EX-99.1 2 tp8k2ex99-1.htm PRESS RELEASE Press Release
Exhibit 99-1

 
 
METTLER-TOLEDO INTERNATIONAL INC. REPORTS
FOURTH QUARTER 2006 RESULTS

- - Excellent Fourth Quarter Operating Performance - -
- - Raised Outlook for 2007 - -

COLUMBUS, Ohio, USA - February 8, 2007 - Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results. The highlights of the quarter were:

·  
Sales growth in local currency was 8%. Reported sales growth was 12%, which included a 4% currency benefit.

·  
Reported net earnings per diluted share (EPS) were $1.31, an increase of 26% over the fourth quarter 2005 amount of $1.04. Excluding share-based compensation, EPS would have increased 30% to $1.35.

·  
Projected 2007 EPS was increased to $4.10 to $4.20.

Fourth Quarter Results

Robert F. Spoerry, Chairman, President and Chief Executive Officer, stated, “We are very pleased with our great finish to 2006 - particularly given the strong results in the fourth quarter of 2005. The sales increase was broad-based, with all key businesses and geographies performing well. Operating profit growth and cash flow generation were strong, and our EPS growth was excellent.”

Reported EPS was $1.31 and included $0.04 per diluted share in share-based compensation. In the fourth quarter of 2005, reported EPS was $1.04. EPS on a reported basis increased 26% versus 2005. Excluding share-based compensation expense, EPS would have increased 30% to $1.35. To facilitate comparisons, a reconciliation of EPS is provided in the attached schedules.

Sales were $462.3 million, compared with $411.2 million in the prior year, an increase of 8% in local currency sales. Reported sales growth was 12%, which included a 4% favorable currency benefit. By region, local currency sales growth was 7% in Europe, 6% in the Americas and 14% in Asia / Rest of World. Adjusted operating income amounted to $79.5 million, a 16% increase over the prior year amount of $68.8 million.

Cash flow from operations was $51.9 million, compared with $59.5 million in 2005. The Company repurchased 1.1 million shares of its stock for $83.4 million during the quarter.

Full Year Results

For 2006, reported EPS was $3.86, which included $0.14 of share-based compensation and a third quarter benefit for discrete tax items of $0.20 per share. EPS in 2005 was $2.52 and included the previously disclosed $0.12 per share tax charge and a $0.30 per share charge for previously-disclosed litigation. On a reported basis, 2006 EPS increased 53% over 2005. Excluding the effects of the one-time items in both periods and share-based compensation, EPS would have increased 29% to $3.80. To facilitate comparisons, a reconciliation of EPS is provided in the attached schedules.

Sales were $1.6 billion, compared with $1.5 billion in 2005. This represents an 8% increase in reported sales, consisting of 7% local currency sales growth and 1% favorable impact due to currency. Adjusted operating income was $234.2 million, a 13% increase over the 2005 amount of $206.7 million.

Cash flow from operations was $191.6 million, compared with $177.1 million in 2005. The Company repurchased 4.1 million shares of its stock for $265.8 million in 2006.
 
2007 Revised Outlook

The Company stated that based on an economic environment and market conditions similar to today’s, it now expects 2007 EPS to be in the range of $4.10 to $4.20, assuming local currency sales growth in the 4% to 6% range. This compares with previous 2007 EPS guidance of $4.00 to $4.10. The Company noted the 2007 estimates include share-based compensation and reflect an effective tax rate of approximately 27%. On a comparable basis -- that is, excluding the one-time tax items in 2006 -- this represents a growth of approximately 12% to 15%.

Conclusion

Spoerry continued, “Disciplined execution of our strategic initiatives drove strong operating performance in 2006. Our sales and marketing programs combined with product innovation will allow us to continue to gain market share. Our product introductions are reinforcing our technology leadership and provide tangible paybacks to customers. We are achieving strong sales momentum in fast-growing emerging markets as we capitalize on our extensive product range and distribution. And finally, a determined focus on costs and efficient use of our invested capital are driving improved returns.”

Spoerry concluded, “The strengths of our franchise are market leadership; global presence; a diversified customer base and product portfolio; technology leadership; and a culture of delivering the highest quality products and services. These elements continue to provide a solid foundation for our future. We remain cautious on the economy but believe, with continued diligent execution of our strategic initiatives, we are well positioned for growth in 2007 and beyond.”

Other Matters

The Company has provided a reconciliation of earnings before taxes, the most comparable U.S. GAAP measure, to adjusted operating income in the attached schedules.

The Company will host a conference call to discuss its fourth quarter 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.

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 manufacturer and marketer 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 on the World Wide Web at “www.mt.com.”

Statements in this discussion which are not historical facts may be considered "forward-looking statements" that involve risks and uncertainties. For a discussion of these risks and uncertainties, which could cause actual events or results to differ from those contained in the forward-looking statements, see “Factors affecting our future operating results” in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the fiscal year December 31, 2005. The Company assumes no obligation to update this press release.
 


 
METTLER-TOLEDO INTERNATIONAL INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(amounts in thousands except share data)
 
(unaudited)
                 
   
Three months ended
     
Three months ended
   
   
December 31, 2006
 
% of sales
 
December 31, 2005
 
% of sales
                 
Net sales
$462,277
(a)
100.0
 
$411,247
 
100.0
Cost of sales
228,677
 
49.5
 
203,154
 
49.4
Gross profit
233,600
 
50.5
 
208,093
 
50.6
                 
Research and development
21,823
 
4.7
 
20,840
 
5.1
Selling, general and administrative
134,240
(b)
29.0
 
118,493
 
28.8
Amortization
3,005
 
0.7
 
2,821
 
0.7
Interest expense
4,657
 
1.0
 
3,594
 
0.9
Other income, net
(1,385)
 
(0.3)
 
(772)
 
(0.2)
Earnings before taxes
71,260
 
15.4
 
63,117
 
15.3
                 
Provision for taxes
19,240
 
4.1
 
18,925
 
4.6
Net earnings
$52,020
 
11.3
 
$44,192
 
10.7
                 
Basic earnings per common share:
             
Net earnings
$1.34
     
$1.06
   
Weighted average number of common shares
38,882,113
     
41,549,018
   
                 
Diluted earnings per common share:
             
Net earnings
$1.31
     
$1.04
   
Weighted average number of common
39,675,263
     
42,419,020
   
and common equivalent shares
             
                 
Notes:
             
(a)
Local currency sales increased 8% as compared to the same period in 2005.
(b)
Includes share-based compensation expense of $2.0 million ($1.4 million after-tax) for the three months ended December 31, 2006.
                 
 
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
                 
   
Three months ended
     
Three months ended
   
   
December 31, 2006
 
% of sales
 
December 31, 2005
 
% of sales
                 
Earnings before taxes
$71,260
     
$63,117
   
Share-based compensation
1,961
     
   
Amortization
3,005
     
2,821
   
Interest expense
4,657
     
3,594
   
Other income, net
(1,385)
     
(772)
   
Adjusted operating income
$79,498
(a)
17.2
 
$68,760
 
16.7
                 
Note:
             
(a)
Adjusted operating income increased 16% as compared to the same period in 2005.





 
METTLER-TOLEDO INTERNATIONAL INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(amounts in thousands except share data)
 
(unaudited)
                 
   
Twelve months ended
     
Twelve months ended
   
   
December 31, 2006
 
% of sales
 
December 31, 2005
 
% of sales
                 
Net sales
$1,594,912
(a)
100.0
 
$1,482,472
 
100.0
Cost of sales
804,480
 
50.4
 
752,153
 
50.7
Gross profit
790,432
 
49.6
 
730,319
 
49.3
                 
Research and development
82,802
 
5.2
 
81,893
 
5.6
Selling, general and administrative
481,709
(b)
30.2
 
441,702
 
29.8
Amortization
11,503
 
0.7
 
11,436
 
0.7
Interest expense
17,492
 
1.1
 
14,880
 
1.0
Other charges (income), net
(7,921)
 
(0.5)
 
20,224
(d)
1.4
Earnings before taxes
204,847
 
12.9
 
160,184
 
10.8
                 
Provision for taxes
47,315
(c)
3.0
 
51,282
(e)
3.5
Net earnings
$157,532
 
9.9
 
$108,902
 
7.3
                 
Basic earnings per common share:
             
Net earnings
$3.93
     
$2.58
   
Weighted average number of common shares
40,065,951
     
42,207,777
   
                 
Diluted earnings per common share:
             
Net earnings
$3.86
     
$2.52
   
Weighted average number of common
40,785,708
     
43,285,121
   
and common equivalent shares
             
                 
Notes:
             
(a)
Local currency sales increased 7% as compared to the same period in 2005.
(b)
Includes share-based compensation expense of $8.2 million ($5.5 million after-tax) for the twelve months ended December 31, 2006.
(c)
Includes tax benefits related to a legal reorganization that resulted in the reduction of the estimated annual effective tax rate from 30% to 27% and discrete tax items of $8.0 million, net. The discrete items comprise a benefit of $2.9 million, net, associated with the legal reorganization and a benefit of $5.1 million resulting from a favorable tax law change.
(d)
Includes a $21.8 million ($13.1 million after-tax) one-time litigation charge related to a $19.9 million ($12 million after-tax) non-cash write-off of an intellectual property license and $1.9 million ($1.1 million after-tax) of related legal costs.
(e)
Includes a net tax charge of $5.4 million related to earnings repatriation associated with the American Jobs Creation Act of $13.1 million offset in part by the favorable resolution of certain tax contingencies of $7.7 million.
                 
 
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
                 
   
Twelve months ended
     
Twelve months ended
   
   
December 31, 2006
 
% of sales
 
December 31, 2005
 
% of sales
                 
Earnings before taxes
$204,847
     
$160,184
   
Share-based compensation
8,239
     
-
   
Amortization
11,503
     
11,436
   
Interest expense
17,492
     
14,880
   
Other charges (income), net
(7,921)
     
20,224
   
Adjusted operating income
$234,160
(a)
14.7
 
$206,724
 
13.9
                 
Note:
             
(a)
Adjusted operating income increased 13% as compared to the same period in 2005.
 






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

       
       
 
December 31, 2006
 
December 31, 2005
       
Cash and cash equivalents
$151,269
 
$324,578
Accounts receivable, net
306,879
 
271,915
Inventory
148,372
 
150,201
Other current assets and prepaid expenses
63,250
 
53,965
Total current assets
669,770
 
800,659
       
Property, plant and equipment, net
229,138
 
218,519
Goodwill and other intangibles
535,621
 
528,209
Other non-current assets
152,556
 
122,386
Total assets
$1,587,085
 
$1,669,773
       
Short-term debt
$9,962
 
$6,345
Accounts payable
95,971
 
88,553
Accrued and other current liabilities
278,446
 
258,558
Total current liabilities
384,379
 
353,456
       
Long-term debt
345,705
 
443,795
Other non-current liabilities
226,139
 
213,520
Total liabilities
956,223
 
1,010,771
       
Shareholders’ equity
630,862
 
659,002
Total liabilities and shareholders’ equity
$1,587,085
 
$1,669,773
 
 






METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
           
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
           
 
Three months ended
 
Twelve months ended
 
December 31,
 
December 31,

 
2006
 
2005
 
2006
 
2005
               
Cash flow from operating activities:
             
Net earnings
$52,020
 
$44,192
 
$157,532
 
$108,902
Adjustments to reconcile net earnings to
             
net cash provided by operating activities:
             
Depreciation
6,752
 
6,519
 
26,069
 
25,977
Amortization
3,005
 
2,821
 
11,503
 
11,436
Deferred taxation
13,959
 
7,244
 
7,365 
 
10,962
Excess tax benefits from share-based payment arrangements
(3,176)
 
 
(11,336)
 
-
Other
2,191
 
(7,175)
 
7,238
 
20,057
Increase (decrease) in cash resulting from changes in
             
operating assets and liabilities
(22,901)
 
5,869
 
(6,805)
 
(275)
Net cash provided by operating activities
51,850
 
59,470
 
191,566
 
177,059
               
Cash flows from investing activities:
             
Proceeds from sale of property, plant and equipment
145
 
549
 
4,181
 
1,423
Purchase of property, plant and equipment
(13,722)
 
(11,452)
 
(34,329)
 
(32,498)
Acquisitions
-
 
(103)
 
(790)
 
(4,087)
Net cash used in investing activities
(13,577)
 
(11,006)
 
(30,938)
 
(35,162)
               
Cash flows from financing activities:
             
Proceeds from borrowings
68,116
 
508,583
 
119,989
 
667,901
Repayments of borrowings
(84,997)
 
(283,873)
 
(234,602)
 
(414,578)
Proceeds from exercise of stock options
7,921
 
15,556
 
30,453
 
27,007
Excess tax benefits from share-based payment arrangements
3,176
 
-
 
11,336
 
-
Repurchases of common stock (a)
(78,024)
 
(53,701)
 
(264,640)
 
(161,832)
Refinancing fees
-
 
(760)
 
-
 
(760)
Net cash provided by (used in) financing activities
(83,808)
 
185,805
 
(337,464)
 
117,738
               
Effect of exchange rate changes on cash and cash equivalents
1,446
 
(4,087)
 
3,527
 
(2,233)
               
Net increase (decrease) in cash and cash equivalents
(44,089)
 
230,182
 
(173,309)
 
257,402
               
Cash and cash equivalents:
             
Beginning of period
195,358
 
94,396
 
324,578
 
67,176
End of period
$151,269
 
$324,578
 
$151,269
 
$324,578
               
 
Note:
         
(a) The twelve months ended December 31, 2006 and 2005 include $4.2 million and $1.4 million, respectively, relating to the settlement of a
liability for shares purchased as of December 31, 2005 and 2004.
           

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

               
Net cash provided by operating activities
$51,850
 
$59,470
 
$191,566
 
$177,059
       Excess tax benefits from share-based payment arrangements
3,176
 
-
 
11,336
 
-
       Payments in respect of restructuring activities
-  
32
 
-
 
1,973
       Proceeds from sale of property, plant and equipment
145
 
549
 
4,181
 
1,423
       Purchase of property, plant and equipment
(13,722)
 
(11,452)
 
(34,329)
 
(32,498)
Free cash flow
$41,449
 
$48,599
 
$172,754
 
$147,957
 
 






METTLER-TOLEDO INTERNATIONAL INC.
OTHER OPERATING STATISTICS
         
         
LOCAL CURRENCY SALES GROWTH BY DESTINATION
         
         
   
 
Europe
Americas
Asia/RoW
Total
         
Three Months Ended December 31, 2006
7%
6%
14%
8%
         
Twelve Months Ended December 31, 2006
7%
5%
10%
7%






RECONCILIATION OF DILUTED EPS AS REPORTED TO DILUTED EPS EXCLUDING
SHARE-BASED COMPENSATION EXPENSE AND ONE-TIME ITEMS
(unaudited)
 
   
Three months ended
December 31,
 
Twelve months ended
December 31,
                         
   
2006
 
2005
 
% Growth
 
2006
 
2005
 
% Growth
                         
EPS as reported, diluted
$1.31
 
$1.04
 
26%
 
$3.86
 
$2.52
 
53%
                         
Discrete tax items (a) (b)
-
 
-
     
(0.20)
 
0.12
   
Share-based compensation (c)
0.04
 
-
     
0.14
 
-
   
Non-cash intangible write-off and litigation (d)
-
 
-
     
-
 
0.30
   
                         
EPS excluding share-based compensation expense
                     
and one-time items, diluted (e)
$1.35
 
$1.04
 
30%
 
$3.80
 
$2.94
 
29%
                         
                         
                         
Notes:
                     
(a)
Discrete tax items in 2006 pertain to the EPS impact of tax benefits related to a legal reorganization of $2.9 million, net, and a benefit related to a favorable tax law change of $5.1 million.
(b)
Discrete tax items in 2005 represent the EPS impact of net tax charges related to earnings repatriation associated with the American Job Creation Act of $13.1 million offset in part by the favorable resolution of certain tax contingencies of $7.7 million.
(c)
EPS impact of $2.0 million ($1.4 million after-tax) for the three months ended December 31, 2006 and $8.2 million ($5.5 million after-tax) for the twelve months ended December 31, 2006 for share-based compensation expense.
(d)
EPS impact of one-time litigation charge related to a $19.9 million ($12 million after-tax) non-cash write-off of an intellectual property license and $1.9 million ($1.1 million after-tax) of related legal costs.
(e)
EPS for the periods ended December 31, 2006 and 2005 reflect an effective tax rate of 27% and 30%, respectively, excluding the tax items described in Notes (a) and (b) above.