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Mettler-Toledo International Inc. Reports Fourth Quarter 2011 Results
Published on Wednesday, 08 February 2012 16:17 Written by TradersHuddle Staff
COLUMBUS, Ohio, Feb. 8, 2012 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results for 2011. Provided below are the highlights:
- Sales in local currency increased by 8% in the quarter compared with the prior year. Reported sales increased 9%, which includes a 1% benefit from currency.
- Net earnings per diluted share as reported (EPS) were $2.91, compared with $2.41 in the fourth quarter of 2010. Adjusted EPS was $2.88, a 13% increase over the prior-year amount of $2.56. 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.
Fourth Quarter Results
Olivier Filliol, President and Chief Executive Officer, stated, "Sales growth was better-than-expected in almost all geographic regions, with demand in Asia continuing to be robust. We were pleased with this result especially given the strong sales in the prior year period. The benefit of a lower effective tax rate helped to offset the challenging currency headwinds we faced in the quarter, resulting in good EPS growth."
EPS was $2.91, compared with the prior-year amount of $2.41. Adjusted EPS was $2.88, an increase of 13% over the prior-year amount of $2.56.
Sales were $648.4 million, an 8% increase in local currency sales, compared with $592.8 million in the prior-year quarter. Reported sales growth was 9%, which included a 1% benefit from currency. By region, local currency sales increased 6% in Europe, 5% in the Americas and 16% in Asia / Rest of World. Adjusted operating income amounted to $131.7 million, a 5% increase from the prior-year amount of $125.3 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 $103.2 million, compared with $63.0 million in the prior-year quarter.
Full Year Results
EPS was $8.21, compared with the prior-year amount of $6.80. Adjusted EPS was $8.36, an increase of 20% over the prior-year amount of $6.94.
Sales were $2.309 billion, a 13% increase in local currency sales, compared with $1.968 billion in the prior year. Reported sales growth was 17%, which included a 4% benefit from currency. By region, local currency sales increased 11% in Europe, 9% in the Americas and 20% in Asia / Rest of World. Adjusted operating income amounted to $398.5 million, a 13% increase from the prior-year amount of $351.4 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 $280.9 million in 2011, compared with $268.3 million in the prior year.
Outlook
The Company updated its outlook for 2012. Based on today's assessment, management anticipates that local currency sales growth in 2012 will be in the range of 5% to 7% and Adjusted EPS in the range of $9.20 to $9.50, an increase of 10% to 14%. This compares with previous guidance of Adjusted EPS in the range of $9.00 to $9.30.
The Company stated that based on its assessment of market conditions today, management anticipates local currency sales growth in the first quarter 2012 will be in the range of 5% to 6% while Adjusted EPS will be in the range of $1.59 to $1.63, an increase of 10% to 12%.
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 had exceptional sales growth in 2011 due to healthy end markets and strong execution. We expect growth to continue in 2012, although at a lower rate than in 2011, given current economic conditions and tougher year-over-year comparisons. We are not immune to economic changes and will remain alert for signs of a downturn. We believe we are strongly positioned to grow faster than our underlying markets and continue to capture share. Continued investments in Spinnaker-related marketing, emerging markets and new product development are key drivers for sustainable long term growth. We remain confident in our strategic initiatives and ability to execute."
Other Matters
The Company will host a conference call to discuss its quarterly results today (Wednesday, February 8) 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 | |||||||||||
December 31, 2011 | % of sales | December 31, 2010 | % of sales | |||||||||
Net sales | $ 648,360 | (a) | 100.0 | $ 592,765 | 100.0 | |||||||
Cost of sales | 302,201 | 46.6 | 276,175 | 46.6 | ||||||||
Gross profit | 346,159 | 53.4 | 316,590 | 53.4 | ||||||||
Research and development | 30,115 | 4.6 | 26,466 | 4.5 | ||||||||
Selling, general and administrative | 184,368 | 28.4 | 164,807 | 27.8 | ||||||||
Amortization | 5,066 | 0.8 | 4,229 | 0.7 | ||||||||
Interest expense | 5,930 | 1.0 | 5,300 | 0.9 | ||||||||
Restructuring charges | 3,081 | 0.5 | 2,390 | 0.4 | ||||||||
Other charges (income), net | 95 | 0.0 | 3,307 | 0.5 | ||||||||
Earnings before taxes | 117,504 | 18.1 | 110,091 | 18.6 | ||||||||
Provision for taxes | 23,222 | 3.6 | 29,239 | 5.0 | ||||||||
Net earnings | $ 94,282 | 14.5 | $ 80,852 | 13.6 | ||||||||
Basic earnings per common share: | ||||||||||||
Net earnings | $ 2.99 | $ 2.48 | ||||||||||
Weighted average number of common shares | 31,542,400 | 32,657,555 | ||||||||||
Diluted earnings per common share: | ||||||||||||
Net earnings | $ 2.91 | $ 2.41 | ||||||||||
Weighted average number of common | ||||||||||||
and common equivalent shares | 32,387,459 | 33,604,641 | ||||||||||
Note: | ||||||||||||
(a) | Local currency sales increased 8% as compared to the same period in 2010. | |||||||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME | ||||||||||||
Three months ended | Three months ended | |||||||||||
December 31, 2011 | % of sales | December 31, 2010 | % of sales | |||||||||
Earnings before taxes | $ 117,504 | $ 110,091 | ||||||||||
Amortization | 5,066 | 4,229 | ||||||||||
Interest expense | 5,930 | (b) | 5,300 | |||||||||
Restructuring charges | 3,081 | 2,390 | ||||||||||
Other charges (income), net | 95 | 3,307 | (c) | |||||||||
Adjusted operating income | $ 131,676 | (d) | 20.3 | $ 125,317 | 21.1 | |||||||
Note: | ||||||||||||
(b) | Includes a $0.3 million charge associated with the termination of the Company's $950 million Credit Agreement, which was replaced with the Company's new $870 million Credit Agreement during the three months ended December 31, 2011. | |||||||||||
(c) | Includes a $4.4 million charge associated with the sale of the Company's retail software business for in-store item and inventory management solutions and a $1.2 million benefit from unrealized contingent consideration from a previous acquisition during the three months ended December 31, 2010. | |||||||||||
(d) | Adjusted operating income increased 5% as compared to the same period in 2010. | |||||||||||
METTLER-TOLEDO INTERNATIONAL INC. | |||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
(amounts in thousands except share data) | |||||||||||||
(unaudited) | |||||||||||||
Twelve months ended | Twelve months ended | ||||||||||||
December 31, 2011 | % of sales | December 31, 2010 | % of sales | ||||||||||
Net sales | $ 2,309,328 | (a) | 100.0 | $ 1,968,178 | 100.0 | ||||||||
Cost of sales | 1,091,054 | 47.2 | 930,982 | 47.3 | |||||||||
Gross profit | 1,218,274 | 52.8 | 1,037,196 | 52.7 | |||||||||
Research and development | 116,139 | 5.0 | 97,028 | 4.9 | |||||||||
Selling, general and administrative | 703,632 | 30.5 | 588,726 | 29.9 | |||||||||
Amortization | 17,808 | 0.8 | 14,842 | 0.8 | |||||||||
Interest expense | 23,226 | 1.0 | 20,057 | 1.0 | |||||||||
Restructuring charges | 5,912 | 0.3 | 4,866 | 0.3 | |||||||||
Other charges (income), net | 2,380 | 0.1 | 4,164 | 0.2 | |||||||||
Earnings before taxes | 349,177 | 15.1 | 307,513 | 15.6 | |||||||||
Provision for taxes | 79,684 | 3.4 | 75,365 | 3.8 | |||||||||
Net earnings | $ 269,493 | 11.7 | $ 232,148 | 11.8 | |||||||||
Basic earnings per common share: | |||||||||||||
Net earnings | $ 8.45 | $ 6.98 | |||||||||||
Weighted average number of common shares | 31,897,779 | 33,280,463 | |||||||||||
Diluted earnings per common share: | |||||||||||||
Net earnings | $ 8.21 | $ 6.80 | |||||||||||
Weighted average number of common | |||||||||||||
and common equivalent shares | 32,839,365 | 34,140,097 | |||||||||||
Note: | |||||||||||||
(a) | Local currency sales increased 13% compared to the same period in 2010. | ||||||||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME | |||||||||||||
Twelve months ended | Twelve months ended | ||||||||||||
December 31, 2011 | % of sales | December 31, 2010 | % of sales | ||||||||||
Earnings before taxes | $ 349,177 | $ 307,513 | |||||||||||
Amortization | 17,808 | 14,842 | |||||||||||
Interest expense | 23,226 | (b) | 20,057 | ||||||||||
Restructuring charges | 5,912 | 4,866 | |||||||||||
Other charges (income), net | 2,380 | 4,164 | (c) | ||||||||||
Adjusted operating income | $ 398,503 | (d) | 17.3 | $ 351,442 | 17.9 | ||||||||
Note: | |||||||||||||
(b) | Includes a $0.3 million charge associated with the termination of the Company's $950 million Credit Agreement, which was replaced with the Company's new $870 million Credit Agreement during the twelve months ended December 31, 2011. | ||||||||||||
(c) | Includes a $4.4 million charge associated with the sale of the Company's retail software business for in-store item and inventory management solutions and a $1.2 million benefit from unrealized contingent considerations from a previous acquisition during the twelve months ended December 31, 2010. | ||||||||||||
(d) | Adjusted operating income increased 13% compared to the same period in 2010. | ||||||||||||
METTLER-TOLEDO INTERNATIONAL INC. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(amounts in thousands) | ||||||
(unaudited) | ||||||
December 31, 2011 | December 31, 2010 | |||||
Cash and cash equivalents | $ 235,601 | $ 447,577 | ||||
Accounts receivable, net | 425,147 | 368,936 | ||||
Inventories | 241,421 | 217,104 | ||||
Other current assets and prepaid expenses | 116,694 | 111,278 | ||||
Total current assets | 1,018,863 | 1,144,895 | ||||
Property, plant and equipment, net | 410,007 | 364,472 | ||||
Goodwill and other intangibles assets, net | 569,153 | 539,071 | ||||
Other non-current assets | 205,451 | 234,625 | ||||
Total assets | $ 2,203,474 | $ 2,283,063 | ||||
Short-term borrowings and maturities of long-term debt | $ 28,300 | $ 10,902 | ||||
Trade accounts payable | 168,109 | 138,105 | ||||
Accrued and other current liabilities | 413,435 | 393,179 | ||||
Total current liabilities | 609,844 | 542,186 | ||||
Long-term debt | 476,715 | 670,301 | ||||
Other non-current liabilities | 335,778 | 298,992 | ||||
Total liabilities | 1,422,337 | 1,511,479 | ||||
Shareholders' equity | 781,137 | 771,584 | ||||
Total liabilities and shareholders' equity | $ 2,203,474 | $ 2,283,063 | ||||
METTLER-TOLEDO INTERNATIONAL INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(amounts in thousands) | |||||||||
(unaudited) | |||||||||
Three months ended | Twelve months ended | ||||||||
December 31, | December 31, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Cash flow from operating activities: | |||||||||
Net earnings | $ 94,282 | $ 80,852 | $ 269,493 | $ 232,148 | |||||
Adjustments to reconcile net earnings to | |||||||||
net cash provided by operating activities: | |||||||||
Depreciation | 8,319 | 7,425 | 31,689 | 29,686 | |||||
Amortization | 5,066 | 4,229 | 17,808 | 14,842 | |||||
Deferred tax provision | 14,771 | 11,450 | 5,018 | 4,058 | |||||
Excess tax benefits from share-based payment arrangements | (6,353) | (5,607) | (12,612) | (9,017) | |||||
Other | 3,485 | 6,687 | 11,746 | 15,884 | |||||
Increase (decrease) in cash resulting from changes in | |||||||||
operating assets and liabilities | (16,354) | (42,027) | (42,262) | (19,322) | |||||
Net cash provided by operating activities | 103,216 | 63,009 | 280,880 | 268,279 | |||||
Cash flows from investing activities: | |||||||||
Proceeds from sale of property, plant and equipment | 83 | 193 | 2,485 | 350 | |||||
Purchase of property, plant and equipment | (33,994) | (35,379) | (98,500) | (73,943) | |||||
Acquisitions | (711) | (507) | (35,373) | (13,064) | |||||
Proceeds from divestitures | - | 9,750 | - | 9,750 | |||||
Other investing activities | - | (108) | (903) | (108) | |||||
Net cash used in investing activities | (34,622) | (26,051) | (132,291) | (77,015) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from borrowings | 403,606 | 620,878 | 469,599 | 714,575 | |||||
Repayments of borrowings | (476,968) | (277,421) | (647,694) | (329,536) | |||||
Proceeds from exercise of stock options | 9,581 | 8,211 | 20,770 | 20,455 | |||||
Excess tax benefits from share-based payment arrangements | 6,353 | 5,607 | 12,612 | 9,017 | |||||
Repurchases of common stock | (33,399) | (91,204) | (204,578) | (239,998) | |||||
Debt issuance costs | (3,144) | - | (3,144) | - | |||||
Acquisition contingent consideration paid | - | - | (7,750) | - | |||||
Other financing activities | (173) | 351 | (284) | (6,590) | |||||
Net cash used in financing activities | (94,144) | 266,422 | (360,469) | 167,923 | |||||
Effect of exchange rate changes on cash and cash equivalents | (1,322) | 1,313 | (96) | 3,359 | |||||
Net (decrease) increase in cash and cash equivalents | (26,872) | 304,693 | (211,976) | 362,546 | |||||
Cash and cash equivalents: | |||||||||
Beginning of period | 262,473 | 142,884 | 447,577 | 85,031 | |||||
End of period | $ 235,601 | $ 447,577 | $ 235,601 | $ 447,577 | |||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||
Net cash provided by operating activities | $ 103,216 | $ 63,009 | $ 280,880 | $ 268,279 | |||||
Excess tax benefits from share-based payment arrangements | 6,353 | 5,607 | 12,612 | 9,017 | |||||
Payments in respect of restructuring activities | 2,194 | 2,184 | 6,297 | 11,067 | |||||
Proceeds from sale of property, plant and equipment | 83 | 193 | 2,485 | 350 | |||||
Purchase of property, plant and equipment | (33,994) | (35,379) | (98,500) | (73,943) | |||||
Free cash flow | $ 77,852 | $ 35,614 | $ 203,774 | $ 214,770 | |||||
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 December 31, 2011 | 7% | 5% | 19% | 9% | |||||||||
Twelve Months Ended December 31, 2011 | 18% | 9% | 26% | 17% | |||||||||
Local Currency Sales Growth | |||||||||||||
Three Months Ended December 31, 2011 | 6% | 5% | 16% | 8% | |||||||||
Twelve Months Ended December 31, 2011 | 11% | 9% | 20% | 13% | |||||||||
RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS | |||||||||||||
(unaudited) | |||||||||||||
Three months ended | Twelve months ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2011 | 2010 | % Growth | 2011 | 2010 | % Growth | ||||||||
EPS as reported, diluted | $ 2.91 | $ 2.41 | 21% | $ 8.21 | $ 6.80 | 21% | |||||||
Restructuring charges, net of tax | 0.07 | (a) | 0.05 | (a) | 0.13 | (a) | 0.11 | (a) | |||||
Purchased intangible amortization, net of tax | 0.03 | (b) | 0.03 | (b) | 0.12 | (b) | 0.11 | (b) | |||||
Debt extinguishment and financing costs, net of tax | 0.01 | (c) | - | 0.01 | (c) | - | |||||||
Benefit in Q4 of adjusting Q3 YTD tax rate | (0.14) | (d) | - | - | - | ||||||||
Discrete tax items | - | - | (0.11) | (e) | (0.15) | (e) | |||||||
Other items, net of tax | - | 0.07 | (f) | - | 0.07 | (f) | |||||||
Adjusted EPS, diluted | $ 2.88 | $ 2.56 | 13% | $ 8.36 | $ 6.94 | 20% | |||||||
Notes: | |||||||||||||
(a) | Represents the EPS impact of restructuring charges of $3.1 million ($2.3 million after tax) and $2.4 million ($1.8 million after tax) for the three months ended December 31, 2011 and 2010, respectively and $5.9 million ($4.4 million after tax) and $4.9 million ($3.6 million after tax) for the twelve months ended December 31, 2011 and 2010, respectively. | ||||||||||||
(b) | Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.1 million and $0.9 million for the three months ended December 31, 2011 and 2010, respectively and $4.1 million and $3.7 million for the twelve months ended December 31, 2011 and 2010, respectively. | ||||||||||||
(c) | Represents the EPS impact of costs associated with the termination of the Company's $950 million Credit Agreement that was replaced with the Company's new $870 million Credit Agreement totaling $0.3 million ($0.2 million after tax) for the three and twelve months ended December 31, 2011. | ||||||||||||
(d) | Represents the EPS impact during the three months ended December 31, 2011 of adjusting the estimated annual effective tax rate from 26% to 24%, or $4.8 million related to the nine months ended September 30, 2011. | ||||||||||||
(e) | Represents the EPS impact of discrete tax items of $3.8 million and $5.2 million for the twelve months ended December 31, 2011 and 2010, respectively, primarily related to the favorable resolution of certain prior year tax matters. | ||||||||||||
(f) | Represents the EPS impact of a charge of $4.4 million ($3.8 million after tax), associated with the sale of the Company's retail software business for in-store item and inventory management solutions, offset in part by a benefit from unrealized contingent consideration from a previous acquisition of $1.2 million ($1.2 million after tax) for the three and twelve months ended December 31, 2010. | ||||||||||||
SOURCE Mettler-Toledo International Inc.
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