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METTLER-TOLEDO INTERNATIONAL INC. REPORTS SECOND QUARTER 2015 RESULTS - - Strong Margin Expansion - - COLUMBUS, Ohio, USA

Thursday, July 30, 2015 6 min read
Key Takeaway: METTLER-TOLEDO INTERNATIONAL INC. REPORTS SECOND QUARTER 2015 RESULTS - - Strong Margin Expansion - - COLUMBUS, Ohio, USA - July 30, 2015 - Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2015. Provided below are the highlights: Second

Full Press Release Details

METTLER-TOLEDO INTERNATIONAL INC. REPORTS
SECOND QUARTER 2015 RESULTS
- - Strong Margin Expansion - -
COLUMBUS, Ohio, USA - July 30, 2015 - Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2015. Provided below are the highlights:
Second Quarter Results
Olivier Filliol, President and Chief Executive Officer, stated, "Sales growth in the Americas and Europe was solid and we continue to execute well in these regions. Demand in China was weaker than expected, while Russia and Brazil also continue to face challenging market conditions. Our other emerging markets businesses performed very well in the quarter. We had very good margin expansion in the quarter and achieved good EPS growth despite currency headwinds to operating profit."
EPS in the quarter was $2.73, compared with the prior-year amount of $2.49. Adjusted EPS was $2.80, an increase of 9% over the prior-year amount of $2.57.
Sales were $582.1 million, a 3% increase in local currency sales, compared with $608.8 million in the prior-year quarter. Reported sales decreased 4% as currency reduced sales growth by 7% in the quarter. By region, local currency sales increased 5% in the Americas and 4% in Europe and were constant in Asia / Rest of World as compared to the prior-year period. Adjusted operating income amounted to $118.3 million, a 5% increase from the prior-year amount of $112.9 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 $105.2 million, compared with $108.1 million in the prior-year quarter.
EPS for the six months was $4.91, compared with the prior-year amount of $4.41. Adjusted EPS was $5.05, an increase of 11% over the prior-year amount of $4.56.
Sales were $1.118 billion, a 4% increase in local currency sales, compared with $1.159 billion in the prior-year period. Reported sales decreased 4%, as currency reduced sales growth by 8% in the period. By region, local currency sales increased 6% in the Americas, 3% in Europe and 2% in Asia / Rest of World as compared to the prior-year period. Adjusted operating income amounted to $215.6 million, a 6% increase from the prior-year amount of $203.9 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 $163.8 million, compared with $151.0 million in the prior-year period.
The Company updated its outlook for 2015 and noted that forecasting remains challenging due to continued uncertainty in demand in some markets and greater volatility in foreign exchange rates. Based on today's assessment, management anticipates that local currency sales growth in 2015 will be approximately 3%. Adjusted EPS is forecasted to be in the range of $12.75 to $12.90, an increase of 9% to 10%. This Adjusted EPS guidance remains the same as the Company's previously provided guidance.
The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in the third quarter of 2015 will be in the range of 2% to 3%. This sales growth is expected to result in Adjusted EPS in the range of $3.15 to $3.20, an increase of 7% to 8%.
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.
Filliol concluded, "We continue to execute well, however market conditions in certain emerging markets, most notably our China industrial business, remain stubbornly weak. We expect global market demand to largely remain in the current range for the remainder of this year. We believe our excellent product pipeline, proven success of our sales and marketing programs and growth potential from the expansion of our front-end resources position us well for above-market growth. We remain focused on our margin enhancement initiatives which will continue to drive earnings growth."
The Company will host a conference call to discuss its quarterly results today (Thursday, July 30) 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
June 30, 2015 % of sales June 30, 2014 % of sales
Net sales $ 582,057 (a) 100.0 $ 608,834 100.0
Cost of sales 259,145 44.5 280,658 46.1
Gross profit 322,912 55.5 328,176 53.9
Research and development 29,794 5.1 32,125 5.3
Selling, general and administrative 174,808 30.1 183,103 30.1
Amortization 7,634 1.3 7,283 1.2
Interest expense 6,942 1.2 5,956 1.0
Restructuring charges 1,720 0.3 1,905 0.3
Other charges (income), net (33 ) 0.0 406 0.0
Earnings before taxes 102,047 17.5 97,398 16.0
Provision for taxes 24,490 4.2 23,376 3.8
Net earnings $ 77,557 13.3 $ 74,022 12.2
Basic earnings per common share:
Net earnings $ 2.79 $ 2.55
Weighted average number of common shares 27,843,905 29,074,695
Diluted earnings per common share:
Net earnings 2.73 $ 2.49
Weighted average number of common and common equivalent shares 28,460,336 29,750,815
Note:
(a) Local currency sales increased 3% as compared to the same period in 2014.
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
Three Months Ended Three Months Ended
June 30, 2015 % of sales June 30, 2014 % of sales
Earnings before taxes $ 102,047 $ 97,398
Amortization 7,634 7,283
Interest expense 6,942 5,956
Restructuring charges 1,720 1,905
Other charges (income), net (33 ) 406
Adjusted operating income $ 118,310 (b) 20.3 $ 112,948 18.6
Note:
(b) Adjusted operating income increased 5% as compared to the same period in 2014.
METTLER-TOLEDO INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands except share data) (unaudited)
Six Months Ended Six Months Ended
June 30, 2015 % of sales June 30, 2014 % of sales
Net sales $ 1,117,758 (a) 100.0 $ 1,159,455 100.0
Cost of sales 496,041 44.4 538,638 46.5
Gross profit 621,717 55.6 620,817 53.5
Research and development 58,255 5.2 61,622 5.3
Selling, general and administrative 347,846 31.1 355,294 30.6
Amortization 15,162 1.4 14,377 1.2
Interest expense 13,667 1.2 11,622 1.0
Restructuring charges 2,627 0.2 3,397 0.3
Other charges (income), net (850 ) (0.1 ) 723 0.1
Earnings before taxes 185,010 16.6 173,782 15.0
Provision for taxes 44,402 4.0 41,709 3.6
Net earnings $ 140,608 12.6 $ 132,073 11.4
Basic earnings per common share:
Net earnings $ 5.03 $ 4.52
Weighted average number of common shares 27,978,814 29,221,647
Diluted earnings per common share:
Net earnings $ 4.91 $ 4.41
Weighted average number of common and common equivalent shares 28,611,637 29,918,456
Note:
(a) Local currency sales increased 4% as compared to the same period in 2014.
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
Six Months Ended Six Months Ended
June 30, 2015 % of sales June 30, 2014 % of sales
Earnings before taxes $ 185,010 $ 173,782
Amortization 15,162 14,377
Interest expense 13,667 11,622
Restructuring charges 2,627 3,397
Other charges (income), net (850 ) 723
Adjusted operating income $ 215,616 (b) 19.3 $ 203,901 17.6
Note:
(b) Adjusted operating income increased 6% as compared to the same period in 2014.
METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands) (unaudited)
June 30, 2015 December 31, 2014
Cash and cash equivalents $ 149,309 $ 85,263
Accounts receivable, net 402,404 435,648
Inventories 223,275 204,531
Other current assets and prepaid expenses 137,676 123,988
Total current assets 912,664 849,430
Property, plant and equipment, net 522,195 511,462
Goodwill and other intangible assets, net 552,138 556,869
Other non-current assets 109,952 91,349
Total assets $ 2,096,949 $ 2,009,110
Short-term borrowings and maturities of long-term debt $ 23,353 $ 116,164
Trade accounts payable 138,589 145,896
Accrued and other current liabilities 417,598 416,830
Total current liabilities 579,540 678,890
Long-term debt 605,141 335,790
Other non-current liabilities 258,017 274,835
Total liabilities 1,442,698 1,289,515
Shareholders' equity 654,251 719,595
Total liabilities and shareholders' equity $ 2,096,949 $ 2,009,110
METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) (unaudited)
Three months ended Six months ended
June 30, June 30,
2015 2014 2015 2014
Cash flow from operating activities:
Net earnings $ 77,557 $ 74,022 $ 140,608 $ 132,073
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 8,357 8,454 16,658 16,874
Amortization 7,634 7,283 15,162 14,377
Deferred tax benefit (1,011 ) (2,747 ) (2,681 ) (3,442 )
Excess tax benefits from share-based payment arrangements (837 ) (5,074 ) (1,278 ) (9,569 )
Other 3,590 3,339 7,070 6,577
Increase (decrease) in cash resulting from changes in
operating assets and liabilities 9,899 22,855 (11,754 ) (5,913 )
Net cash provided by operating activities 105,189 108,132 163,785 150,977
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment 85 107 127 296
Purchase of property, plant and equipment (17,384 ) (20,404 ) (35,923 ) (37,120 )
Acquisitions (100 ) (2,864 ) (300 ) (3,255 )
Net hedging settlements on intercompany loans (4,427 ) 154 (12,811 ) (81 )
Net cash used in investing activities (21,826 ) (23,007 ) (48,907 ) (40,160 )
Cash flows from financing activities:
Proceeds from borrowings 342,454 164,139 493,450 310,018
Repayments of borrowings (236,437 ) (163,382 ) (313,923 ) (256,611 )
Proceeds from exercise of stock options 8,192 5,582 17,738 9,032
Excess tax benefits from share-based payment arrangements 837 5,074 1,278 9,569
Repurchases of common stock (123,728 ) (101,480 ) (247,473 ) (183,978 )
Debt issuance costs (432 ) - (432 ) -
Acquisition contingent consideration paid (422 ) - (422 ) -
Net cash used in financing activities (9,536 ) (90,067 ) (49,784 ) (111,970 )
Effect of exchange rate changes on cash and cash equivalents 123 150 (1,048 ) 291
Net increase (decrease) in cash and cash equivalents 73,950 (4,792 ) 64,046 (862 )
Cash and cash equivalents:
Beginning of period 75,359 115,804 85,263 111,874
End of period $ 149,309 $ 111,012 $ 149,309 $ 111,012
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
Net cash provided by operating activities $ 105,189 $ 108,132 $ 163,785 $ 150,977
Excess tax benefits from share-based payment arrangements 837 5,074 1,278 9,569
Payments in respect of restructuring activities 1,216 2,817 2,022 5,958
Proceeds from sale of property, plant and equipment 85 107 127 296
Purchase of property, plant and equipment (17,384 ) (20,404 ) (35,923 ) (37,120 )
Free cash flow $ 89,943 $ 95,726 $ 131,289 $ 129,680
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, 2015 (13 )% 3 % (4 )% (4 )%
Six Months Ended June 30, 2015 (13 )% 4 % (2 )% (4 )%
Local Currency Sales Growth
Three Months Ended June 30, 2015 4 % 5 % 0 % 3 %
Six Months Ended June 30, 2015 3 % 6 % 2 % 4 %
RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS
(unaudited)
Three months ended Six months ended
June 30, June 30,
2015 2014 % Growth 2015 2014 % Growth
EPS as reported, diluted $ 2.73 $ 2.49 10% $ 4.91 $ 4.41 11%
Restructuring charges, net of tax 0.04 (a) 0.05 (a) 0.07 (a) 0.09 (a)
Purchased intangible amortization, net of tax 0.03 (b) 0.03 (b) 0.07 (b) 0.06 (b)
Adjusted EPS, diluted $ 2.80 $ 2.57 9% $ 5.05 $ 4.56 11%
Notes:
(a) Represents the EPS impact of restructuring charges of $1.7 million ($1.3 million after tax) and $1.9 million ($1.4 million after tax) for the three months ended June 30, 2015 and 2014, respectively and $2.6 million ($2.0 million after tax) and $3.4 million ($2.6 million after tax) for the six months ended June 30, 2015 and 2014, respectively, which primarily include employee related costs.
(b) Represents the EPS impact of purchased intangibles amortization, net of tax, of $0.9 million and $1.0 million for the three months ended June 30, 2014 and 2013, respectively and 1.9 million for both the six months ended June 30, 2015 and 2014, respectively.
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Last updated: Jul 30, 2015