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Mettler-Toledo International Inc. Reports Third Quarter 2009 Results
Date:10/29/2009

COLUMBUS, Ohio, Oct. 29 /PRNewswire-FirstCall/ --Mettler-Toledo International Inc. (NYSE: MTD) today announced third quarter results for 2009. Provided below are the highlights:

  • Sales in local currency declined by 12% in the quarter. Reported sales decreased 14%, which included a 2% negative currency impact.
  • Net earnings per diluted share as reported (EPS) were $1.21, compared with $1.52 in the third quarter of 2008. Adjusted EPS was $1.36, a 6% decline from the prior-year amount of $1.44. 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.

Third Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "As we continued to face challenging market conditions and comparisons with very favorable results last year, our local currency sales declined as expected. However, gross margin increased strongly due to favorable mix as well as our initiatives in pricing and procurement. I am also very pleased with the benefit we are seeing from our cost reduction program. Finally, we again had excellent cash flow generation in the quarter."

EPS was $1.21, compared with the prior-year amount of $1.52. Adjusted EPS was $1.36, compared with the prior-year amount of $1.44.

Sales were $435.7 million, compared with $509.1 million in the prior year, reflecting a 12% decline in local currency sales. Reported sales declined by 14%, which included a 2% negative currency impact. By region, local currency sales decreased 16% in Europe, 12% in the Americas and 6% in Asia / Rest of World. Adjusted operating income amounted to $73.2 million, a 4% decrease from the prior-year amount of $76.5 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 $79.6 million, compared with $76.6 million in 2008.

Nine-Month Results

EPS was $3.02, compared with the prior-year amount of $3.96. Adjusted EPS was $3.48, compared with the prior-year amount of $3.85.

Sales were $1.217 billion, compared with $1.464 billion in 2008, reflecting a 12% decline in local currency sales. Reported sales declined by 17% due to a negative 5% currency impact. By region, local currency sales decreased 15% in Europe, 13% in the Americas and 4% in Asia / Rest of World. Adjusted operating income amounted to $187.2 million, an 11% decrease from the prior-year amount of $210.0 million.

Cash flow from operations was $188.5 million, compared with $160.6 million in 2008.

Cost Reduction Program

Earlier in the year, the Company announced a Cost Reduction Program aimed at reducing costs by approximately $100 million annually. The Program, which is substantially completed, consisted primarily of work force reductions and other cost efficiency measures. The Company reported that the Program will meet its target. Total restructuring charges associated with the Program are expected to be $40 million, of which $34.8 million has been incurred to date.

Fourth Quarter Outlook

The Company stated that forecasting continues to be difficult given the ongoing uncertainty in the global economy. For the fourth quarter 2009, management expects a local currency sales decline in the range of -6% to -7% and Adjusted EPS in the range of $1.90 to $2.00. For the full-year 2009, this results in a local currency sales decline of approximately -10% and Adjusted EPS in the range of $5.39 to $5.50. This compares with previous full-year Adjusted EPS guidance of $4.92 to $5.42.

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. EPS guidance would require an estimate of non-recurring items for 2009, which are not yet known.

Conclusion

Filliol concluded, "We have executed the necessary cost reduction measures and believe our cost structure is well aligned for the remainder of this year and into 2010. Our new product pipeline remains strong, and our sales and marketing programs are focused on capturing growth. Our strong leadership positions, track record for execution and our ability to continue to invest for growth during this difficult environment strongly position us to capture growth and gain market share. We remain convinced we will emerge from this downturn in a stronger competitive position."

Other Matters

The Company will host a conference call to discuss its third quarter results today (Thursday, October 29) 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    % of    Three months ended   % of
                    September 30, 2009    sales   September 30, 2008   sales

    Net sales                $435,650 (a) 100.0            $509,097    100.0
    Cost of sales             210,457      48.3             260,417     51.2
                              -------      ----             -------     ----
    Gross profit              225,193      51.7             248,680     48.8

    Research and development   22,309       5.1              26,553      5.2
    Selling, general and
     administrative           129,686      29.8             145,612     28.6
    Amortization                3,237       0.7               2,728      0.5
    Interest expense            6,974       1.6               6,846      1.3
    Other charges (income),
     net                        6,077       1.4                 445      0.1
                                -----       ---                 ---      ---
    Earnings before taxes      56,910      13.1              66,496     13.1

    Provision for taxes        15,365       3.6              13,772      2.7
                               ------       ---              ------      ---
    Net earnings              $41,545       9.5             $52,724     10.4
                              =======       ===             =======     ====

    Basic earnings per
     common share:
    Net earnings                $1.23                         $1.56
    Weighted average
     number of common
     shares                33,728,931                    33,856,574

    Diluted earnings per
     common share:
    Net earnings                $1.21                         $1.52
    Weighted average
     number of common and
     common equivalent
     shares                34,413,656                    34,727,806

    Note:
    (a)  Local currency sales decreased 12% as compared to the same period
         in 2008.



                 RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED
                                  OPERATING INCOME


                    Three months ended    % of    Three months ended    % of
                    September 30, 2009    sales   September 30, 2008    sales

    Earnings before
     taxes                    $56,910                       $66,496
      Amortization              3,237                         2,728
      Interest expense          6,974                         6,846
      Other charges
       (income), net            6,077 (b)                       445
                                -----                           ---
    Adjusted operating
     income                   $73,198 (c)  16.8             $76,515     15.0
                              =======                       =======

    Notes:
    (b)  Includes a restructuring charge of $6.1 million which primarily
         represents severance and lease termination costs during the three
         months ended September 30, 2009.
    (c)  Adjusted operating income decreased 4% as compared to the same
         period in 2008.



                           METTLER-TOLEDO INTERNATIONAL INC.
                         CONSOLIDATED STATEMENTS OF OPERATIONS
                        (amounts in thousands except share data)
                                     (unaudited)

                    Nine months ended     % of    Nine months ended    % of
                    September 30, 2009    sales   September 30, 2008   sales

    Net sales              $1,217,171 (a) 100.0          $1,463,657    100.0
    Cost of sales             597,822      49.1             734,814     50.2
                              -------      ----             -------     ----
    Gross profit              619,349      50.9             728,843     49.8

    Research and
     development               65,954       5.4              77,511      5.3
    Selling, general and
     administrative           366,209      30.1             441,311     30.1
    Amortization                8,734       0.7               7,800      0.5
    Interest expense           18,975       1.6              18,723      1.3
    Other charges
     (income), net             29,547       2.4               2,620      0.2
                               ------       ---               -----      ---
    Earnings before taxes     129,930      10.7             180,878     12.4

    Provision for taxes        26,775       2.2              41,024      2.8
                               ------       ---              ------      ---
    Net earnings             $103,155       8.5            $139,854      9.6
                             ========       ===            ========      ===

    Basic earnings per
     common share:
    Net earnings                $3.06                         $4.06
    Weighted average
     number of common
     shares                33,683,443                    34,482,431

    Diluted earnings per
     common share:
    Net earnings                $3.02                         $3.96
    Weighted average
     number of common and
     common equivalent
     shares                34,200,834                    35,347,440

    Note:
    (a)  Local currency sales decreased 12% as compared to the same period
         in 2008.



        RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME

                    Nine months ended     % of    Nine months ended    % of
                    September 30, 2009    sales   September 30, 2008   sales

    Earnings before
     taxes                   $129,930                      $180,878
      Amortization              8,734                         7,800
      Interest expense         18,975 (b)                    18,723
      Other charges
       (income), net           29,547 (c)                     2,620
                               ------                         -----
    Adjusted operating
     income                  $187,186 (d)  15.4            $210,021     14.3
                             ========                      ========

    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 nine months ended September 30, 2009.
    (c)  Includes a restructuring charge of $28.4 million which primarily
         represents severance and lease termination costs during the nine
         months ended September 30, 2009.
    (d)  Adjusted operating income decreased 11% as compared to the same
         period in 2008.



                         METTLER-TOLEDO INTERNATIONAL INC.
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                              (amounts in thousands)
                                    (unaudited)


                                   September 30, 2009     December 31, 2008

    Cash and cash equivalents           $113,948               $78,073
    Accounts receivable, net             284,965               348,614
    Inventory                            164,761               170,613
    Other current assets and prepaid
     expenses                             84,842                73,565
                                          ------                ------
    Total current assets                 648,516               670,865

    Property, plant and equipment, net   303,219               285,008
    Goodwill and other intangibles       526,003               520,721
    Other non-current assets             202,957               187,462
                                         -------               -------
    Total assets                      $1,680,695            $1,664,056
                                      ==========            ==========

    Short-term debt                      $10,652               $12,492
    Accounts payable                      92,010               111,442
    Accrued and other current
     liabilities                         321,760               300,938
                                         -------               -------
    Total current liabilities            424,422               424,872

    Long-term debt                       318,785               441,588
    Other non-current liabilities        286,104               294,349
                                         -------               -------
    Total liabilities                  1,029,311             1,160,809

    Shareholders' equity                 651,384               503,247
                                         -------               -------
    Total liabilities and
     shareholders' equity             $1,680,695            $1,664,056
                                      ==========            ==========



                     METTLER-TOLEDO INTERNATIONAL INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (amounts in thousands)
                                (unaudited)

              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                      Three months ended  Nine months ended
                                         September 30,       September 30,
                                        2009      2008      2009     2008

    Cash flow from operating
     activities:
       Net earnings                   $41,545   $52,724  $103,155  $139,854
       Adjustments to reconcile
        net earnings to net cash
        provided by operating
        activities:
       Depreciation                     7,573     7,200    21,926    22,194
       Amortization                     3,237     2,728     8,734     7,800
       Deferred taxation               (4,976)   (1,702)  (15,773)   (7,957)
       Excess tax benefits
        from share-based
        payment arrangements             (407)     (320)     (609)     (999)
       Other                            2,638     2,114     8,485     4,107
          Increase in cash resulting
           from changes in operating
           assets and liabilities      29,971    13,850    62,557    (4,374)
                                       ------    ------    ------    ------
             Net cash provided by
              operating activities     79,581    76,594   188,475   160,625
                                       ------    ------   -------   -------

    Cash flows from investing
     activities:
       Proceeds from sale of
        property, plant and
        equipment                          62       536     1,979    13,184
       Purchase of property,
        plant and equipment           (12,626)  (17,250)  (36,646)  (37,460)
       Acquisitions                         -      (303)     (170)     (607)
                                          ---      ----      ----      ----
          Net cash used in
           investing activities       (12,564)  (17,017)  (34,837)  (24,883)
                                      -------   -------   -------   -------

    Cash flows from financing
     activities:
       Proceeds from borrowings        30,167    66,575   198,072   235,710
       Repayments of borrowings      (106,615)  (27,151) (323,948) (121,123)
       Debt issuance costs                (18)   (3,085)     (620)   (3,085)
       Debt extinguishment costs          (15)        -    (1,316)        -
       Proceeds from exercise of
        stock options                   1,464       864     6,073     3,319
       Excess tax benefits from
         share-based payment
         arrangements                     407       320       609       999
       Repurchases of common
        stock                               -   (69,071)        -  (225,296)
       Other financing
        activities                         94      (515)     (984)      243
                                          ---      ----      ----       ---
          Net cash used in
           financing activities       (74,516)  (32,063) (122,114) (109,233)
                                      -------   -------  --------  --------

    Effect of exchange rate
     changes on cash and cash
     equivalents                        1,721    (1,999)    4,351     3,308

    Net (decrease) increase in
     cash and cash equivalents         (5,778)   25,515    35,875    29,817

    Cash and cash equivalents:
       Beginning of period            119,726    85,524    78,073    81,222
                                      -------    ------    ------    ------
       End of period                 $113,948  $111,039  $113,948  $111,039
                                     ========  ========  ========  ========



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

    Net cash provided by
     operating activities             $79,581   $76,594  $188,475  $160,625
       Excess tax benefits from
        share-based payment
        arrangements                      407       320       609       999
       Payments in respect of
        restructuring activities        4,226         -    18,538         -
       Proceeds from sale of
        property, plant and equipment      62       536     1,979    13,184
       Purchase of property, plant
        and equipment                 (12,626)  (17,250)  (36,646)  (37,460)
                                      -------   -------   -------   -------
    Free cash flow                    $71,650   $60,200  $172,955  $137,348
                                      =======   =======  ========  ========



                        METTLER-TOLEDO INTERNATIONAL INC.
                           OTHER OPERATING STATISTICS


                   LOCAL CURRENCY SALES GROWTH BY DESTINATION
                                   (unaudited)


                                            Europe  Americas  Asia/RoW  Total
                                            ------  --------  --------  -----

    Three Months Ended September 30, 2009    -16%      -12%       -6%   -12%

    Nine Months Ended September 30, 2009     -15%      -13%       -4%   -12%



          RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS
                                     (unaudited)

                          Three months ended            Nine months ended
                             September 30,                September 30,
                       -------------------------     -----------------------
                      2009      2008   % Growth     2009     2008   % Growth
                      ----      ----   --------     ----     ----   --------

    EPS as reported,
     diluted         $1.21     $1.52       -20%    $3.02      $3.96     -24%

    Restructuring
     charge, net of
     tax              0.13 (a)     -                0.61  (a)     -
                      ----       ---                ----        ---
    Debt
     extinguishment
      and financing
      costs, net of
      tax                -         -                0.04  (b)     -
                       ---       ---                ----        ---
    Purchased
     intangible
     amortization,
     net of tax       0.02 (c)  0.02  (c)           0.06  (c)  0.06  (c)
                      ----      ----                ----      ----
    Discrete tax
     items               -     (0.10) (e)          (0.25) (d) (0.17) (e)
                       ---     -----               -----      -----

    Adjusted EPS,
     diluted         $1.36     $1.44        -6%    $3.48      $3.85     -10%
                     =====     =====               =====      =====



    Notes:
    (a)  Represents the EPS impact of restructuring charges of $6.1 million
         ($4.4 million after tax) for the three months ended September 30,
         2009 and $28.4 million ($20.7 million after tax) for the nine
         months ended September 30, 2009, 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 nine months ended September 30, 2009.
    (c)  Represents the EPS impact of purchased intangibles amortization,
         net of tax, of $0.7 million for both the three months ended
         September 30, 2009 and 2008 and $2.0 million for both the nine
         months ended September 30, 2009 and 2008.
    (d)  Discrete tax items for the nine months ended September 30, 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.
    (e)  Discrete tax items in the three months ended September 30, 2008
         pertain to the EPS impact of a $3.5 million benefit primarily
         related to the closure of certain tax matters. The nine months
         ended September 30, 2008 includes the EPS impact of an additional
         $2.5 million discrete tax item related to favorable withholding tax
         law changes in China.

SOURCE Mettler-Toledo International Inc.


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