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Mettler-Toledo International Inc. Reports Fourth Quarter 2017 Results
- - Good Sales Growth - -
- - Continued Strong Adjusted EPS Growth - -

COLUMBUS, Ohio, Feb. 8, 2018 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results for 2017.  Provided below are the highlights:

  • Sales in local currency increased 6% in the quarter compared with the prior year.  Reported sales increased 10% as currency increased sales growth by 4% in the quarter.
  • Net earnings per diluted share as reported (EPS) were $2.93, compared with $5.17 in the prior-year period.  Adjusted EPS was $5.97, an increase of 13% over the prior-year amount of $5.28.  EPS includes a $2.74 income tax charge related to the new U.S. tax legislation.  Adjusted EPS is a non-GAAP measure, and we have included a reconciliation to EPS on the last page of the attached schedules. 

Fourth Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "Sales growth in the quarter was good, with particularly strong broad-based growth in our Laboratory business.  Our productivity initiatives continue to generate positive results which contributed to another strong growth in Adjusted EPS."

EPS in the quarter was $2.93, compared with the prior-year amount of $5.17.  Adjusted EPS was $5.97, an increase of 13% over the prior-year amount of $5.28.  EPS includes a $2.74 income tax charge related to the new U.S. tax legislation.     

Sales were $778.0 million, a 6% increase in local currency sales, compared with $709.7 million in the prior-year quarter.  Reported sales increased 10% as currency increased sales growth by 4% in the quarter.  As compared with the prior year, local currency sales increased 9% in the Americas, 1% in Europe and 7% in Asia/Rest of World.  Adjusted operating income amounted to $217.8 million, a 9% increase from the prior-year amount of $200.2 million.  Adjusted operating income is a non-GAAP measure, and a reconciliation to earnings before taxes is provided in the attached schedules.

Full Year Results

EPS for 2017 was $14.24, compared with the prior-year amount of $14.22.  Adjusted EPS was $17.57, an increase of 19% over the prior-year amount of $14.80.  EPS includes a $2.73 income tax charge related to the new U.S. tax legislation.     

Sales were $2.725 billion, an 8% increase in local currency sales, compared with $2.508 billion in the prior-year period.  Reported sales increased 9% as currency increased sales growth by 1% in the period. 

As compared with the prior year, local currency sales increased 8% in the Americas, 5% in Europe and 11% in Asia/Rest of World.  Adjusted operating income amounted to $656.6 million, a 13% increase from the prior-year amount of $583.0 million.  Adjusted operating income is a non-GAAP measure, and a reconciliation to earnings before taxes is provided in the attached schedules.

Outlook 

The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in 2018 will be approximately 6%.  This sales growth is expected to result in Adjusted EPS in the range of $19.95 to $20.15, which reflects growth of 14% to 15%.  This compares to previous Adjusted EPS guidance of $19.65 to $19.85.   

Management anticipates that local currency sales growth in the first quarter 2018 will be approximately 5%, and Adjusted EPS is forecasted to be in the range of $3.65 to $3.70, an increase of 9% to 11%. 

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.  The Company noted in making its outlook that economic uncertainty remains in certain regions of the world and market conditions are subject to change.   

Conclusion

Filliol concluded, "Diligent execution of our strategic initiatives, supported by favorable economic conditions in all major regions of the world, resulted in excellent operating results in 2017.  We believe we are well positioned for further share gains with the benefit of our Spinnaker sales and marketing initiatives, excellent product pipeline, additional investments in sales resources and further use of sophisticated tools such as big data analytics to identify growth opportunities in our markets.  We expect our growth initiatives combined with our margin and productivity programs will generate strong operating results and provide the capacity for future growth investments."    

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, 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 (NYSE: MTD) is a leading global supplier of precision instruments and services. We have strong leadership positions in all of our businesses and believe we hold global number-one market positions in most of them. We are recognized as an innovation leader and our solutions are critical in key R&D, quality control, and manufacturing processes for customers in a wide range of industries including life sciences, food, and chemicals. Our sales and service network is one of the most extensive in the industry. Our products are sold in more than 140 countries and we have a direct presence in approximately 40 countries. With proven growth strategies and a focus on execution, we have achieved a long-term track record of strong financial performance. For more information, please visit www.mt.com.

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, 2017

 

% of sales

   

December 31, 2016

 

% of sales

 
                                       

Net sales

   

$778,031

 

(a)

 

100.0

       

$709,699

     

100.0

   

Cost of sales

   

322,812

     

41.5

       

291,089

     

41.0

   

Gross profit

   

455,219

     

58.5

       

418,610

     

59.0

   
                                       

Research and development

   

32,542

     

4.2

       

30,155

     

4.2

   

Selling, general and administrative 

   

204,860

     

26.3

       

188,223

     

26.5

   

Amortization

   

11,661

     

1.5

       

9,886

     

1.4

   

Interest expense

   

8,625

     

1.1

       

7,407

     

1.1

   

Restructuring charges

   

3,932

     

0.5

       

1,656

     

0.3

   

Other charges (income), net

   

(301)

     

(0.0)

       

(1)

     

(0.0)

   

Earnings before taxes

   

193,900

     

24.9

       

181,284

     

25.5

   
                                       

Provision for taxes

   

116,924

 

(b)

 

15.0

       

43,508

     

6.1

   

Net earnings

   

$76,976

     

9.9

       

$137,776

     

19.4

   
                                       

Basic earnings per common share:

                                   

Net earnings 

   

$3.01

               

$5.27

           

Weighted average number of common shares

   

25,562,542

               

26,139,024

           
                                       

Diluted earnings per common share:

                                   

Net earnings 

   

$2.93

               

$5.17

           

Weighted average number of common 

   

26,229,052

               

26,631,269

           

  and common equivalent shares

                                   
                                       

Note:

                                   

(a)

Local currency sales increased 6% as compared to the same period in 2016.

   

(b)

Provision for taxes for the three months ended December 31, 2017 includes a provisional one-time charge of $72 million for the implementation of the Tax Cuts and Jobs Act. Of this amount, $59 million is expected to paid over a period of up to eight years.  The estimated charge may change with the finalization of implementation.

   
                                       
                                       

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

                                       
     

 

Three months ended

           

 

 

Three months ended

         
     

December 31, 2017

 

% of sales

   

December 31, 2016

 

% of sales

 
                                       

Earnings before taxes

   

$193,900

               

$181,284

           

Amortization

   

11,661

               

9,886

           

Interest expense

   

8,625

               

7,407

           

Restructuring charges

   

3,932

               

1,656

           

Other charges (income), net

   

(301)

               

(1)

           

Adjusted operating income 

   

$217,817

 

(c)

 

28.0

       

$200,232

     

28.2

   
                                       

Note:

                                   

(c)

Adjusted operating income increased 9% as compared to the same period in 2016.

   

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)

                                       
     

 

 

Twelve months ended

           

 

 

Twelve months ended

         
     

December 31, 2017

 

% of sales

   

December 31, 2016

 

% of sales

 
                               

Net sales

   

$2,725,053

 

(a)

 

100.0

       

$2,508,257

     

100.0

   

Cost of sales

   

1,151,740

     

42.3

       

1,072,670

     

42.8

   

Gross profit

   

1,573,313

     

57.7

       

1,435,587

     

57.2

   
                                       

Research and development

   

129,265

     

4.7

       

119,968

     

4.8

   

Selling, general and administrative 

   

787,464

     

28.8

       

732,622

     

29.2

   

Amortization

   

42,671

     

1.6

       

36,052

     

1.4

   

Interest expense

   

32,785

     

1.2

       

28,026

     

1.1

   

Restructuring charges

   

12,772

     

0.5

       

6,235

     

0.3

   

Other charges (income), net

   

(5,866)

     

(0.2)

       

8,491

     

0.3

   

Earnings before taxes

   

574,222

     

21.1

       

504,193

     

20.1

   
                                       

Provision for taxes

   

198,250

 

(b)

 

7.3

       

119,823

     

4.8

   

Net earnings

   

$375,972

     

13.8

       

$384,370

     

15.3

   
                                       

Basic earnings per common share:

                                   

Net earnings 

   

$14.62

               

$14.49

           

Weighted average number of common shares

   

25,713,575

               

26,517,768

           
                                       

Diluted earnings per common share:

                                   

Net earnings 

   

$14.24

               

$14.22

           

Weighted average number of common 

   

26,393,783

               

27,023,905

           

  and common equivalent shares

                                   
                                       

Note:

                                   

(a)

Local currency sales increased 8% as compared to the same period in 2016.

   

(b)

Provision for taxes for the twelve months ended December 31, 2017 includes a provisional one-time charge of $72 million for the implementation of the Tax Cuts and Jobs Act. Of this amount, $59 million is expected to paid over a period of up to eight years.  The estimated charge may change with the finalization of implementation.

   
                                       
                                       

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

                                       
     

 

 

Twelve months ended

           

 

 

Twelve months ended

         
     

December 31, 2017

 

% of sales

   

December 31, 2016

 

% of sales

 
                                       

Earnings before taxes

   

$574,222

               

$504,193

           

Amortization

   

42,671

               

36,052

           

Interest expense

   

32,785

               

28,026

           

Restructuring charges

   

12,772

               

6,235

           

Other charges (income), net

   

(5,866)

 

(c)

           

8,491

 

(e)

       

Adjusted operating income 

   

$656,584

 

(d)

 

24.1

       

$582,997

     

23.2

   
                                       

Note:

                                   

(c)

Other charges (income), net includes a one-time gain of $3.4 million relating to the sale of a facility in Switzerland in connection with our initiative to consolidate certain Swiss operations into a new facility and $1.7 million of acquisition costs for the twelve months ended December 31, 2017.

 

(d)

Adjusted operating income increased 13% as compared to the same period in 2016.

   

(e)

Other charges (income), net includes a one-time non-cash pension settlement charge of $8.2 million related to a lump sum settlement to former employees of our U.S. pension plan and acquisition costs of $1.1 million for the twelve months ended December 31, 2016.

   

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)

                   
                   
   

December 31, 2017

   

December 31, 2016

                   

Cash and cash equivalents

   

$148,687

       

$158,674

 

Accounts receivable, net

   

528,615

       

454,988

 

Inventories

   

255,390

       

222,047

 

Other current assets and prepaid expenses

   

74,031

       

61,075

 

Total current assets

   

1,006,723

       

896,784

 
                   

Property, plant and equipment, net

   

668,271

       

563,707

 

Goodwill and other intangibles assets, net

   

766,556

       

643,433

 

Other non-current assets

   

108,255

       

62,853

 

Total assets

   

$2,549,805

       

$2,166,777

 
                   

Short-term borrowings and maturities of long-term debt

   

$19,677

       

$18,974

 

Trade accounts payable

   

167,627

       

146,593

 

Accrued and other current liabilities

   

502,369

       

421,948

 

Total current liabilities

   

689,673

       

587,515

 
                   

Long-term debt

   

960,170

       

875,056

 

Other non-current liabilities

   

352,682

       

269,263

 

Total liabilities

   

2,002,525

       

1,731,834

 
                   

Shareholders' equity

   

547,280

       

434,943

 

Total liabilities and shareholders' equity

   

$2,549,805

       

$2,166,777

 

 

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)

                     
       

Three months ended

 

Twelve months ended

       

December 31,

 

December 31,

       

2017

 

2016

 

2017

 

2016

                     

Cash flows from operating activities:

             

    Net earnings

$76,976

 

$137,776

 

$375,972

 

$384,370

    Adjustments to reconcile net earnings to

             

      net cash provided by operating activities:

             

   Depreciation

9,037

 

8,216

 

33,458

 

32,743

   Amortization

11,661

 

9,886

 

42,671

 

36,052

   Deferred tax provision (benefit)

5,009

 

12,956

 

(2,745)

 

1,878

   Share-based compensation

4,759

 

4,445

 

16,582

 

15,306

   Provisional one-time charge on US tax reform

71,982

 

-

 

71,982

 

-

   Gain on facility sale 

-

 

-

 

(3,394)

 

-

   Non-cash pension settlement charge

-

 

-

 

-

 

8,189

   Other

16

 

175

 

243

 

181

 Decrease in cash resulting from changes in

             

   operating assets and liabilities

(14,350)

 

(20,009)

 

(18,444)

 

(17,961)

                Net cash provided by operating activities

165,090

 

153,445

 

516,325

 

460,758

                     

Cash flows from investing activities:

             

    Proceeds from sale of property, plant and equipment(a)

1,536

 

62

 

11,973

 

423

    Purchase of property, plant and equipment

(41,600)

 

(72,723)

 

(127,426)

 

(123,957)

    Acquisitions

-

 

(1,700)

 

(108,445)

 

(111,381)

    Net hedging settlements on intercompany loans

2,838

 

1,428

 

6,554

 

3,459

                Net cash used in investing activities

(37,226)

 

(72,933)

 

(217,344)

 

(231,456)

                     

Cash flows from financing activities:

             

    Proceeds from borrowings

258,501

 

195,786

 

1,244,195

 

905,774

    Repayments of borrowings

(351,111)

 

(138,265)

 

(1,185,172)

 

(594,178)

    Proceeds from exercise of stock options

5,334

 

5,284

 

28,649

 

25,471

    Repurchases of common stock 

(64,999)

 

(124,998)

 

(399,997)

 

(499,992)

    Acquisition contingent consideration paid

-

 

-

 

-

 

(471)

    Other financing activities

-

 

-

 

(7,205)

 

(209)

                Net cash provided used in financing activities

(152,275)

 

(62,193)

 

(319,530)

 

(163,605)

                     

Effect of exchange rate changes on cash and cash equivalents

4,012

 

(5,778)

 

10,562

 

(5,910)

                     

Net (decrease) increase in cash and cash equivalents

(20,399)

 

12,541

 

(9,987)

 

59,787

                     

Cash and cash equivalents:

             

    Beginning of period

169,086

 

146,133

 

158,674

 

98,887

    End of period

$148,687

 

$158,674

 

$148,687

 

$158,674

                     
                     

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

                     

Net cash provided by operating activities

$165,090

 

$153,445

 

$516,325

 

$460,758

    Payments in respect of restructuring activities

4,962

 

2,072

 

12,663

 

8,376

    Payments for acquisition costs

672

 

-

 

1,436

 

910

    Proceeds from sale of property, plant and equipment(a)

1,536

 

62

 

11,973

 

423

    Purchase of property, plant and equipment

(41,600)

 

(72,723)

 

(127,426)

 

(123,957)

Free cash flow

$130,660

 

$82,856

 

$414,971

 

$346,510

                     

(a)

Proceeds from sale of property, plant and equipment includes $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 twelve months ended December 31, 2017.

 

 

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, 2017

   

9%

 

9%

 

10%

 

10%

   
 

Twelve Months Ended December 31, 2017

   

6%

 

8%

 

11%

 

9%

   
                         

Local Currency Sales Growth

                     
 

Three Months Ended December 31, 2017

   

1%

 

9%

 

7%

 

6%

   
 

Twelve Months Ended December 31, 2017

   

5%

 

8%

 

11%

 

8%

   
                         
                         

RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

 

(unaudited)

 
                         
   

Three months ended

Twelve months ended

   

December 31,

December 31,

   

2017

 

2016

 

% Growth

 

2017

 

2016

 

% Growth

                         

EPS as reported, diluted

$2.93

 

$5.17

 

(43%)

 

$14.24

 

$14.22

 

0%

                         

Restructuring charges, net of tax

0.12

(a)

0.05

(a)

   

0.38

(a)

0.18

(a)

 

Purchased intangible amortization, net of tax

0.09

(b)

0.06

(b)

   

0.27

(b)

0.18

(b)

 

U.S. tax reform

2.74

(c)

-

     

2.73

(c)

-

   

Income tax expense

0.09

(d)

-

     

-

 

-

   

Acquistion costs, net of tax

-

 

-

     

0.05

(e)

0.03

(e)

 

Gain on facility sale

-

 

-

     

(0.10)

(f)

-

   

Non-cash pension settlement charge, net of tax

-

 

-

     

-

 

0.19

(g)

 
                         

Adjusted EPS, diluted

$5.97

 

$5.28

 

13%

 

$17.57

 

$14.80

 

19%

                         

Notes:

                     

(a)

Represents the EPS impact of restructuring charges of $3.9 million ($3.1 million after tax) and $1.7 million ($1.3 million after tax) for the three months ended December 31, 2017 and 2016, and $12.8 million ($10.0 million after tax) and $6.2 million ($4.7 million after tax) for the twelve months ended December 31, 2017 and 2016, respectively, which primarily include employee related costs.

(b)

Represents the EPS impact of purchased intangibles amortization of $3.7 million ($2.3 million after tax) and $2.2 million ($1.5 million after tax) for the three months ended December 31, 2017 and 2016, and $10.9 million ($7.1 million after tax) and $7.4 million ($5.0 million after tax) for the twelve months ended December 31, 2017 and 2016, respectively.

(c)

Represents the EPS impact of a provisional one-time charge of $72.0 million for the three and twelve months ended December 31, 2017 for the implementation of the Tax Cuts and Jobs Act ("Tax Act") which was signed into law in December 2017. The enactment of the Tax Act results in a one-time cash charge for un-repatriated foreign earnings of $59 million which is expected to be paid over a period of up to eight years, and a one-time non-cash charge of $13 million related to certain deferred tax and other non-cash items.  The estimated charge may change with the finalization of implementation.

(d)

Represents the EPS impact of the difference between our reported tax rate of 23% before a one-time charge related to U.S. tax reform during the three months ending December 31, 2017 and our annual income tax rate of 22%, which reflects a 2% annual benefit pertaining to excess tax benefits associated with stock option exercises. 

(e)

Represents the EPS impact of acquisition costs of $1.7 million ($1.3 million after tax) and $1.1 million ($0.8 million after tax) for the twelve months ended December 31, 2017 and 2016, respectively.

(f)

Represents the EPS impact of a one-time gain of $3.4 million ($2.7 million after tax) for the twelve months ended December 31, 2017 relating to the sale of a facility in Switzerland in connection with our initiative to consolidate certain Swiss operations into a new facility.

(g)

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 twelve months ended December 31, 2016.

 

Cision View original content:http://www.prnewswire.com/news-releases/mettler-toledo-international-inc-reports-fourth-quarter-2017-results-300596146.html

SOURCE Mettler-Toledo International Inc.

Mary T. Finnegan, Treasurer, Investor Relations, Mettler-Toledo International Inc., +1-614-438-4748, Fax: +1-614-438-4646