mtd-20220930

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022, OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ________________

Commission File Number: 1-13595

Mettler Toledo International Inc

_______________________________________________________________________________________________________________________________________

(Exact name of registrant as specified in its charter)


Delaware						13-3668641
(State or other jurisdiction of						(I.R.S Employer Identification No.)
incorporation or organization)

1900 Polaris Parkway

Columbus, OH 43240

and

Im Langacher, P.O. Box MT-100

CH 8606 Greifensee, Switzerland

1-614-438-4511 and +41-44-944-22-11

________________________________________________________________________________

(Registrant's telephone number, including area code)

not applicable

______________________________________________________________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	MTD	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer. ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The Registrant had 22,294,189 shares of Common Stock outstanding at September 30, 2022.

METTLER-TOLEDO INTERNATIONAL INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q


		PAGE
	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Unaudited Interim Consolidated Financial Statements:

	Interim Consolidated Statements of Operations and Comprehensive Income for the three months ended Septem ber 30, 2022 and 2021	3

	Interim Consolidated Statements of Operations and Comprehensive Income for the nine months ended September 30, 2022 and 2021	4

	Interim Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	5

	Interim Consolidated Statements of Shareholders’ Equity for the nine months ended September 30, 2022 and 2021	6

	Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	7

	Notes to the Interim Consolidated Financial Statements at September 30, 2022	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults upon Senior Securities	34

Item 5.	Other Information	34

Item 6.	Exhibits	34

SIGNATURE		36

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

METTLER-TOLEDO INTERNATIONAL INC.

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Three months ended September 30, 2022 and 2021

(In thousands, except share data)

(unaudited)


	September 30, 2022		September 30, 2021
Net sales
Products	$	783,986	$	760,844
Service	201,860		191,106
Total net sales	985,846		951,950
Cost of sales
Products	305,337		304,290
Service	95,853		91,840
Gross profit	584,656		555,820
Research and development	44,129		42,276
Selling, general and administrative	233,357		240,734
Amortization	16,728		16,039
Interest expense	14,484		11,791
Restructuring charges	2,022		650
Other charges (income), net	(1,949)		(3,257)
Earnings before taxes	275,885		247,587
Provision for taxes	55,288		43,899
Net earnings	$	220,597	$	203,688

Basic earnings per common share:
Net earnings	$	9.85	$	8.83
Weighted average number of common shares	22,403,393		23,056,924

Diluted earnings per common share:
Net earnings	$	9.76	$	8.71
Weighted average number of common and common equivalent shares	22,610,027		23,393,579

Comprehensive income, net of tax (Note 9)	$	178,448	$	208,428

The accompanying notes are an integral part of these interim consolidated financial statements.

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METTLER-TOLEDO INTERNATIONAL INC.

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Nine months ended September 30, 2022 and 2021

(In thousands, except share data)

(unaudited)


	September 30, 2022		September 30, 2021
Net sales
Products	$	2,270,845	$	2,124,245
Service	591,179		556,446
Total net sales	2,862,024		2,680,691
Cost of sales
Products	902,445		843,613
Service	283,677		272,658
Gross profit	1,675,902		1,564,420
Research and development	131,180		124,151
Selling, general and administrative	710,875		701,531
Amortization	49,697		46,141
Interest expense	38,587		31,701
Restructuring charges	7,803		2,719
Other charges (income), net	(7,818)		(5,208)
Earnings before taxes	745,578		663,385
Provision for taxes	138,910		125,271
Net earnings	$	606,668	$	538,114

Basic earnings per common share:
Net earnings	$	26.86	$	23.19
Weighted average number of common shares	22,587,026		23,203,257

Diluted earnings per common share:
Net earnings	$	26.58	$	22.86
Weighted average number of common and common equivalent shares	22,821,408		23,536,615

Comprehensive income, net of tax (Note 9)	$	537,378	$	575,187

The accompanying notes are an integral part of these interim consolidated financial statements.

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METTLER-TOLEDO INTERNATIONAL INC.

INTERIM CONSOLIDATED BALANCE SHEETS

As of September 30, 2022 and December 31, 2021

(In thousands, except share data)

(unaudited)


	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	122,136	$	98,564
Trade accounts receivable, less allowances of $22,094 at September 30, 2022
and $22,176 at December 31, 2021	611,399		647,335
Inventories	451,320		414,543
Other current assets and prepaid expenses	131,047		108,916
Total current assets	1,315,902		1,269,358
Property, plant and equipment, net	728,602		799,365
Goodwill	636,089		648,622
Other intangible assets, net	297,435		307,450
Deferred tax assets, net	34,986		39,496
Other non-current assets	281,446		262,507
Total assets	$	3,294,460	$	3,326,798
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	226,681	$	272,911
Accrued and other liabilities	202,039		208,811
Accrued compensation and related items	184,773		236,265
Deferred revenue and customer prepayments	198,179		192,648
Taxes payable	199,626		134,769
Short-term borrowings and current maturities of long-term debt	153,639		101,134
Total current liabilities	1,164,937		1,146,538
Long-term debt	1,825,253		1,580,808
Deferred tax liabilities, net	76,532		62,230
Other non-current liabilities	310,547		365,801
Total liabilities	3,377,269		3,155,377
Commitments and contingencies (Note 14)
Shareholders’ equity:
Preferred stock, $0.01 par value per share; authorized 10,000,000 shares	—		—
Common stock, $0.01 par value per share; authorized 125,000,000 shares;
issued 44,786,011 and 44,786,011 shares; outstanding 22,294,189 shares and
22,843,103 shares at September 30, 2022 and December 31, 2021, respectively	448		448
Additional paid-in capital	842,421		825,974
Treasury stock at cost (22,491,822 shares at September 30, 2022 and 21,942,908 shares at December 31, 2021)	(7,064,513)		(6,259,049)
Retained earnings	6,463,349		5,859,272
Accumulated other comprehensive loss	(324,514)		(255,224)
Total shareholders' equity	(82,809)		171,421
Total liabilities and shareholders’ equity	$	3,294,460	$	3,326,798

The accompanying notes are an integral part of these interim consolidated financial statements.

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METTLER-TOLEDO INTERNATIONAL INC.

INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Nine months ended September 30, 2022 and 2021

(In thousands, except share data)

(unaudited)


				Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)
	Common Stock					Treasury Stock		Retained Earnings
	Shares	Amount										Total
Balance at December 31, 2020	23,471,841	$	448	$	805,140	$	(5,283,584)	$	5,095,596	$	(334,925)	$	282,675
Exercise of stock options and restricted stock units	22,388	—		1,239		4,682		(872)		—		5,049
Repurchases of common stock	(224,808)	—		—		(262,500)		—		—		(262,500)
Share-based compensation	—	—		4,575		—		—		—		4,575
Net earnings	—	—		—		—		149,663		—		149,663
Other comprehensive income (loss), net of tax	—	—		—		—		—		23,181		23,181
Balance at March 31, 2021	23,269,421	$	448	$	810,954	$	(5,541,402)	$	5,244,387	$	(311,744)	$	202,643
Exercise of stock options and restricted stock units	13,248	—		—		2,849		(65)		—		2,784
Repurchases of common stock	(165,730)	—		—		(212,499)		—		—		(212,499)
Share-based compensation	—	—		4,581		—		—		—		4,581
Net earnings	—	—		—		—		184,763		—		184,763
Other comprehensive income (loss), net of tax	—	—		—		—		—		9,152		9,152
Balance at June 30, 2021	23,116,939	$	448	$	815,535	$	(5,751,052)	$	5,429,085	$	(302,592)	$	191,424
Exercise of stock options and restricted stock units	35,488	—		—		7,889		(808)		—		7,081
Repurchases of common stock	(166,772)	—		—		(252,499)		—		—		(252,499)
Share-based compensation	—	—		4,737		—		—		—		4,737
Net earnings	—	—		—		—		203,688		—		203,688
Other comprehensive income (loss), net of tax	—	—		—		—		—		4,740		4,740
Balance at September 30, 2021	22,985,655	$	448	$	820,272	$	(5,995,662)	$	5,631,965	$	(297,852)	$	159,171

Balance at December 31, 2021	22,843,103	$	448	$	825,974	$	(6,259,049)	$	5,859,272	$	(255,224)	$	171,421
Exercise of stock options and restricted stock units	27,795	—		1,020		6,669		(2,400)		—		5,289
Repurchases of common stock	(190,593)	—		—		(275,000)		—		—		(275,000)
Share-based compensation	—	—		4,509		—		—		—		4,509
Net earnings	—	—		—		—		174,001		—		174,001
Other comprehensive income (loss), net of tax	—	—		—		—		—		4,350		4,350
Balance at March 31, 2022	22,680,305	$	448	$	831,503	$	(6,527,380)	$	6,030,873	$	(250,874)	$	84,570
Exercise of stock options and restricted stock units	44,613	—		1,496		10,925		—		—		12,421
Repurchases of common stock	(218,308)	—		—		(274,999)		—		—		(274,999)
Share-based compensation	—	—		4,691		—		—		—		4,691
Net earnings	—	—		—		—		212,070		—		212,070
Other comprehensive income (loss), net of tax	—	—		—		—		—		(31,491)		(31,491)
Balance at June 30, 2022	22,506,610	$	448	$	837,690	$	(6,791,454)	$	6,242,943	$	(282,365)	$	7,262
Exercise of stock options and restricted stock units	8,058	—		—		1,941		(191)		—		1,750
Repurchases of common stock	(220,479)	—		—		(275,000)		—		—		(275,000)
Share-based compensation	—	—		4,731		—		—		—		4,731
Net earnings	—	—		—		—		220,597		—		220,597
Other comprehensive income (loss), net of tax	—	—		—		—		—		(42,149)		(42,149)
Balance at September 30, 2022	22,294,189	$	448	$	842,421	$	(7,064,513)	$	6,463,349	$	(324,514)	$	(82,809)

The accompanying notes are an integral part of these interim consolidated financial statements.

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METTLER-TOLEDO INTERNATIONAL INC.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended September 30, 2022 and 2021

(In thousands)

(unaudited)


	September 30, 2022		September 30, 2021
Cash flows from operating activities:
Net earnings	$	606,668	$	538,114
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	35,001		33,440
Amortization	49,697		46,141
Deferred tax benefit	(4,881)		(6,072)
Share-based compensation	13,931		13,893
Increase (decrease) in cash resulting from changes in:
Trade accounts receivable, net	(16,239)		(19,153)
Inventories	(78,574)		(87,568)
Other current assets	(14,509)		(3,596)
Trade accounts payable	(26,614)		44,170
Taxes payable	73,815		42,474
Accruals and other	(82,871)		65,876
Net cash provided by operating activities	555,424		667,719
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment	236		3,399
Purchase of property, plant and equipment	(89,213)		(69,796)
Proceeds from government funding	28,670		—
Acquisitions	(25,588)		(193,387)
Other investing activities	(3,463)		8,559
Net cash used in investing activities	(89,358)		(251,225)
Cash flows from financing activities:
Proceeds from borrowings	1,732,169		1,638,321
Repayments of borrowings	(1,348,152)		(1,249,177)
Proceeds from stock option exercises	19,460		14,914
Repurchases of common stock	(824,999)		(727,498)
Acquisition contingent consideration payment	(7,912)		—
Other financing activities	(1,172)		(2,864)
Net cash used in financing activities	(430,606)		(326,304)
Effect of exchange rate changes on cash and cash equivalents	(11,888)		(772)
Net increase (decrease) in cash and cash equivalents	23,572		89,418
Cash and cash equivalents:
Beginning of period	98,564		94,254
End of period	$	122,136	$	183,672

The accompanying notes are an integral part of these interim consolidated financial statements.

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In thousands, except share data, unless otherwise stated)

1.BASIS OF PRESENTATION

Mettler-Toledo International Inc. (Mettler-Toledo or the Company) is a leading global supplier of precision instruments and services. The Company manufactures weighing instruments for use in laboratory, industrial, packaging, logistics and food retailing applications. The Company also manufactures several related analytical instruments and provides automated chemistry solutions used in drug and chemical compound discovery and development. In addition, the Company manufactures metal detection and other end-of-line inspection systems used in production and packaging and provides solutions for use in certain process analytics applications. The Company's primary manufacturing facilities are located in China, Germany, Switzerland, the United Kingdom and the United States. The Company's principal executive offices are located in Columbus, Ohio and Greifensee, Switzerland.

The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include all entities in which the Company has control, which are its wholly-owned subsidiaries. The interim consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The accompanying interim consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. These financial statements were prepared using information reasonably available as of September 30, 2022 and through the date of this report. Actual results may differ from those estimates due to the uncertainty around the global economy, the magnitude and duration of the COVID-19 pandemic, the ongoing developments related to Ukraine, as well as other factors.

All intercompany transactions and balances have been eliminated.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Trade Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for expected credit losses represents the Company’s best estimate based on historical information, current information, and reasonable and supportable forecasts of future events and circumstances.

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In thousands, except share data, unless otherwise stated)

Inventories

Inventories are valued at the lower of cost or net realizable value. Cost, which includes direct materials, labor and overhead, is generally determined using the first in, first out (FIFO) method. The estimated net realizable value is based on assumptions for future demand and related pricing. Adjustments to the cost basis of the Company’s inventory are made for excess and obsolete items based on usage, orders and technological obsolescence. If actual market conditions are less favorable than those projected by management, reductions in the value of inventory may be required.

Inventories consisted of the following:


	September 30, 2022		December 31, 2021
Raw materials and parts	$	215,397	$	184,624
Work-in-progress	80,898		76,019
Finished goods	155,025		153,900
	$	451,320	$	414,543

Goodwill and Other Intangible Assets

Goodwill, representing the excess of purchase price over the net asset value of companies acquired, and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The annual evaluation for goodwill and indefinite-lived intangible assets are generally based on an assessment of qualitative factors to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount.

Other intangible assets include indefinite-lived assets and assets subject to amortization. Where applicable, amortization is charged on a straight-line basis over the expected period of benefit. The straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. The Company assesses the initial acquisition of intangible assets in accordance with the provisions of ASC 805 "Business Combinations" and the continued accounting for previously recognized intangible assets and goodwill in accordance with the provisions of ASC 350 "Intangible - Goodwill and Other" and ASC 360 "Property, Plant and Equipment".

Other intangible assets consisted of the following:


	September 30, 2022						December 31, 2021
	Gross Amount		Accumulated Amortization		Intangibles, Net		Gross Amount		Accumulated Amortization		Intangibles, Net
Customer relationships	$	289,709	$	(88,707)	$	201,002	$	282,470	$	(79,782)	$	202,688
Proven technology and patents	109,967		(60,200)		$	49,767	115,680		(56,305)		59,375
Tradenames (finite life)	7,490		(3,223)		$	4,267	8,206		(3,731)		4,475
Tradenames (indefinite life)	35,683		—		$	35,683	35,949		—		35,949
Other	13,242		(6,526)		$	6,716	10,641		(5,678)		4,963
	$	456,091	$	(158,656)	$	297,435	$	452,946	$	(145,496)	$	307,450

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In thousands, except share data, unless otherwise stated)

The Company recognized amortization expense associated with the above intangible assets of $6.7 million and $5.7 million for the three months ended September 30, 2022 and 2021, respectively, and $20.1 million and $15.9 million for the nine months ended September 30, 2022 and 2021, respectively. The annual aggregate amortization expense based on the current balance of other intangible assets is estimated to be $25.4 million for 2022, $23.6 million for 2023, $22.8 million for 2024, $21.9 million for 2025, $19.7 million for 2026, and $18.4 million for 2027. Purchased intangible amortization was $6.4 million, $5.0 million after tax, and $5.5 million, $4.1 million after tax, for the three months ended September 30, 2022 and 2021, respectively, and $19.4 million, $15.0 million after tax, and $15.2 million, $11.5 million after tax, for the nine months ended September 30, 2022 and 2021, respectively.

In addition to the above amortization, the Company recorded amortization expense associated with capitalized software of $10.0 million and $10.3 million for the three months ended September 30, 2022 and 2021, respectively, and $29.4 million and $30 million for the nine months ended September 30, 2022 and 2021, respectively.

Revenue Recognition

Product revenue is recognized from contracts with customers when a customer has obtained control of a product. The Company considers control to have transferred based upon shipping terms. To the extent the Company’s arrangements have a separate performance obligation, revenue related to any post-shipment performance obligation is deferred until completed. Shipping and handling costs charged to customers are included in total net sales and the associated expense is a component of cost of sales. Certain products are also sold through indirect distribution channels whereby the distributor assumes any further obligations to the end customer. Revenue is recognized on these distributor arrangements upon transfer of control to the distributor. Contracts do not contain variable pricing arrangements that are retrospective, except for rebate programs. Rebates are estimated based on expected sales volumes and offset against revenue at the time such revenue is recognized. The Company generally maintains the right to accept or reject a product return in its terms and conditions and also maintains appropriate accruals for outstanding credits. The related provisions for estimated returns and rebates are immaterial to the consolidated financial statements.

Certain of the Company’s product arrangements include separate performance obligations, primarily related to installation. Such performance obligations are accounted for separately when the deliverables have stand-alone value and the satisfaction of the undelivered performance obligations is probable and within the Company's control. The allocation of revenue between the performance obligations is based on the observable stand-alone selling prices at the time of the sale in accordance with a number of factors including service technician billing rates, time to install, and geographic location.

Software is generally not considered a distinct performance obligation with the exception of a few small software applications. The Company generally does not sell software products without the related hardware instrument as the software is embedded in the product. The Company’s products typically require no significant production, modification, or customization of the hardware or software that is essential to the functionality of the products.

Service revenue not under contract is recognized upon the completion of the service performed. Revenue from spare parts sold on a stand-alone basis is recognized when control is transferred to the customer, which is generally at the time of shipment or delivery. Revenue from service contracts is recognized ratably over the contract period using a time-based method. These contracts represent an obligation to perform repair and other services including regulatory compliance qualification, calibration, certification, and preventative maintenance on a customer’s pre-defined equipment over the contract period.

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In thousands, except share data, unless otherwise stated)

Employee Termination Benefits

In situations where contractual termination benefits exist, the Company records accruals for employee termination benefits when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable. All other employee termination arrangements are recognized and measured at their fair value at the communication date unless the employee is required to render additional service after the legal notification period, in which case the liability is recognized ratably over the future service period.

Share-Based Compensation

The Company recognizes share-based compensation expense within selling, general and administrative in the consolidated statements of operations and other comprehensive income with a corresponding offset to additional paid-in capital in the consolidated balance sheet. The Company recorded $4.7 million and $13.9 million of share-based compensation expense for the three and nine months ended September 30, 2022, respectively, compared to $4.7 million and $13.9 million for the corresponding periods in 2021.

Research and Development

Research and development costs primarily consist of salaries, consulting and other costs. The Company expenses these costs as incurred.

Business Combinations and Asset Acquisitions

The Company accounts for business acquisitions under the accounting standards for business combinations. The results of each acquisition are included in the Company's consolidated results as of the acquisition date. The purchase price of an acquisition is allocated to tangible and intangible assets and assumed liabilities based on their estimated fair values and any consideration in excess of the net assets acquired is recognized as goodwill. The determination of the values of the acquired assets and assumed liabilities, including goodwill and intangible assets, require significant judgment. Acquisition transaction costs are expensed when incurred.

In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the expected contingent payments as of the acquisition date. Subsequent changes in the fair value of the contingent consideration are recorded to other charges (income), net.

Recent Accounting Pronouncements

In March 2020 and January 2021, the FASB issued ASU 2020-04 and ASU 2021-01: Reference Rate Reform which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuance of LIBOR or another referenced rate. The guidance may be applied to any applicable contract entered into before December 31, 2022. The Company's interest rate and cross currency swaps, as mentioned in Note 4 to the consolidated financial statements, are governed by International Swaps and Derivatives Association ("ISDA") agreements, and the Company adheres to the ISDA's fallback protocol when LIBOR is discontinued. In addition, the Company renewed the LIBOR based credit agreement, as discussed further in Note 10 of the Annual Report Form 10-K, which includes a fallback protocol when LIBOR is discontinued. Based on these procedures, when LIBOR is discontinued the interest rate and cross currency swaps will not require de-designation if certain criteria are met. The Company expects the financial impact of the rate change when LIBOR is discontinued to be immaterial to its financial statements.

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In thousands, except share data, unless otherwise stated)

3.REVENUE

The Company disaggregates revenue from contracts with customers by product, service, timing of revenue recognition and geography. A summary of revenue by the Company’s reportable segments for the three and nine months ended September 30, 2022 and 2021 follows:


For the three months ended September 30, 2022	U.S. Operations		Swiss Operations		Western European Operations		Chinese Operations		Other Operations		Total
Product Revenue	$	287,948	$	32,366	$	129,089	$	212,163	$	122,421	$	783,987
Service Revenue:
Point in time	65,596		6,401		29,071		13,543		30,248		144,859
Over time	20,220		2,205		22,799		4,016		7,760		57,000
Total	$	373,764	$	40,972	$	180,959	$	229,722	$	160,429	$	985,846


For the three months ended September 30, 2021	U.S. Operations		Swiss Operations		Western European Operations		Chinese Operations		Other Operations		Total
Product Revenue	$	263,885	$	33,612	$	142,318	$	193,727	$	127,302	$	760,844
Service Revenue:
Point in time	56,325		6,092		37,524		12,680		30,120		142,741
Over time	16,498		2,146		18,790		4,053		6,878		48,365
Total	$	336,708	$	41,850	$	198,632	$	210,460	$	164,300	$	951,950


For the nine months ended September 30, 2022	U.S. Operations		Swiss Operations		Western European Operations		Chinese Operations		Other Operations		Total
Product Revenue	$	816,193	$	99,567	$	404,060	$	593,283	$	357,742	$	2,270,845
Service Revenue:
Point in time	190,340		20,072		97,250		34,578		89,390		431,630
Over time	54,197		6,665		62,798		14,376		21,513		159,549
Total	$	1,060,730	$	126,304	$	564,108	$	642,237	$	468,645	$	2,862,024


For the nine months ended September 30, 2021	U.S. Operations		Swiss Operations		Western European Operations		Chinese Operations		Other Operations		Total
Product Revenue	$	721,744	$	95,797	$	424,904	$	525,855	$	355,945	$	2,124,245
Service Revenue:
Point in time	162,409		19,517		110,243		34,655		87,708		414,532
Over time	47,824		6,653		57,557		11,545		18,335		141,914
Total	$	931,977	$	121,967	$	592,704	$	572,055	$	461,988	$	2,680,691

A summary of revenue by major geographic destination for the three and nine months ended September 30 follows:


	Three Months Ended				Nine Months Ended
	2022		2021		2022		2021
Americas	$	408,207	$	367,278	$	1,154,602	$	1,024,033
Europe	228,145		258,925		720,667		760,491
Asia / Rest of World	349,494		325,747		986,755		896,167
Total	$	985,846	$	951,950	$	2,862,024	$	2,680,691

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METTLER-TOLEDO INTERNATIONAL INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In thousands, except share data, unless otherwise stated)

The Company's global revenue mix by product category is comprised of laboratory (56% of sales), industrial (39% of sales) and retail (5% of sales). The Company's product revenue by reportable segment is proportionately similar to the Company's global mix except the Company's Swiss Operations is largely comprised of laboratory products while the Company's Chinese Operations has a slightly higher percentage of industrial products. A summary of the Company’s revenue by product category for the three and nine months ended September 30 is as follows:


	Three Months Ended				Nine Months Ended
	2022		2021		2022		2021
Laboratory	$	555,112	$	536,489	$	1,614,586	$	1,487,222
Industrial	386,543		370,505		1,114,454		1,049,295
Retail	44,191		44,956		132,984		144,174
Total	$