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.

 

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SOURCE Mettler-Toledo International Inc.


Source: Mettler-Toledo International Inc.