Mettler-Toledo International Inc. Reports Fourth Quarter 2013 Results - KXNet.com - Bismarck/Minot/Williston/Dickinson-KXNEWS,ND

Mettler-Toledo International Inc. Reports Fourth Quarter 2013 Results

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SOURCE Mettler-Toledo International Inc.

- - Solid Earnings Growth - -

COLUMBUS, Ohio, Feb. 5, 2014 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results for 2013.  Provided below are the highlights:

  • Sales in local currency increased by 3% in the quarter compared with the prior year. Reported sales increased 4% which included a 1% benefit due to currency.
  • Net earnings per diluted share as reported (EPS) were $3.63, compared with $3.35 in the fourth quarter of 2012. Adjusted EPS was $3.82, an increase of 10% over the prior-year amount of $3.47. 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, "Results were solid in Europe and the Americas.  As expected, weaker demand in China was offset by better conditions in other regions within Asia / Rest of World.  We generated good EPS growth as we continue to benefit from our various margin improvement and cost control initiatives.  Finally, we are pleased with the strong cash flow generation in 2013."  

EPS in the fourth quarter was $3.63, compared with the prior-year amount of $3.35.  Adjusted EPS was $3.82, an increase of 10% over the prior-year amount of $3.47.  

Sales were $684.3 million, a 3% increase in local currency sales, compared with $657.3 million in the prior-year quarter.  Reported sales increased 4%, and included a 1% benefit due to currency in the quarter.  By region, local currency sales increased 2% in the Americas and 8% in Europe and were comparable to the prior year in  Asia / Rest of World.  Adjusted operating income amounted to $165.0 million, an 8% increase from the prior-year amount of $153.4 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 $108.5 million, compared with $111.7 million in the prior-year quarter.

Full Year Results

EPS in 2013 was $9.96, compared with the prior-year amount of $9.14.  Adjusted EPS was $10.58, an increase of 9% over the prior-year amount of $9.67.  

Sales were $2.379 billion, a 1% increase in local currency sales, compared with $2.342 billion in the prior-year period.  Reported sales growth was 2%, which included a 1% benefit due to currency.  By region, local currency sales increased 3% in both the Americas and Europe and decreased 4% in Asia / Rest of World.  Adjusted operating income amounted to $472.9 million, a 6% increase from the prior-year amount of $444.5 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 $345.9 million, compared with $327.7 million in the prior-year period.

Cost Control Measures

As part of previously announced cost control measures, the Company recorded pre-tax restructuring charges of $6.1 million in the quarter and $19.8 million for the full year of 2013.

Outlook 

The Company updated its outlook for 2014 and noted that continued uncertainty in demand in many markets makes forecasting difficult.  Based on today's assessment, management anticipates that local currency sales growth in 2014 will be in the range of 3% to 4% and Adjusted EPS in the range of $11.40 to $11.60, an increase of 8% to 10%.  This compares to previous guidance of Adjusted EPS in the range of $11.35 to $11.55.    

The Company stated that based on its assessment of market conditions today, management anticipates local currency sales growth in the first quarter of 2014 will be approximately 3%.  This sales growth will result in Adjusted EPS in the range of $1.93 to $1.98, an increase of 5% 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.   

Conclusion

Filliol concluded, "Market conditions appear to have stabilized in the developed world and we are cautiously optimistic for these regions in 2014.  Globally we continue to leverage our spinnaker sales and marketing programs to gain share and are selectively adding field resources to pursue additional growth opportunities.  We also continue to make significant investments for long-term growth through our investments in product development, Blue Ocean and other areas.  We remain confident in our long-term prospects."  

Other Matters

The Company will host a conference call to discuss its quarterly results today (Wednesday February 5) 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, 2013


% of sales


December 31, 2012


% of sales



















Net sales

$684,253

(a)

100.0


$657,292


100.0

Cost of sales

308,896


45.1


300,504


45.7

Gross profit

375,357


54.9


356,788


54.3










Research and development

30,597


4.5


28,001


4.3

Selling, general and administrative 

179,788


26.3


175,379


26.7

Amortization

6,935


1.0


5,586


0.8

Interest expense

6,211


0.9


5,667


0.9

Restructuring charges

6,100


0.9


5,426


0.8

Other charges (income), net

822


0.1


767


0.1

Earnings before taxes

144,904


21.2


135,962


20.7










Provision for taxes

34,742


5.1


31,329


4.8

Net earnings

$110,162


16.1


$104,633


15.9










Basic earnings per common share:








Net earnings 

$3.72




$3.43



Weighted average number of common shares

29,596,949




30,532,491












Diluted earnings per common share:








Net earnings 

$3.63




$3.35



Weighted average number of common and common equivalent shares

30,366,603




31,271,377
















Note:








(a)     Local currency sales increased 3% as compared to the same period in 2012.












RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME












Three months ended




Three months ended





December 31, 2013


% of sales


December 31, 2012


% of sales










Earnings before taxes

$144,904




$135,962



Amortization

6,935




5,586



Interest expense

6,211

(b)



5,667



Restructuring charges

6,100




5,426



Other charges (income), net

822




767



Adjusted operating income 

$164,972

(c)

24.1


$153,408


23.3










Note:








(b)

Includes a $0.4 million charge associated with the termination of the Company's $880 million Credit Agreement, which was replaced with the Company's new $800 million Credit Agreement during the three months ended December 31, 2013.

(c)

Adjusted operating income increased 8% as compared to the same period in 2012.

 

 


METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)












Twelve months ended




Twelve months ended





December 31, 2013


% of sales


December 31, 2012


% of sales



















Net sales

$2,378,972

(a)

100.0


$2,341,528


100.0

Cost of sales

1,096,946


46.1


1,100,473


47.0

Gross profit

1,282,026


53.9


1,241,055


53.0










Research and development

116,346


4.9


112,530


4.8

Selling, general and administrative 

692,788


29.1


684,026


29.2

Amortization

24,539


1.0


21,357


0.9

Interest expense

22,711


1.0


22,764


1.0

Restructuring charges

19,830


0.8


16,687


0.7

Other charges (income), net

3,103


0.2


1,090


0.1

Earnings before taxes

402,709


16.9


382,601


16.3










Provision for taxes

96,615


4.0


91,754


3.9

Net earnings

$306,094


12.9


$290,847


12.4










Basic earnings per common share:








Net earnings 

$10.22




$9.37



Weighted average number of common shares

29,945,954




31,044,532












Diluted earnings per common share:








Net earnings 

$9.96




$9.14



Weighted average number of common and common equivalent shares

30,728,482










31,824,077












Note:








(a)     Local currency sales increased 1% as compared to the same period in 2012.












RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME












Twelve months ended




Twelve months ended





December 31, 2013


% of sales


December 31, 2012


% of sales










Earnings before taxes

$402,709




$382,601



Amortization

24,539




21,357



Interest expense

22,711

(b)



22,764



Restructuring charges

19,830




16,687



Other charges (income), net

3,103




1,090



Adjusted operating income 

$472,892

(c)

19.9


$444,499


19.0










Note:








(b)

Includes a $0.4 million charge associated with the termination of the Company's $880 million Credit Agreement, which was replaced with the Company's new $800 million Credit Agreement during the twelve months ended December 31, 2013.

(c)

Adjusted operating income increased 6% as compared to the same period in 2012.

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)










December 31, 2013


December 31, 2012





Cash and cash equivalents

$111,874


$101,702

Accounts receivable, net

466,703


437,390

Inventories

210,414


198,939

Other current assets and prepaid expenses

124,996


126,206

Total current assets

913,987


864,237





Property, plant and equipment, net

514,438


469,421

Goodwill and other intangible assets, net

570,260


569,915

Other non-current assets

154,134


118,715

Total assets

$2,152,819


$2,022,288





Short-term borrowings and maturities of long-term debt

$17,067


$41,600

Trade accounts payable

145,993


142,362

Accrued and other current liabilities

401,128


378,032

Total current liabilities

564,188


561,994





Long-term debt

395,960


347,131

Other non-current liabilities

257,619


285,944

Total liabilities

1,217,767


1,195,069





Shareholders' equity

935,052


827,219

Total liabilities and shareholders' equity

$2,152,819


$2,022,288

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)












Three months ended


Twelve months ended



December 31,


December 31,



2013


2012


2013


2012










Cash flow from operating activities:








    Net earnings

$      110,162


$      104,633


$      306,094


$      290,847

    Adjustments to reconcile net earnings to net cash provided by operating activities:








Depreciation

8,741


9,143


34,765


33,421

Amortization

6,935


5,586


24,539


21,357

Deferred tax benefit

16,623


12,309


8,816


5,420

Excess tax benefits from share-based payment arrangements

(1,282)


(8,863)


(1,847)


(9,365)

Other

3,742


4,034


13,137


14,640

Increase (decrease) in cash resulting from changes in operating assets and liabilities

(36,408)


(15,116)


(39,576)


(28,616)

                Net cash provided by operating activities

108,513


111,726


345,928


327,704










Cash flows from investing activities:








    Proceeds from sale of property, plant and equipment

3


82


211


426

    Purchase of property, plant and equipment

(25,349)


(31,296)


(82,349)


(95,588)

    Acquisitions

(2,448)


-


(2,661)


(2,098)

                Net cash used in investing activities

(27,794)


(31,214)


(84,799)


(97,260)










Cash flows from financing activities:








    Proceeds from borrowings

173,954


150,632


556,059


445,425

    Repayments of borrowings

(162,033)


(178,165)


(531,045)


(563,109)

    Proceeds from exercise of stock options

3,755


5,741


19,745


21,927

    Excess tax benefits from share-based payment arrangements

1,282


8,863


1,847


9,365

    Repurchases of common stock 

(77,563)


(70,822)


(294,976)


(278,672)

    Debt issuance costs

(1,241)


(363)


(1,522)


(363)

    Acquisition contingent consideration paid

-


(325)


-


(325)

    Other financing activities

345


139


(1,224)


(645)

                Net cash used in financing activities

(61,501)


(84,300)


(251,116)


(366,397)










Effect of exchange rate changes on cash and cash equivalents

434


116


159


2,054










Net decrease in cash and cash equivalents

19,652


(3,672)


10,172


(133,899)










Cash and cash equivalents:








    Beginning of period

92,222


105,374


101,702


235,601

    End of period

$      111,874


$      101,702


$      111,874


$      101,702



















RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW










Net cash provided by operating activities

$      108,513


$      111,726


$      345,928


$      327,704

    Excess tax benefits from share-based payment arrangements

1,282


8,863


1,847


9,365

    Payments in respect of restructuring activities

4,756


4,354


18,949


12,591

    Proceeds from sale of property, plant and equipment

3


82


211


426

    Purchase of property, plant and equipment

(25,349)


(31,296)


(82,349)


(95,588)

Free cash flow

$        89,205


$        93,729


$      284,586


$      254,498

 

 


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, 2013

12%


1%


(2%)


4%




Twelve Months Ended December 31, 2013

6%


3%


(5%)


2%
















Local Currency Sales Growth











Three Months Ended December 31, 2013

8%


2%


0%


3%




Twelve Months Ended December 31, 2013

3%


3%


(4%)


1%





























RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)
















Three months ended 


Twelve months ended



December 31


December 31



2013


2012


%
Growth


2013


2012


%
Growth














EPS as reported, diluted

$3.63


$3.35


8%


$9.96


$9.14


9%














Restructuring charges, net of tax

0.15

(a)

0.13

(a)



0.49

(a)

0.39

(a)


Purchased intangible amortization, net of tax

0.03

(b)

0.03

(b)



0.12

(b)

0.14

(b)


Debt extinguishment and financing costs, net of tax

0.01

(c)

-




0.01

(c)

-



Benefit in Q4 of adjusting Q3 YTD tax rate

-


(0.04)

(d)



-


-
















Adjusted EPS, diluted

$3.82


$3.47


10%


$10.58


$9.67


9%














Notes:












(a)

Represents the EPS impact of restructuring charges of $6.1 million ($4.6 million after tax) and $5.4 million ($4.0 million after tax) for the three months ended December 31, 2013 and 2012, respectively and $19.8 million ($15.1 million after tax) and $16.7 million ($12.5 million after tax) for the twelve months ended December 31, 2013 and 2012, respectively.

(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 December 31, 2013 and 2012, respectively and $3.6 million and $4.5 million for the twelve months ended December 31, 2013 and 2012, respectively.

(c)

Represents the EPS impact of costs associated with the termination of the Company's $880 million Credit Agreement that was replaced with the Company's new $800 million Credit Agreement totaling $0.4 million ($0.3 million after tax) for the three and twelve months ended December 31, 2013.

(d)

Represents the EPS impact of adjusting the annual effective tax rate from 24.5% to 24% during the three months ended December 31, 2012, related to the nine months ended September 30, 2012.

 

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