METTLER TOLEDO INTERNATIONAL INC/ - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q


[X]				QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004


[ ]				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 incorporation or organization)		(I.R.S. Employer Identification No.)

Im Langacher, P.O. Box MT-100
CH 8606 Greifensee, Switzerland

(Address of principal executive offices)
(Zip Code)

+41-1-944-22-11

(Registrant's telephone number, including area code)

not applicable

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

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 X No ____

The Registrant had 43,704,602 shares of Common Stock outstanding at September 30, 2004.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12 b-2 of the Exchange Act). Yes X No ____

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 for the three months ended September 30, 2004 and 2003	3
	Interim Consolidated Statements of Operations for the nine months ended September 30, 2004 and 2003	4
	Interim Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003	5
	Interim Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss) for the nine months ended September 30, 2004 and 2003	6
	Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2004 and 2003	7
	Notes to the Interim Consolidated Financial Statements at September 30, 2004	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

	PART 2. OTHER INFORMATION

Item 1.	Legal Proceedings	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults upon Senior Securities	30
Item 4.	Submission of Matters to a Vote of Security Holders	30
Item 5.	Other Information	30
Item 6.	Exhibits and Reports on Form 8-K	31

SIGNATURE		32

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended September 30, 2004 and 2003
(In thousands, except share data)


		September 30,		September 30,
		2004		2003

		(unaudited)		(unaudited)

Net sales
	Products	$	262,055	$	249,434
	Service		79,993		71,380

Total net sales			342,048		320,814
Cost of sales
	Products		125,125		121,863
	Service		51,168		47,087

Gross profit			165,755		151,864

Research and development			20,190		19,277
Selling, general and administrative			104,683		92,783
Amortization			2,925		2,909
Interest expense			2,909		3,102
Other charges (income), net			(135)		(753)

	Earnings before taxes		35,183		34,546
Provision for taxes			10,555		10,364

	Net earnings	$	24,628	$	24,182


Basic earnings per common share:
	Net earnings		$0.56		$0.54
	Weighted average number of common shares		44,320,477		44,485,712

Diluted earnings per common share:
	Net earnings		$0.54		$0.53
	Weighted average number of common shares		45,520,086		45,568,383

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
Nine months ended September 30, 2004 and 2003
(In thousands, except share data)


		September 30,		September 30,
		2004		2003

		(unaudited)		(unaudited)

Net sales
	Products	$	771,738	$	721,694
	Service		233,511		212,291

Total net sales			1,005,249		933,985
Cost of sales
	Products		370,189		353,149
	Service		151,110		138,903

Gross profit			483,950		441,933

Research and development			61,009		57,085
Selling, general and administrative			302,512		271,596
Amortization			8,629		8,576
Interest expense			9,647		10,678
Other charges (income), net (see Note 7)			(231)		4,146

	Earnings before taxes		102,384		89,852
Provision for taxes			30,716		26,955

	Net earnings	$	71,668	$	62,897


Basic earnings per common share:
	Net earnings		$1.61		$1.42
	Weighted average number of common shares		44,449,189		44,437,879

Diluted earnings per common share:
	Net earnings		$1.57		$1.38
	Weighted average number of common shares		45,702,557		45,441,437

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, 2004 and December 31, 2003
(In thousands, except share data)


					September 30,		December 31,
					2004		2003

					(unaudited)
				ASSETS
Current assets:
	Cash and cash equivalents				$	54,048	$	45,116
	Trade accounts receivable, less allowances of $10,184 at September 30, 2004 and $10,489 at December 31, 2003					239,939		249,353
	Inventories, less allowances of $34,196 at September 30, 2004 and $38,745 at December 31, 2003					156,038		151,764
	Current deferred tax assets, net					27,806		27,644
	Other current assets and prepaid expenses					31,854		31,660

			Total current assets			509,685		505,537
Property, plant and equipment, net						224,247		231,512
Goodwill, net						424,210		421,940
Other intangible assets, net						124,460		126,874
Non-current deferred tax assets, net						40,117		40,683
Other non-current assets						60,494		60,730

			Total assets		$	1,383,213	$	1,387,276

		LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Trade accounts payable				$	60,259	$	68,243
	Accrued and other current liabilities					104,348		97,966
	Accrued compensation and related items					62,182		56,575
	Deferred revenue and customer prepayments					31,317		20,759
	Taxes payable					59,735		51,347
	Current deferred tax liabilities					14,399		14,742
	Short-term borrowings and current maturities of long-term debt					9,512		18,277

			Total current liabilities			341,752		327,909
Long-term debt						185,323		223,239
Non-current deferred taxes						46,020		46,519
Other non-current liabilities						136,316		135,613

			Total liabilities			709,411		733,280

Shareholders' equity:
	Preferred stock, $0.01 par value per share; authorized 10,000,000 shares; issued 0					-		-
	Common stock, $0.01 par value per share; authorized 125,000,000 shares;
			issued 44,771,111 and 44,582,017 shares, outstanding 43,704,602 and 44,582,017 shares at September 30, 2004 and December 31, 2003, respectively			448		446
	Additional paid-in capital					475,610		471,628
	Treasury stock at cost (1,066,509 and 0 shares at September 30, 2004 and December 31, 2003, respectively)					(47,734)		-
	Retained earnings					266,438		200,216
	Accumulated other comprehensive loss					(20,960)		(18,294)

			Total shareholders' equity			673,802		653,996

Commitments and contingencies						-		-

			Total liabilities and shareholders' equity		$	1,383,213	$	1,387,276

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 AND
COMPREHENSIVE INCOME (LOSS)
Nine months ended September 30, 2004 and 2003
(In thousands, except share data)
(unaudited)


												Accumulated
		Common Stock				Additional						Other
						Paid-in		Treasury		Retained		Comprehensive
		Shares		Amount		Capital		Stock		Earnings		Income (Loss)		Total

Balance at December 31, 2003			44,582,017	$	446	$	471,628	$	-	$	200,216	$	(18,294)	$	653,996
Exercise of stock options			471,985		2		3,982		12,361		(5,446)		-		10,899
Repurchases of common stock			(1,349,400)		-		-		(60,095)		-		-		(60,095)
Comprehensive income:
	Net earnings		-		-		-		-		71,668		-		71,668
	Change in currency translation adjustment		-		-		-		-		-		(2,666)		(2,666)

	Comprehensive income														69,002

Balance at September 30, 2004			43,704,602	$	448	$	475,610	$	(47,734)	$	266,438	$	(20,960)	$	673,802


Balance at December 31, 2002			44,384,820	$	444	$	459,213	$	-	$	104,378	$	(61,649)	$	502,386
Exercise of stock options			100,892		1		2,129		-		-		-		2,130
Comprehensive income:
	Net earnings		-		-		-		-		62,897		-		62,897
	Unrealized gain on cash-flow hedging instruments		-		-		-		-		-		(45)		(45)
	Change in currency translation adjustment		-		-		-		-		-		10,423		10,423

	Comprehensive income														73,275

Balance at September 30, 2003			44,485,712	$	445	$	461,342	$	-	$	167,275	$	(51,271)	$	577,791

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, 2004 and 2003
(In thousands)


				September 30,		September 30,
				2004		2003

				(unaudited)		(unaudited)

Cash flows from operating activities:
	Net earnings			$	71,668	$	62,897
	Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation			19,639		18,852
		Amortization			8,629		8,576
		Other			(144)		(2,619)
	Increase (decrease) in cash resulting from changes in:
		Trade accounts receivable, net			5,563		15,101
		Inventories, net			(4,510)		(6,557)
		Other current assets			1,065		(2,605)
		Trade accounts payable			(7,379)		(15,356)
		Taxes payable			4,165		3,580
		Accruals and other liabilities			23,233		(3,415)

			Net cash provided by operating activities		121,929		78,454


Cash flows from investing activities:
	Proceeds from sale of property, plant and equipment				1,715		1,854
	Purchase of property, plant and equipment				(17,517)		(17,642)
	Acquisitions				(2,287)		(3,486)

			Net cash used in investing activities		(18,089)		(19,274)


Cash flows from financing activities:
	Proceeds from borrowings				68,345		51,604
	Repayments of borrowings				(114,683)		(110,622)
	Proceeds from exercise of stock options				10,899		2,130
	Repurchases of common stock				(60,095)		-

			Net cash used in financing activities		(95,534)		(56,888)


Effect of exchange rate changes on cash and cash equivalents					626		1,676

Net increase in cash and cash equivalents					8,932		3,968

Cash and cash equivalents:
	Beginning of period				45,116		31,427

	End of period			$	54,048	$	35,395

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
AT SEPTEMBER 30, 2004 - Unaudited
(In thousands except share data, unless otherwise stated)

1. BASIS OF PRESENTATION

Mettler-Toledo International Inc. ("Mettler-Toledo" or the "Company") is a 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 Switzerland, the United States, Germany, the United Kingdom and China. The Company's principal executive offices are located in 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 majority 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 generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The interim consolidated financial statements as of September 30, 2004 and for the three and nine month periods ended September 30, 2004 and 2003 should be read in conjunction with the December 31, 2003 and 2002 consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2003.

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, 2004 are not necessarily indicative of the results to be expected for the full year ending December 31, 2004.

The preparation of financial statements in conformity with generally accepted accounting principles 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. Actual results may differ from those estimates. A discussion of the Company's critical accounting policies is included in Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Annual Report on Form 10-K for the year ended December 31, 2003.

Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Inventories, net

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 esti