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| 8-K - FORM 8-K Q1 2016 PRESS RELEASE - METTLER TOLEDO INTERNATIONAL INC/ | mtd8-kq12016.htm |
FOR IMMEDIATE RELEASE | Exhibit 99.1 | |
METTLER-TOLEDO INTERNATIONAL INC. REPORTS
FIRST QUARTER 2016 RESULTS
- - Continued Solid Earnings Growth - -
COLUMBUS, Ohio, USA - May 5, 2016 - Mettler-Toledo International Inc. (NYSE: MTD) today announced first quarter results for 2016. Provided below are the highlights:
• | Sales in local currency increased 4% in the quarter compared with the prior year. Reported sales increased 1% as currency reduced sales growth by 3% in the quarter. |
• | Net earnings per diluted share as reported (EPS) were $2.40, compared with $2.19 in the prior- year period. Adjusted EPS was $2.46, an increase of 9% over the prior-year amount of $2.25. 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. |
First Quarter Results
Olivier Filliol, President and Chief Executive Officer, stated, “We had a solid start to the year with our first quarter results. Americas had another quarter of good sales growth while Europe came in a little below our expectations. Emerging markets had solid growth including growth in China. With good execution and benefit of productivity initiatives, we achieved solid growth in EPS despite currency headwinds.”
EPS in the quarter was $2.40, compared with the prior-year amount of $2.19. Adjusted EPS was $2.46, an increase of 9% over the prior-year amount of $2.25.
Sales were $539.7 million, a 4% increase in local currency sales, compared with $535.7 million in the prior-year quarter. Reported sales increased 1% as currency reduced sales growth by 3% in the quarter. As compared to the prior year, local currency sales increased 6% in the Americas and 4% in Asia / Rest of World. In Europe, sales in local currency were constant with the prior year. Adjusted operating income amounted to $102.0 million, a 5% increase from the prior-year amount of $97.3 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 $35.7 million, compared with $58.6 million in the prior-year quarter.
Outlook
The Company updated its outlook for 2016 and noted that forecasting remains challenging.
Based on today’s assessment, management anticipates that local currency sales growth in 2016 will be approximately 4% and Adjusted EPS is forecasted to be in the range of $14.25 to $14.35, an increase of 10% to 11%. This compares to previous guidance of local currency sales growth in the range of 3% to 4% and Adjusted EPS in the range of $14.10 to $14.30.
For the second quarter 2016, management anticipates that local currency sales growth will be approximately 4% and Adjusted EPS is forecasted to be in the range of $3.09 to $3.14, an increase of 10% to 12%.
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.
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Conclusion
Filliol concluded, "We are pleased with the start to the year but remain cautious on the global economy as uncertainty remains. Our initiatives remain on track and we expect to continue to benefit from new product introductions, Field Turbo investments, Spinnaker sales and marketing programs and continued productivity measures. We are focused on continued strong execution and believe we can continue to generate above-market growth."
Other Matters
The Company will host a conference call to discuss its quarterly results today (Thursday, May 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.
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METTLER-TOLEDO INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands except share data) (unaudited) | |||||||||||||||
Three months ended | Three months ended | ||||||||||||||
March 31, 2016 | % of sales | March 31, 2015 | % of sales | ||||||||||||
Net sales | $ | 539,674 | (a) | 100.0 | $ | 535,701 | 100.0 | ||||||||
Cost of sales | 239,767 | 44.4 | 236,896 | 44.2 | |||||||||||
Gross profit | 299,907 | 55.6 | 298,805 | 55.8 | |||||||||||
Research and development | 28,973 | 5.4 | 28,461 | 5.3 | |||||||||||
Selling, general and administrative | 168,921 | 31.3 | 173,038 | 32.3 | |||||||||||
Amortization | 8,424 | 1.6 | 7,528 | 1.4 | |||||||||||
Interest expense | 6,580 | 1.2 | 6,725 | 1.3 | |||||||||||
Restructuring charges | 880 | 20.0 | 907 | 0.2 | |||||||||||
Other charges (income), net | (284 | ) | (0.1 | ) | (817 | ) | (0.2 | ) | |||||||
Earnings before taxes | 86,413 | 16.0 | 82,963 | 15.5 | |||||||||||
Provision for taxes | 20,739 | 3.8 | 19,912 | 3.7 | |||||||||||
Net earnings | $ | 65,674 | 12.2 | $ | 63,051 | 11.8 | |||||||||
Basic earnings per common share: | |||||||||||||||
Net earnings | $ | 2.44 | $ | 2.24 | |||||||||||
Weighted average number of common shares | 26,931,293 | 28,115,220 | |||||||||||||
Diluted earnings per common share: | |||||||||||||||
Net earnings | $ | 2.40 | $ | 2.19 | |||||||||||
Weighted average number of common | |||||||||||||||
and common equivalent shares | 27,421,019 | 28,762,935 | |||||||||||||
Note: | |||||||||||||||
(a) Local currency sales increased 4% as compared to the same period in 2015. | |||||||||||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME | |||||||||||||||
Three months ended | Three months ended | ||||||||||||||
March 31, 2016 | % of sales | March 31, 2015 | % of sales | ||||||||||||
Earnings before taxes | $ | 86,413 | $ | 82,963 | |||||||||||
Amortization | 8,424 | 7,528 | |||||||||||||
Interest expense | 6,580 | 6,725 | |||||||||||||
Restructuring charges | 880 | 907 | |||||||||||||
Other charges (income), net | (284 | ) | (817 | ) | |||||||||||
Adjusted operating income | $ | 102,013 | (b) | 18.9 | $ | 97,306 | 18.2 | ||||||||
Note: | |||||||||||||||
(b) Adjusted operating income increased 5% as compared to the same period in 2015. | |||||||||||||||
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METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands) (unaudited) | |||||||
March 31, 2016 | December 31, 2015 | ||||||
Cash and cash equivalents | $ | 110,595 | $ | 98,887 | |||
Accounts receivable, net | 387,296 | 411,420 | |||||
Inventories | 227,323 | 214,383 | |||||
Other current assets and prepaid expenses | 141,485 | 138,125 | |||||
Total current assets | 866,699 | 862,815 | |||||
Property, plant and equipment, net | 521,496 | 517,229 | |||||
Goodwill and other intangible assets, net | 564,173 | 561,536 | |||||
Other non-current assets | 82,905 | 75,059 | |||||
Total assets | $ | 2,035,273 | $ | 2,016,639 | |||
Short-term borrowings and maturities of long-term debt | $ | 17,381 | $ | 14,488 | |||
Trade accounts payable | 120,536 | 142,075 | |||||
Accrued and other current liabilities | 406,875 | 438,564 | |||||
Total current liabilities | 544,792 | 595,127 | |||||
Long-term debt | 681,872 | 575,138 | |||||
Other non-current liabilities | 265,276 | 265,917 | |||||
Total liabilities | 1,491,940 | 1,436,182 | |||||
Shareholders’ equity | 543,333 | 580,457 | |||||
Total liabilities and shareholders’ equity | $ | 2,035,273 | $ | 2,016,639 | |||
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METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) (unaudited) | |||||||
Three months ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Cash flow from operating activities: | |||||||
Net earnings | $ | 65,674 | $ | 63,051 | |||
Adjustments to reconcile net earnings to | |||||||
net cash provided by operating activities: | |||||||
Depreciation | 8,122 | 8,301 | |||||
Amortization | 8,424 | 7,528 | |||||
Deferred tax benefit | (3,304 | ) | (1,670 | ) | |||
Excess tax benefits from share-based payment arrangements | (5,805 | ) | (441 | ) | |||
Other | 3,579 | 3,480 | |||||
Decrease in cash resulting from changes in | |||||||
operating assets and liabilities | (40,990 | ) | (21,653 | ) | |||
Net cash provided by operating activities | 35,700 | 58,596 | |||||
Cash flows from investing activities: | |||||||
Proceeds from sale of property, plant and equipment | 135 | 42 | |||||
Purchase of property, plant and equipment | (14,348 | ) | (18,539 | ) | |||
Acquisition | (4,329 | ) | (200 | ) | |||
Net hedging settlement on intercompany loans | 2,128 | (8,384 | ) | ||||
Net cash used in investing activities | (16,414 | ) | (27,081 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from borrowings | 229,413 | 150,996 | |||||
Repayments of borrowings | (124,467 | ) | (77,486 | ) | |||
Proceeds from exercise of stock options | 5,909 | 9,546 | |||||
Excess tax benefits from share-based payment arrangements | 5,805 | 441 | |||||
Repurchases of common stock | (125,000 | ) | (123,745 | ) | |||
Other financing activities | (125 | ) | — | ||||
Net cash used in financing activities | (8,465 | ) | (40,248 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 887 | (1,171 | ) | ||||
Net decrease in cash and cash equivalents | 11,708 | (9,904 | ) | ||||
Cash and cash equivalents: | |||||||
Beginning of period | 98,887 | 85,263 | |||||
End of period | $ | 110,595 | $ | 75,359 | |||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||
Net cash provided by operating activities | $ | 35,700 | $ | 58,596 | |||
Excess tax benefits from share-based payment arrangements | 5,805 | 441 | |||||
Payments in respect of restructuring activities | 1,841 | 806 | |||||
Proceeds from sale of property, plant and equipment | 135 | 42 | |||||
Purchase of property, plant and equipment | (14,348 | ) | (18,539 | ) | |||
Free cash flow | $ | 29,133 | $ | 41,346 | |||
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METTLER-TOLEDO INTERNATIONAL INC. OTHER OPERATING STATISTICS | |||||||||||||||||
SALES GROWTH BY DESTINATION | |||||||||||||||||
(unaudited) | |||||||||||||||||
Europe | Americas | Asia/RoW | Total | ||||||||||||||
U.S. Dollar Sales Growth (Decrease) | |||||||||||||||||
Three Months Ended March 31, 2016 | (2 | )% | 5 | % | (1 | )% | 1 | % | |||||||||
Local Currency Sales Growth (Decrease) | |||||||||||||||||
Three Months Ended March 31, 2016 | 0 | % | 6 | % | 4 | % | 4 | % | |||||||||
RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS | |||||||||||||||||
(unaudited) | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2016 | 2015 | % Growth | |||||||||||||||
EPS as reported, diluted | $ | 2.40 | $ | 2.19 | 10% | ||||||||||||
Restructuring charges, net of tax | 0.02 | (a) | 0.02 | (a) | |||||||||||||
Purchased intangible amortization, net of tax | 0.04 | (b) | 0.04 | (b) | |||||||||||||
Adjusted EPS, diluted | $ | 2.46 | $ | 2.25 | 9% | ||||||||||||
Notes: | |||||||||||||||||
(a) | Represents the EPS impact of restructuring charges of $0.9 million ($0.7 million after tax) for both the three months ended March 31, 2016 and 2015, respectively, which primarily include employee related costs. | ||||||||||||||||
(b) | Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.1 million and $1.0 million for the three month periods ended March 31, 2016 and 2015. | ||||||||||||||||
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