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Mettler-Toledo International Inc. Reports Fourth Quarter 2009 Results
Date:2/4/2010

COLUMBUS, Ohio, Feb. 4 /PRNewswire-FirstCall/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results for 2009.  Provided below are the highlights:

  • Sales in local currency declined by 5% in the quarter compared with the prior year.  Reported sales growth was 0% due to a 5% benefit from currency.

  • Net earnings per diluted share as reported (EPS) were $2.01, compared with $1.84 in the fourth quarter of 2008.  Adjusted EPS was $2.09, a 5% increase over the prior-year amount of $2.00.  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, “We saw improved business conditions in some segments during the quarter, particularly in China.  With our solid market positions, comprehensive product portfolio and extensive marketing programs, we are benefiting as our markets gradually recover from the economic downturn.  Markets remain challenging in the Americas and Europe in our core industrial and food retailing businesses.  Improved market conditions and the benefits of our cost reduction programs helped us to generate record operating margins in the quarter.  We are pleased that we generated operating profit and EPS growth in the quarter despite the decline in sales.”

EPS was $2.01, compared with the prior-year amount of $1.84.  Adjusted EPS was $2.09, compared with the prior-year amount of $2.00.  

Sales were $511.7 million, a 5% decline in local currency sales, as compared with $509.7 million in the prior year.  Reported sales growth was 0% due to a 5% currency benefit.  By region, local currency sales decreased 10% in Europe and 5% in the Americas.  In Asia / Rest of World, local currency sales increased 3%.  Adjusted operating income amounted to $107.3 million, a 6% increase from the prior-year amount of $101.0 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 $44.1 million, compared with $62.5 million in 2008.

Full Year 2009 Results

EPS was $5.03, compared with the prior-year amount of $5.79.  Adjusted EPS was $5.58, compared with the prior-year amount of $5.84.  

Sales were $1.73 billion, a 10% decline in local currency sales, as compared with $1.97 billion in 2008.  Reported sales declined by 12%, which includes a negative 2% currency impact.  By region, local currency sales decreased 14% in Europe, 11% in the Americas and 2% in Asia / Rest of World.  Adjusted operating income amounted to $294.5 million, a 5% decrease from the prior-year amount of $311.0 million.  

Cash flow from operations was $232.6 million, compared with $223.1 million in 2008.

In the fourth quarter of 2008, the Company announced a Cost Reduction Program aimed at reducing costs by approximately $100 million annually.  The Program, which consisted primarily of work force reductions and other cost efficiency measures, is substantially completed and will meet its target.  Total restructuring charges associated with the Program are expected to be $40 million, of which $37.8 million has been incurred to date.

Bolt-On Acquisitions

Recently, the Company paid approximately $27 million for two small bolt-on acquisitions.  One acquisition, completed at the end of 2009, extends the Company’s offering in the Product Inspection business with vision inspection technology.  The other acquisition, which occurred in early 2010, expands the Company’s market penetration for Liquid Handling products in Europe.  The Company expects these acquisitions will add modestly to sales growth in 2010 and will be neutral to earnings.

Share Repurchase Program

The Company announced that late in the fourth quarter 2009 it re-started its share repurchase program which was suspended in the fourth quarter 2008 due to uncertainty in the global economy and instability in the financial markets.  

2010 Outlook  

The Company stated that forecasting continues to be challenging given the ongoing uncertainty in the global economy.  Based on today’s assessment, management anticipates that local currency sales growth in 2010 will be in the range of 3% to 5% and Adjusted EPS will be in the range of $5.90 to $6.15, an increase of 6% to 10%.  Adjusted EPS excludes purchased intangible amortization, discrete tax items, restructuring charges and other one-time items.      

For the first quarter 2010, the Company anticipates local currency sales to be in the range of 1% to 3% and Adjusted EPS in the range of $0.98 to $1.04, an increase of 3% to 9%.

While the Company has provided an outlook for Adjusted EPS, it has not provided an outlook for EPS.  EPS guidance would require an estimate of non-recurring items, which are not yet known.

Conclusion

Filliol concluded, “Although the business environment remains challenging, we enter 2010 well positioned to capitalize on improving market conditions.  Our product pipeline is very strong, including numerous launches in the coming months for our laboratory business as well as products developed specifically for emerging markets.  We have continued to invest in sales and marketing programs throughout the downturn, which we believe further strengthens our competitive position.  We expect to see growth in emerging markets; however conditions in Europe and the Americas are likely to remain challenging.  We will continue to be diligent in our cost management and will benefit from the cost reduction actions taken in 2009.  Our capital structure and cash flow generation are very strong, and we have re-started the share repurchase program.”  

Other Matters

The Company will host a conference call to discuss its fourth quarter results today (Thursday, February 4) 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 is the world’s largest manufacturer and marketer of weighing instruments for use in laboratory, industrial and food retailing applications.  The Company also holds top-three market positions in several related analytical instruments and is a leading provider of automated chemistry systems used in drug and chemical compound discovery and development.  In addition, the Company is the world’s largest supplier of metal detection and other end-of-line inspection systems used in production and packaging and holds a leading position in certain process analytics applications.  Additional information about METTLER TOLEDO can be found at “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, 2009    of sales  December 31, 2008   of sales
    
    Net sales           $511,682 (a)     100.0        $509,687         100.0
    Cost of sales        241,694          47.2         245,449          48.2
                         -------          ----         -------          ----
    Gross profit         269,988          52.8         264,238          51.8
    
    Research and
     development          23,731           4.6          24,771           4.9
    Selling, general
     and administrative  138,968          27.2         138,495          27.2
    Amortization           3,110           0.6           2,753           0.5
    Interest expense       6,142           1.2           6,667           1.3
    Other charges
     (income), net         3,205           0.7           6,361           1.2
                           -----           ---           -----           ---
    Earnings before
     taxes                94,832          18.5          85,191          16.7
    
    Provision for taxes   25,394           4.9          22,267           4.4
                          ------           ---          ------           ---
    Net earnings         $69,438          13.6         $62,924          12.3
                         =======          ====         =======          ====
    
    Basic earnings per
     common share:
    Net earnings           $2.05                         $1.88
    Weighted average
     number of
     common shares    33,815,082                    33,553,946
    
    Diluted earnings
     per common share:
    Net earnings           $2.01                         $1.84
    Weighted average
     number of common
     and common
     equivalent
     shares           34,560,581                    34,153,116
    
    Note:
    (a) Local currency sales decreased 5% as compared to the same period in
        2008.
    
    
       RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
    
                   Three months ended      %     Three months ended     %  
                   December 31, 2009    of sales  December 31, 2008  of sales
    
    Earnings
     before taxes        $94,832                       $85,191
      Amortization         3,110                         2,753
      Interest
       expense             6,142                         6,667
      Other charges
      (income), net        3,205 (b)                     6,361 (b)
                           -----                         -----
    Adjusted
     operating
     income             $107,289 (c)      21.0        $100,972          19.8
                        ========                      ========
    
    Notes:
    (b) Includes restructuring charges of $3.0 million and $6.4 million which
        primarily represent severance and lease termination costs during the
        three months ended December 31, 2009 and December 31, 2008,
        respectively.
    (c) Adjusted operating income increased 6% as compared to the same period
        in 2008.
    
    
                               METTLER-TOLEDO INTERNATIONAL INC.
                            CONSOLIDATED STATEMENTS OF OPERATIONS
                          (amounts in thousands except share data)
                                       (unaudited)
    
                   Twelve months ended      %     Twelve months ended     %
                   December 31, 2009    of sales  December 31, 2008   of sales
    
    Net sales         $1,728,853 (a)     100.0      $1,973,344         100.0
    Cost of sales        839,516          48.6         980,263          49.7
                         -------          ----         -------          ----
    Gross profit         889,337          51.4         993,081          50.3
    
    Research and
     development          89,685           5.2         102,282           5.2
    Selling, general
     and administrative  505,177          29.2         579,806          29.4
    Amortization          11,844           0.7          10,553           0.5
    Interest expense      25,117           1.4          25,390           1.3
    Other charges
     (income), net        32,752           1.9           8,981           0.4
                          ------           ---           -----           ---
    Earnings before
     taxes               224,762          13.0         266,069          13.5
    
    Provision for
     taxes                52,169           3.0          63,291           3.2
                          ------           ---          ------           ---
    Net earnings        $172,593          10.0        $202,778          10.3
                        ========          ====        ========          ====
    
    Basic earnings
     per common share:
    Net earnings           $5.12                         $5.92
    Weighted average
     number of
     common shares    33,716,353                    34,250,310
    
    Diluted earnings
     per common
     share:
    Net earnings           $5.03                         $5.79
    Weighted average
     number of common
     and common
     equivalent
     shares           34,290,771                    35,048,859
    
    Note:
    (a) Local currency sales decreased 10% as compared to the same period in
        2008.
    
       RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
    
                   Twelve months ended     %     Twelve months ended    %
                   December 31, 2009   of sales   December 31, 2008  of sales
    
    Earnings before
     taxes              $224,762                      $266,069
      Amortization        11,844                        10,553
      Interest expense    25,117 (b)                    25,390
      Other charges
     (income), net        32,752 (c)                    8,981 (c)
                          ------                        -----
    Adjusted 
     operating income   $294,475 (d)      17.0       $310,993           15.8
                        ========                     ========
    
    Notes:
    (b) Includes costs to tender $75 million of the Company's 4.85% 
        $150 million Senior Notes and other financing-related costs totaling 
        $1.8 million during the twelve months ended December 31, 2009.
    (c) Includes restructuring charges of $31.4 million and $6.4 million which
        primarily represent severance and lease termination costs during the
        twelve months ended December 31, 2009 and December 31, 2008,   
        respectively.
    (d) Adjusted operating income decreased 5% as compared to the same period
        in 2008.
    
    
    
                               METTLER-TOLEDO INTERNATIONAL INC.
                            CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (amounts in thousands)
                                      (unaudited)
    
                                    December 31, 2009     December 31, 2008
    
    Cash and cash equivalents            $85,031               $78,073
    Trade accounts receivable, net       312,998               348,614
    Inventories                          168,042               170,613
    Other current assets and
     prepaid expenses                     80,036                73,565
                                          ------                ------
    Total current assets                 646,107               670,865
    
    Property, plant and equipment, net   316,334               285,008
    Goodwill and other intangible
     assets, net                         546,234               520,721
    Other non-current assets             210,112               187,462
                                         -------               -------
    Total assets                      $1,718,787            $1,664,056
                                      ==========            ==========
    
    Short-term borrowings                $89,968               $12,492
    Trade accounts payable               103,160               111,442
    Accrued and other liabilities        301,547               300,938
                                         -------               -------
    Total current liabilities            494,675               424,872
    
    Long-term debt                       203,590               441,588
    Other non-current liabilities        309,384               294,349
                                         -------               -------
    Total liabilities                  1,007,649             1,160,809
    
    Shareholders’ equity                 711,138               503,247
                                         -------               -------
    Total liabilities and
     shareholders’ equity             $1,718,787            $1,664,056
                                      ==========            ==========
    
    
    
    
                            METTLER-TOLEDO INTERNATIONAL INC.
                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (amounts in thousands)
                                      (unaudited)
    
                                  Three months ended      Twelve months ended
                                     December 31,            December 31,
                                  2009          2008      2009          2008
    
    Cash flows from operating
     activities:
      Net earnings             $69,438     $62,924       $172,593    $202,778
      Adjustments to reconcile
       net earnings to net
       cash provided by
       operating activities:
        Depreciation             7,708       6,793         29,634      28,987
        Amortization             3,110       2,753         11,844      10,553
        Deferred tax
         provision              19,539      12,094          3,766       4,137
        Excess tax benefits
         from share-based
         payment arrangements   (1,528)       (610)        (2,137)     (1,609)
        Other                    3,048       1,232         11,533       5,339
         Increase (decrease) 
         in cash resulting 
         from changes in
         operating assets
         and liabilities       (57,185)    (22,662)         5,372     (27,036)
                               -------     -------          -----     -------
            Net cash provided
             by operating
             activities         44,130      62,524        232,605     223,149
                                ------      ------        -------     -------
    
    Cash flows from investing
     activities:
      Proceeds from sale of
       property, plant and
       equipment                   102          123          2,081     13,307
      Purchase of property,
       plant and equipment     (23,395)     (23,548)       (60,041)   (61,008)
      Acquisitions             (14,450)        (392)       (14,620)      (999)
            Net cash used in
             investing
             activities        (37,743)     (23,817)       (72,580)   (48,700)
                               -------      -------        -------    -------
    
    Cash flows from financing
     activities:
      Proceeds from
       borrowings               63,364        70,892        261,436   306,602
      Repayments of
       borrowings              (98,864)     (138,443)      (422,812) (259,566)
      Debt issuance costs          (50)         (264)          (670)   (3,349)
      Debt extinguishment
       costs                         -             -         (1,316)        -
      Proceeds from exercise
       of stock options          4,995         1,909         11,068     5,228
      Repurchases of common
       stock                    (5,988)       (4,375)        (5,988) (229,671)
      Excess tax benefits
       from share-
       based payment
       arrangements              1,528           610          2,137     1,609
      Other financing
       activities                 (314)          372         (1,298)      615
                                  ----           ---         ------       ---
           Net cash used in
            financing
            activities         (35,329)      (69,299)      (157,443) (178,532)
                               -------       -------       --------  --------
    
    Effect of exchange rate
     changes on cash and cash
     equivalents                    25        (2,374)         4,376       934
    
    Net (decrease) increase
     in cash and cash
     equivalents               (28,917)      (32,966)         6,958    (3,149)
    
    Cash and cash equivalents:
      Beginning of period      113,948       111,039         78,073    81,222
      End of period            $85,031       $78,073        $85,031   $78,073
                               =======       =======        =======   =======
    
    
                          RECONCILIATION OF NET CASH PROVIDED BY 
                          OPERATING ACTIVITIES TO FREE CASH FLOW
    
    Net cash provided by
     operating activities     $44,130        $62,524       $232,605  $223,149
      Excess tax benefits
       from share-based
       payment arrangements     1,528            610          2,137     1,609
      Payments in respect of
       restructuring
       activities               3,649            667         22,187       667
      Proceeds from sale
       of property, plant 
       and equipment              102            123          2,081    13,307
      Purchase of property,
       plant and equipment    (23,395)       (23,548)       (60,041)  (61,008)
                              -------        -------        -------   -------
    Free cash flow            $26,014        $40,376       $198,969  $177,724
                              =======        =======       ========  ========
    
    
    
                               METTLER-TOLEDO INTERNATIONAL INC.
                                  OTHER OPERATING STATISTICS
    
                          LOCAL CURRENCY SALES GROWTH BY DESTINATION
                                          (unaudited)
    
                                            Europe   Americas  Asia/RoW  Total
                                            ------   --------  --------  -----
    
    Three Months Ended December 31, 2009      -10%       -5%        3%     -5%
    Twelve Months Ended December 31, 2009     -14%      -11%       -2%    -10%
    
    
    
    
    
       RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS
                                (unaudited)
    
                              Three months ended         Twelve months ended
                                 December 31,                December 31,
                                 ------------                ------------
                                               %                          % 
                             2009     2008   Growth    2009     2008    Growth
                             ----     ----   ------    ----     ----    ------
    
    EPS as reported,
     diluted                $2.01    $1.84      9%    $5.03      $5.79    -13%
    
    Restructuring charges,
     net of tax              0.06 (a) 0.14 (a)         0.67 (a)   0.14 (a)
    Debt extinguishment
     and financing
     costs, net of tax          -        -             0.04 (b)     -
    Purchased intangible
     amortization,
     net of tax              0.02 (c) 0.02 (c)         0.08 (c)   0.08 (c)
    Discrete tax items          -        -            (0.24)(d)  (0.17)(e)
                              ---      ---            -----      -----
    
    Adjusted EPS, diluted   $2.09    $2.00      5%    $5.58      $5.84     -4%
                            =====    =====            =====      =====
    
    
    
    Notes:
    (a) Represents the EPS impact of restructuring charges of $3.0 million
        ($2.2 million after tax) and 31.4 million ($23.0 million after tax)
        for the three months and twelve months ended December 31, 2009,
        respectively and $6.4 million ($4.7 million after tax) for the three
        and twelve months ended December 31, 2008, which primarily include
        severance and lease termination costs.
    (b) Represents the EPS impact of costs to tender $75 million of the
        Company's 4.85% $150 million Senior Notes and other financing-related
        costs totaling $1.8 million ($1.3 million after tax) for the twelve 
        months ended December 31, 2009.
    (c) Represents the EPS impact of purchased intangibles amortization, net
        of tax, of $0.7 million for both the three months ended December 31,
        2009 and 2008 and $2.7 million for both the twelve months ended
        December 31, 2009 and 2008.
    (d) Discrete tax items in 2009 pertain to the EPS impact of a net tax 
        benefit of $8.3 million primarily related to the favorable resolution
        of certain prior year tax matters recorded during the first quarter.
    (e) Discrete tax items in 2008 pertain to the EPS impact of a discrete tax
        benefit of $2.5 million related to favorable withholding tax law
        changes in China recorded during the first quarter and a discrete net
        tax benefit of $3.5 million related to the closure of certain tax
        matters recorded during the third quarter.
    

SOURCE Mettler-Toledo International Inc.

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