Date of Report (Date of earliest event reported): | July 27, 2017 |
Delaware | File No. 001-13595 | 13-3668641 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1900 Polaris Parkway Columbus, OH and Im Langacher, P.O. Box MT-100 CH Greifensee, Switzerland | 43240 and 8606 | |
(Address of principal executive offices) | (Zip Code) |
(Former name or former address, if changed since last report.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
• | It does not include interest expense. Because Mettler-Toledo has borrowed money to finance some of its operations, interest is a necessary and ongoing part of its costs and has assisted Mettler-Toledo in generating revenue. Therefore any measure that excludes interest expense has material limitations. | |
• | It excludes amortization expense. Because this item is recurring, any measure that excludes amortization expense has material limitations. | |
• | It excludes other charges (income), net. Because other charges (income), net is a component of operating income under U.S. GAAP, any measure that excludes other charges (income), net, has material limitations. | |
• | It excludes restructuring charges. Because restructuring charges are a component of operating income under U.S. GAAP, any measure that excludes restructuring charges, has material limitations. |
• | It includes proceeds from the sale of property, plant and equipment and purchases of property, plant and equipment, which are not considered to be components of net cash provided by operating activities under U.S. GAAP. Therefore any measure that includes proceeds from the sale of property, plant and equipment and purchases of property, plant and equipment has material limitations. | |
• | It excludes restructuring payments, which is considered to be a component of net cash provided by operating activities under U.S. GAAP. Therefore any measure that excludes these items has material limitations. |
Exhibit No. | Description | |||
99.1 | Press release, dated July 27, 2017 issued by Mettler-Toledo International Inc. |
METTLER-TOLEDO INTERNATIONAL INC. | ||||
Dated: | July 27, 2017 | By: | /s/ Shawn P. Vadala | |
Shawn P. Vadala | ||||
Chief Financial Officer |
FOR IMMEDIATE RELEASE | Exhibit 99.1 |
• | Sales in local currency increased 10% in the quarter compared with the prior year. Reported sales increased 7% as currency reduced sales growth by 3% in the quarter. |
• | Net earnings per diluted share as reported (EPS) were $3.84, compared with $2.93 in the prior-year period. Adjusted EPS was $3.92, an increase of 22% over the prior-year amount of $3.22. Adjusted EPS is a non-GAAP measure and we have included a reconciliation to EPS on the last page of the attached schedules. |
METTLER-TOLEDO INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands except share data) (unaudited) | |||||||||||||
Three months ended | Three months ended | ||||||||||||
June 30, 2017 | % of sales | June 30, 2016 | % of sales | ||||||||||
Net sales | $ | 653,656 | (a) | 100.0 | $ | 608,286 | 100.0 | ||||||
Cost of sales | 278,739 | 42.6 | 260,710 | 42.9 | |||||||||
Gross profit | 374,917 | 57.4 | 347,576 | 57.1 | |||||||||
Research and development | 32,854 | 5.0 | 30,701 | 5.0 | |||||||||
Selling, general and administrative | 193,517 | 29.6 | 187,798 | 30.9 | |||||||||
Amortization | 10,249 | 1.6 | 8,655 | 1.4 | |||||||||
Interest expense | 8,171 | 1.3 | 6,872 | 1.1 | |||||||||
Restructuring charges | 4,023 | 0.6 | 2,205 | 0.4 | |||||||||
Other charges (income), net | (744 | ) | (0.1) | 8,173 | 1.3 | ||||||||
Earnings before taxes | 126,847 | 19.4 | 103,172 | 17.0 | |||||||||
Provision for taxes | 25,267 | 3.9 | 23,584 | 3.9 | |||||||||
Net earnings | $ | 101,580 | 15.5 | $ | 79,588 | 13.1 | |||||||
Basic earnings per common share: | |||||||||||||
Net earnings | $ | 3.94 | $ | 2.99 | |||||||||
Weighted average number of common shares | 25,751,374 | 26,631,015 | |||||||||||
Diluted earnings per common share: | |||||||||||||
Net earnings | $ | 3.84 | $ | 2.93 | |||||||||
Weighted average number of common and common equivalent shares | 26,439,529 | 27,143,284 | |||||||||||
Note: | |||||||||||||
(a) | Local currency sales increased 10% as compared to the same period in 2016. | ||||||||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME | |||||||||||||
Three months ended | Three months ended | ||||||||||||
June 30, 2017 | % of sales | June 30, 2016 | % of sales | ||||||||||
Earnings before taxes | $ | 126,847 | $ | 103,172 | |||||||||
Amortization | 10,249 | 8,655 | |||||||||||
Interest expense | 8,171 | 6,872 | |||||||||||
Restructuring charges | 4,023 | 2,205 | |||||||||||
Other charges (income), net | (744 | ) | 8,173 | (c) | |||||||||
Adjusted operating income | $ | 148,546 | (b) | 22.7 | $ | 129,077 | 21.2 | ||||||
Note: | |||||||||||||
(b) | Adjusted operating income increased 15% as compared to the same period in 2016. | ||||||||||||
(c) | Other charges (income), net included a one-time non-cash pension settlement charge of $8.2 million relate to a lump sum settlement to former employees of out U.S. pension plan for the three months ended June 30, 2016. |
METTLER-TOLEDO INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands except share data) (unaudited) | ||||||||||||||
Six months ended | Six months ended | |||||||||||||
June 30, 2017 | % of sales | June 30, 2016 | % of sales | |||||||||||
Net sales | $ | 1,248,223 | (a) | 100.0 | $ | 1,147,960 | 100.0 | |||||||
Cost of sales | 530,406 | 42.5 | 500,477 | 43.6 | ||||||||||
Gross profit | 717,817 | 57.5 | 647,483 | 56.4 | ||||||||||
Research and development | 64,246 | 5.1 | 59,674 | 5.2 | ||||||||||
Selling, general and administrative | 377,689 | 30.3 | 356,719 | 31.1 | ||||||||||
Amortization | 20,294 | 1.6 | 17,079 | 1.5 | ||||||||||
Interest expense | 15,912 | 1.3 | 13,452 | 1.2 | ||||||||||
Restructuring charges | 5,455 | 0.4 | 3,085 | 0.2 | ||||||||||
Other charges (income), net | (6,474 | ) | (0.5 | ) | 7,889 | 0.7 | ||||||||
Earnings before taxes | 240,695 | 19.3 | 189,585 | 16.5 | ||||||||||
Provision for taxes | 46,649 | 3.8 | 44,323 | 3.8 | ||||||||||
Net earnings | $ | 194,046 | 15.5 | $ | 145,262 | 12.7 | ||||||||
Basic earnings per common share: | ||||||||||||||
Net earnings | $ | 7.51 | $ | 5.42 | ||||||||||
Weighted average number of common shares | 25,841,243 | 26,781,154 | ||||||||||||
Diluted earnings per common share: | ||||||||||||||
Net earnings | $ | 7.32 | $ | 5.32 | ||||||||||
Weighted average number of common and common equivalent shares | 26,514,311 | 27,283,012 | ||||||||||||
Note: | ||||||||||||||
(a) | Local currency sales increased 11% as compared to the same period in 2016. | |||||||||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME | ||||||||||||||
Six months ended | Six months ended | |||||||||||||
June 30, 2017 | % of sales | June 30, 2016 | % of sales | |||||||||||
Earnings before taxes | $ | 240,695 | $ | 189,585 | ||||||||||
Amortization | 20,294 | 17,079 | ||||||||||||
Interest expense | 15,912 | 13,452 | ||||||||||||
Restructuring charges | 5,455 | 3,085 | ||||||||||||
Other charges (income), net | (6,474 | ) | (b) | 7,889 | (d) | |||||||||
Adjusted operating income | $ | 275,882 | (c) | 22.1 | $ | 231,090 | 20.1 | |||||||
Note: | ||||||||||||||
(b) | Other charges (income), net included 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. | |||||||||||||
(c) | Adjusted operating income increased 19% as compared to the same period in 2016. | |||||||||||||
(d) | Other charges (income), net included a one-time non-cash pension settlement charge of $8.2 million relate to a lump sum settlement to former employees of out U.S. pension plan for the six months ended June 30, 2016. |
METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands) (unaudited) | |||||||
June 30, 2017 | December 31, 2016 | ||||||
Cash and cash equivalents | $ | 146,334 | $ | 158,674 | |||
Accounts receivable, net | 448,098 | 454,988 | |||||
Inventories | 253,734 | 222,047 | |||||
Other current assets and prepaid expenses | 65,587 | 61,075 | |||||
Total current assets | 913,753 | 896,784 | |||||
Property, plant and equipment, net | 600,900 | 563,707 | |||||
Goodwill and other intangible assets, net | 647,891 | 643,433 | |||||
Other non-current assets | 85,406 | 62,853 | |||||
Total assets | $ | 2,247,950 | $ | 2,166,777 | |||
Short-term borrowings and maturities of long-term debt | $ | 21,608 | $ | 18,974 | |||
Trade accounts payable | 143,607 | 146,593 | |||||
Accrued and other current liabilities | 423,594 | 421,948 | |||||
Total current liabilities | 588,809 | 587,515 | |||||
Long-term debt | 947,781 | 875,056 | |||||
Other non-current liabilities | 249,441 | 269,263 | |||||
Total liabilities | 1,786,031 | 1,731,834 | |||||
Shareholders’ equity | 461,919 | 434,943 | |||||
Total liabilities and shareholders’ equity | $ | 2,247,950 | $ | 2,166,777 |
METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) (unaudited) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
June 30 | June 30 | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cash flow from operating activities: | |||||||||||||||
Net earnings | $ | 101,580 | $ | 79,588 | $ | 194,046 | $ | 145,262 | |||||||
Adjustments to reconcile net earnings to | |||||||||||||||
net cash provided by operating activities: | |||||||||||||||
Depreciation | 7,953 | 7,994 | 15,919 | 16,116 | |||||||||||
Amortization | 10,249 | 8,655 | 20,294 | 17,079 | |||||||||||
Deferred tax benefit | (2,264 | ) | (5,548 | ) | (3,840 | ) | (8,852 | ) | |||||||
Other | 4,211 | 3,569 | 8,023 | 7,148 | |||||||||||
Gain on facility sale | — | — | (3,394 | ) | — | ||||||||||
Non-cash pension settlement charge | — | 8,189 | — | 8,189 | |||||||||||
Increase (decrease) in cash resulting from changes in | |||||||||||||||
operating assets and liabilities | 16,049 | 18,425 | (25,671 | ) | (22,565 | ) | |||||||||
Net cash provided by operating activities | 137,778 | 120,872 | 205,377 | 162,377 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Proceeds from sale of property, plant and equipment (a) | 206 | 83 | 10,209 | 218 | |||||||||||
Purchase of property, plant and equipment | (27,514 | ) | (14,510 | ) | (48,529 | ) | (28,858 | ) | |||||||
Acquisitions | (697 | ) | - | (697 | ) | (4,329 | ) | ||||||||
Net hedging settlements on intercompany loans | (1,345 | ) | (1,053 | ) | (1,033 | ) | 1,075 | ||||||||
Net cash used in investing activities | (29,350 | ) | (15,480 | ) | (40,050 | ) | (31,894 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from borrowings | 200,189 | 163,147 | 672,921 | 392,560 | |||||||||||
Repayments of borrowings | (205,281 | ) | (145,217 | ) | (615,162 | ) | (269,684 | ) | |||||||
Proceeds from exercise of stock options | 8,734 | 8,056 | 16,935 | 13,965 | |||||||||||
Repurchases of common stock | (124,952 | ) | (124,997 | ) | (249,949 | ) | (249,997 | ) | |||||||
Other financing activities | (7,205 | ) | (555 | ) | (7,205 | ) | (680 | ) | |||||||
Net cash used in financing activities | (128,515 | ) | (99,566 | ) | (182,460 | ) | (113,836 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | 1,528 | (1,775 | ) | 4,793 | (888 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | (18,559 | ) | 4,051 | (12,340 | ) | 15,579 | |||||||||
Cash and cash equivalents: | |||||||||||||||
Beginning of period | 164,893 | 110,595 | 158,674 | 98,887 | |||||||||||
End of period | $ | 146,334 | $ | 114,646 | $ | 146,334 | $ | 114,646 | |||||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||||||
Net cash provided by operating activities | $ | 137,778 | $ | 120,872 | $ | 205,377 | $ | 162,377 | |||||||
Payments in respect of restructuring activities | 2,748 | 2,461 | 5,326 | 4,302 | |||||||||||
Proceeds from sale of property, plant and equipment | 206 | 83 | 10,209 | 218 | |||||||||||
Purchase of property, plant and equipment | (27,514 | ) | (14,510 | ) | (48,529 | ) | (28,858 | ) | |||||||
Free cash flow | $ | 113,218 | $ | 108,906 | $ | 172,383 | $ | 138,039 | |||||||
Notes: | |||||||||||||||
(a) Proceeds from sale of property, plant and equipment included $9.9 million relating to the sale of a facility in Switzerland in connection with our initiative to consolidate certain Swiss operations into a new facility for the six months ended June 30, 2017. |
METTLER-TOLEDO INTERNATIONAL INC. OTHER OPERATING STATISTICS | ||||||||||||||||||||
SALES GROWTH BY DESTINATION | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Europe | Americas | Asia/RoW | Total | |||||||||||||||||
U.S. Dollar Sales Growth (Decrease) | ||||||||||||||||||||
Three Months Ended June 30, 2017 | 1% | 9% | 13% | 7% | ||||||||||||||||
Six Months Ended June 30, 2017 | 4% | 11% | 10% | 9% | ||||||||||||||||
Local Currency Sales Growth (Decrease) | ||||||||||||||||||||
Three Months Ended June 30, 2017 | 4% | 10% | 15% | 10% | ||||||||||||||||
Six Months Ended June 30, 2017 | 8% | 12% | 12% | 11% | ||||||||||||||||
RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||
2017 | 2016 | % Growth | 2017 | 2016 | % Growth | |||||||||||||||
EPS as reported, diluted | $ | 3.84 | $ | 2.93 | 31% | $ | 7.32 | $ | 5.32 | 38% | ||||||||||
Restructuring charges, net of tax | 0.12 | (a) | 0.06 | (a) | 0.16 | (a) | 0.09 | (a) | ||||||||||||
Purchased intangible amortization, net of tax | 0.06 | (b) | 0.04 | (b) | 0.11 | (b) | 0.08 | (b) | ||||||||||||
Income tax expense | (0.10 | ) | (c) | — | (0.24 | ) | (c) | — | ||||||||||||
Gain on facility sale | — | (d) | — | (0.10 | ) | (d) | — | |||||||||||||
Non-cash pension settlement charge, net of tax | — | 0.19 | (e) | — | 0.19 | (e) | ||||||||||||||
Adjusted EPS, diluted | $ | 3.92 | $ | 3.22 | 22% | $ | 7.25 | $ | 5.68 | 28% | ||||||||||
Notes: | ||||||||||||||||||||
(a) | Represents the EPS impact of restructuring charges of $4.0 million ($3.1 million after tax) and $2.2 million ($1.7 million after tax) for the three months ended June 30, 2017 and 2016, and $5.5 million ($4.3 million after tax) and $3.1 million ($2.3 million after tax) for the six months ended June 30, 2017 and 2016, respectively, which primarily include employee related costs. | |||||||||||||||||||
(b) | Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.5 million and $1.0 million for the three month periods ended June 30, 2017 and 2016, and $3.0 million and $2.1 million for the six months ended June 30, 2017 and 2016, respectively. | |||||||||||||||||||
(c) | Represents the EPS impact of the difference between our reported tax rate of 20% and 19% during the three and six months ending June 30, 2017 and our estimated annual income tax rate of 22% pertaining 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. | |||||||||||||||||||
(e) | 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. |