Mettler-Toledo International Inc. Reports Second Quarter 2018 Results
COLUMBUS, Ohio, July 26, 2018 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2018. Provided below are the highlights:
-- Reported sales increased 10% as compared with the prior year. In local
currency, sales increased 7% in the quarter as currency benefited
reported sales growth by 3%.
-- Net earnings per diluted share as reported (EPS) were $4.31, compared
with $3.84 in the prior-year period. Adjusted EPS was $4.65, an
increase of 19% over the prior-year amount of $3.92. 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, "We had very good sales growth in the quarter against an excellent prior year. Our sales performance was broad-based with China being especially robust. We also achieved another quarter of strong EPS growth."
GAAP Results
EPS in the quarter was $4.31, compared with the prior-year amount of $3.84.
As compared with the prior year, total reported sales increased 10% to $722.0 million. By region, reported sales increased 4% in the Americas, 14% in Europe and 15% in Asia/Rest of World. Earnings before tax amounted to $143.6 million as compared to $126.8 million in the prior year.
Non-GAAP Results
Adjusted EPS was $4.65, an increase of 19% over the prior-year amount of $3.92.
As compared to the prior year, total sales in local currency increased 7% as currency benefited reported sales growth by 3%. By region, local currency sales increased 4% in the Americas, 7% in Europe and 9% in Asia/Rest of World. Adjusted operating income amounted to $169.3 million, a 15% increase from the prior-year amount of $147.4 million.
Adjusted EPS and Adjusted operating income are non-GAAP measures. Reconciliations to the most comparable GAAP measures are provided in the attached schedules.
Six Month Results
GAAP Results
EPS in the first six months was $7.88, compared with the prior-year amount of $7.32.
As compared with the prior-year period, total reported sales increased 11% to $1.383 billion. By region, reported sales increased 5% in the Americas, 13% in Europe and 16% in Asia/Rest of World. Earnings before tax amounted to $261.0 million as compared to $240.7 million in the prior year.
Non-GAAP Results
Adjusted EPS was $8.38, an increase of 16% over the prior-year amount of $7.25.
As compared to the prior-year period, total sales in local currency increased 6% as currency benefited reported sales growth by 5%. By region, local currency sales increased 5% in the Americas, 3% in Europe and 10% in Asia/Rest of World. Adjusted operating income amounted to $308.8 million, a 13% increase from the prior-year amount of $273.9 million.
Adjusted EPS and Adjusted operating income 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 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 guidance remains the same as previous guidance.
Management anticipates that local currency sales growth in the third quarter 2018 will be approximately 6%, and Adjusted EPS is forecasted to be in the range of $4.97 to $5.02, an increase of 14% to 15%.
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, "Demand remains solid in our markets and we continue to achieve favorable results from our growth initiatives. Our sales growth achievement in the first half of the year was especially impressive given the excellent growth in the prior-year period. Earnings growth was very good in the first half and, assuming market conditions do not deteriorate, we remain confident in our outlook for the remainder of the year. We believe we are well-positioned to continue to gain share and drive further earnings growth through new product launches, sales and marketing programs, sales investments, and margin and productivity initiatives."
Other Matters
The Company will host a conference call to discuss its quarterly results today (Thursday, July 26) at 4:30 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
June 30, 2018 % of sales June 30, 2017 % of sales
------------- ---------- ------------- ----------
Net sales $721,996 (a) 100.0 $653,656 100.0
Cost of sales 309,371 42.8 278,044 (b) 42.5
------- ---- ------- ----
Gross profit 412,625 57.2 375,612 57.5
Research and development 35,315 4.9 32,582 (b) 5.0
Selling, general and
administrative 208,024 28.8 195,624 (b) 29.9
Amortization 11,970 1.7 10,249 1.6
Interest expense 8,309 1.2 8,171 1.3
Restructuring charges 7,321 1.0 4,023 0.6
Other charges (income), net (1,916) (0.3) (1,884) (b) (0.3)
------ ---- ------ ----
Earnings before taxes 143,602 19.9 126,847 19.4
Provision for taxes 32,134 4.5 25,267 3.9
Net earnings $111,468 15.4 $101,580 15.5
======== ==== ======== ====
Basic earnings per common
share:
Net earnings $4.41 $3.94
Weighted average number of
common shares 25,299,414 25,751,374
Diluted earnings per common
share:
Net earnings $4.31 $3.84
Weighted average number of
common 25,867,383 26,439,529
and common equivalent shares
Note:
(a) Local currency sales increased 7% as compared to the same period in 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 $1.1 million into other charges (income) from other income
statement categories for the three months ended June 30, 2017 to be consistent with the 2018
presentation.
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
Three months ended Three months ended
June 30, 2018 % of sales June 30, 2017 % of sales
------------- ---------- ------------- ----------
Earnings before taxes $143,602 $126,847
Amortization 11,970 10,249
Interest expense 8,309 8,171
Restructuring charges 7,321 4,023
Other charges (income), net (1,916) (1,884) (b)
Adjusted operating income $169,286 (c) 23.4 $147,406 22.6
======== ========
Note:
(c) Adjusted operating income increased 15% as compared to the same period in 2017.
METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share data)
(unaudited)
Six months ended Six months ended
June 30, 2018 % of sales June 30, 2017 % of sales
------------- ---------- ------------- ----------
Net sales $1,382,817 (a) 100.0 $1,248,223 100.0
Cost of sales 595,259 43.0 529,222 (b) 42.4
------- ---- ------- ----
Gross profit 787,558 57.0 719,001 57.6
Research and development 70,028 5.1 63,782 (b) 5.1
Selling, general and
administrative 408,698 29.6 381,280 (b) 30.5
Amortization 23,705 1.7 20,294 1.6
Interest expense 16,668 1.2 15,912 1.3
Restructuring charges 11,734 0.8 5,455 0.4
Other charges (income), net (4,316) (0.3) (8,417) (b)(c) (0.6)
------ ---- ------ ----
Earnings before taxes 261,041 18.9 240,695 19.3
Provision for taxes 56,269 4.1 46,649 3.8
Net earnings $204,772 14.8 $194,046 15.5
======== ==== ======== ====
Basic earnings per common
share:
Net earnings $8.07 $7.51
Weighted average number of
common shares 25,383,402 25,841,243
Diluted earnings per common
share:
Net earnings $7.88 $7.32
Weighted average number of
common 25,979,508 26,514,311
and common equivalent shares
Note:
(a) Local currency sales increased 6% as compared to the same period in 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 $1.9 million into other charges (income)
from other income statement categories for the six months ended June 30, 2017 to be
consistent with the 2018 presentation.
(c) Other charges (income), net includes a one-time gain of $3.4 million for the six months
ended June 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.
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
Six months ended Six months ended
June 30, 2018 % of sales June 30, 2017 % of sales
------------- ---------- ------------- ----------
Earnings before taxes $261,041 $240,695
Amortization 23,705 20,294
Interest expense 16,668 15,912
Restructuring charges 11,734 5,455
Other charges (income), net (4,316) (8,417) (b)(c)
Adjusted operating income $308,832 (d) 22.3 $273,939 21.9
======== ========
Note:
(d) Adjusted operating income increased 13% as compared to the same period in 2017.
METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
June 30, 2018 December 31, 2017
------------- -----------------
Cash and cash equivalents $183,190 $148,687
Accounts receivable, net 486,203 528,615
Inventories 270,047 255,390
Other current assets and
prepaid expenses 63,867 74,031
------ ------
Total current assets 1,003,307 1,006,723
Property, plant and
equipment, net 678,706 668,271
Goodwill and other
intangibles assets, net 756,265 766,556
Other non-current assets 119,938 108,255
Total assets $2,558,216 $2,549,805
========== ==========
Short-term borrowings and
maturities of long-term
debt $52,052 $19,677
Trade accounts payable 170,865 167,627
Accrued and other current
liabilities 465,900 502,369
------- -------
Total current liabilities 688,817 689,673
Long-term debt 1,020,420 960,170
Other non-current
liabilities 316,545 352,682
------- -------
Total liabilities 2,025,782 2,002,525
Shareholders' equity 532,434 547,280
Total liabilities and
shareholders' equity $2,558,216 $2,549,805
========== ==========
METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
Three months ended Six months ended
June 30, June 30,
-------- --------
2018 2017 2018 2017
---- ---- ---- ----
Cash flow from operating activities:
Net earnings $111,468 $101,580 $204,772 $194,046
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 9,449 7,953 18,606 15,919
Amortization 11,970 10,249 23,705 20,294
Deferred tax benefit (3,693) (2,264) (10,109) (3,840)
Other 3,951 4,211 7,036 4,629
Increase (decrease) in cash resulting from changes
in
operating assets and
liabilities 7,050 16,049 (27,251) (25,671)
Net cash provided by
operating activities 140,195 $137,778 $216,759 $205,377
------- -------- -------- --------
Cash flows from investing activities:
Proceeds from sale of
property, plant and
equipment 23 206 4,530 10,209
Purchase of property,
plant and equipment (31,812) (27,514) (61,586) (48,529)
Acquisitions - (697) (500) (697)
Net hedging settlements
on intercompany loans 3,738 (1,345) 7,042 (1,033)
Net cash used in
investing activities (28,051) (29,350) (50,514) (40,050)
------- ------- ------- -------
Cash flows from financing activities:
Proceeds from borrowings 266,668 200,189 603,180 672,921
Repayments of borrowings (171,410) (205,281) (502,524) (615,162)
Proceeds from exercise of
stock options 4,291 8,734 9,960 16,935
Repurchases of common
stock (118,749) (124,952) (237,499) (249,949)
Other financing
activities (1,635) (7,205) (1,635) (7,205)
Net cash used in
financing activities (20,835) (128,515) (128,518) (182,460)
------- -------- -------- --------
Effect of exchange rate
changes on cash and cash
equivalents (7,067) 1,528 (3,224) 4,793
Net increase (decrease)
in cash and cash
equivalents 84,242 (18,559) 34,503 (12,340)
Cash and cash equivalents:
Beginning of period 98,948 164,893 $148,687 158,674
End of period $183,190 $146,334 $183,190 $146,334
======== ======== ======== ========
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
Net cash provided by
operating activities $140,195 $137,778 $216,759 $205,377
Payments in respect of
restructuring activities 8,167 2,748 13,409 5,326
Transition tax payment 4,200 - 4,200 -
Proceeds from sale of
property, plant and
equipment 23 206 4,530 10,209
Purchase of property,
plant and equipment (31,812) (27,514) (61,586) (48,529)
Adjusted free cash flow $120,773 $113,218 $177,312 $172,383
======== ======== ======== ========
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 June 30, 2018 14% 4% 15% 10%
Six Months Ended June 30, 2018 13% 5% 16% 11%
Local Currency Sales Growth
Three Months Ended June 30, 2018 7% 4% 9% 7%
Six Months Ended June 30, 2018 3% 5% 10% 6%
RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS
(unaudited)
Three months ended Six months ended
June 30, June 30,
-------- --------
2018 2017 % Growth 2018 2017 % Growth
---- ---- -------- ---- ---- --------
EPS as reported, diluted $4.31 $3.84 12% $7.88 $7.32 8%
Restructuring charges, net of tax 0.22 (a) 0.12 (a) 0.35 (a) 0.16 (a)
Purchased intangible amortization, net of tax 0.10 (b) 0.06 (b) 0.19 (b) 0.11 (b)
Income tax expense 0.02 (c) (0.10) (c) (0.04) (c) (0.24) (c)
Gain on facility sale - - - (0.10) (d)
--- --- --- -----
Adjusted EPS, diluted $4.65 $3.92 19% $8.38 $7.25 16%
===== ===== ===== =====
Notes:
(a) Represents the EPS impact of restructuring charges of $7.3 million ($5.7 million after tax) and $4.0 million
($3.1 million after tax) for the three months ended June 30, 2018 and 2017, and $11.7 million ($9.2 million
after tax) and $5.5 million ($4.3 million after tax) for the six months ended June 30, 2018 and 2017,
respectively. Restructuring charges in 2018 primarily relates to employee and other costs associated with the
consolidation of facilities.
(b) Represents the EPS impact of purchased intangibles amortization, net of tax, of $2.5 million and $1.5 million
for the three months ended June 30, 2018 and 2017, and $5.0 million and $3.0 million for the six months ended
June 30, 2018 and 2017, respectively.
(c) Represents the EPS impact of the difference between our reported tax rate during the three and six months
ending June 30, 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 six months ended
June 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.
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SOURCE Mettler-Toledo International Inc.
