.04 (a)
Purchased intangible amortization, net of tax 0.10 (b) 0.06 (b)
Income tax expense (0.07) (c) (0.14) (c)
Gain on facility sale (0.10) (d)
-----
Adjusted EPS, diluted $3.74 $3.34 12%
===== =====
Notes:
(a) Represents the EPS impact of restructuring charges of $4.4 million ($3.4 million after tax) and $1.4 million
($1.1 million after tax) for
both the three months ended March 31, 2018 and 2017, respectively, which primarily include employee related
costs.
(b) Represents the EPS impact of purchased intangibles amortization, net of tax, of $2.5 million and $1.5 million for
the three month
periods ended March 31, 2018 and 2017, respectively.
(c) Represents the EPS impact of the difference between our reported tax rate of 21% and 19% during the three months
ending March 31,
2018 and 2017, respectively, and our annual income tax rate of 22%, due 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 three months ended
March 31, 2017 relating
to the sale of a facility in Switzerland in connection with our initiative to consolidate certain Swiss
operations into a new facility.
CONTACT: Mary T. Finnegan, Treasurer, Investor Relations, Mettler-Toledo International Inc., +1-614-438-4748, Fax: +1-614-438-4646
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SOURCE Mettler-Toledo International Inc.
