Date of Report (Date of earliest event reported): | February 8, 2012 |
Delaware | File No. 001-13595 | 13-3668641 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1900 Polaris Parkway Columbus, OH and Im Langacher, P.O. Box MT-100 CH Greifensee, Switzerland | 43240 and 8606 | |
(Address of principal executive offices) | (Zip Code) |
(Former name or former address, if changed since last report.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
• | It does not include interest expense. Because Mettler-Toledo has borrowed money to finance some of its operations, interest is a necessary and ongoing part of its costs and has assisted Mettler-Toledo in generating revenue. Therefore any measure that excludes interest expense has material limitations. | |
• | It excludes amortization expense. Because this item is recurring, any measure that excludes amortization expense has material limitations. | |
• | It excludes other charges (income), net. Because other charges (income), net is a component of operating income under U.S. GAAP, any measure that excludes other charges (income), net, has material limitations. | |
• | It excludes restructuring charges. Because restructuring charges are a component of operating income under U.S. GAAP, any measure that excludes restructuring charges, has material limitations. |
• | It includes proceeds from the sale of property, plant and equipment and purchases of property, plant and equipment, which are not considered to be components of net cash provided by operating activities under U.S. GAAP. Therefore any measure that includes proceeds from the sale of property, plant and equipment and purchases of property, plant and equipment has material limitations. | |
• | It excludes restructuring payments and excess tax benefits from share-based payment arrangements, which are considered to be components of net cash provided by operating activities under U.S. GAAP. Therefore any measure that excludes these items has material limitations. |
Exhibit No. | Description | |||
99.1 | Press release, dated February 8, 2012, issued by Mettler-Toledo International Inc. |
METTLER-TOLEDO INTERNATIONAL INC. | ||||
Dated: | February 8, 2012 | By: | /s/ William P. Donnelly | |
William P. Donnelly | ||||
Chief Financial Officer |
FOR IMMEDIATE RELEASE | Exhibit 99.1 |
• | Sales in local currency increased by 8% in the quarter compared with the prior year. Reported sales increased 9%, which includes a 1% benefit from currency. |
• | Net earnings per diluted share as reported (EPS) were $2.91, compared with $2.41 in the fourth quarter of 2010. Adjusted EPS was $2.88, a 13% increase over the prior-year amount of $2.56. 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. |
METTLER-TOLEDO INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands except share date) (unaudited) | |||||||||||||
Three months ended | Three months ended | ||||||||||||
December 31, 2011 | % of sales | December 31, 2010 | % of sales | ||||||||||
Net sales | $ | 648,360 | (a) | 100.0 | $ | 592,765 | 100.0 | ||||||
Cost of sales | 302,201 | 46.6 | 276,175 | 46.6 | |||||||||
Gross profit | 346,159 | 53.4 | 316,590 | 53.4 | |||||||||
Research and development | 30,115 | 4.6 | 26,466 | 4.5 | |||||||||
Selling, general and administrative | 184,368 | 28.4 | 164,807 | 27.8 | |||||||||
Amortization | 5,066 | 0.8 | 4,229 | 0.7 | |||||||||
Interest expense | 5,930 | 1.0 | 5,300 | 0.9 | |||||||||
Restructuring charges | 3,081 | 0.5 | 2,390 | 0.4 | |||||||||
Other charges (income), net | 95 | 0.0 | 3,307 | 0.5 | |||||||||
Earnings before taxes | 117,504 | 18.1 | 110,091 | 18.6 | |||||||||
Provision for taxes | 23,222 | 3.6 | 29,239 | 5.0 | |||||||||
Net earnings | $ | 94,282 | 14.5 | $ | 80,852 | 13.6 | |||||||
Basic earnings per common share: | |||||||||||||
Net earnings | $ | 2.99 | $ | 2.48 | |||||||||
Weighted average number of common shares | 31,542,400 | 32,657,555 | |||||||||||
Diluted earnings per common share: | |||||||||||||
Net earnings | $ | 2.91 | $ | 2.41 | |||||||||
Weighted average number of common | |||||||||||||
and common equivalent shares | 32,387,459 | 33,604,641 | |||||||||||
Note: | |||||||||||||
(a) | Local currency sales increased 8% as compared to the same period in 2010. | ||||||||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME | |||||||||||||
Three months ended | Three months ended | ||||||||||||
December 31, 2011 | % of sales | December 31, 2010 | % of sales | ||||||||||
Earnings before taxes | $ | 117,504 | $ | 110,091 | |||||||||
Amortization | 5,066 | 4,229 | |||||||||||
Interest expense | 5,930 | (b) | 5,300 | ||||||||||
Restructuring charges | 3,081 | 2,390 | |||||||||||
Other charges (income), net | 95 | 3,307 | (c) | ||||||||||
Adjusted operating income | $ | 131,676 | (d) | 20.3 | $ | 125,317 | 21.1 | ||||||
Note: | |||||||||||||
(b) | Includes a $0.3 million charge associated with the termination of the Company's $950 million Credit Agreement, which was replaced with the Company's new $870 million Credit Agreement during the three months ended December 31, 2011. | ||||||||||||
(c) | Includes a $4.4 million charge associated with the sale of the Company's retail software business for in-store item and inventory management solutions and a $1.2 million benefit from unrealized contingent consideration from a previous acquisition during the three months ended December 31, 2010. | ||||||||||||
(d) | Adjusted operating income increased 5% as compared to the same period in 2010. |
METTLER-TOLEDO INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands except share data) (unaudited) | |||||||||||||
Twelve months ended | Twelve months ended | ||||||||||||
December 31, 2011 | % of sales | December 31, 2010 | % of sales | ||||||||||
Net sales | $ | 2,309,328 | (a) | 100.0 | $ | 1,968,178 | 100.0 | ||||||
Cost of sales | 1,091,054 | 47.2 | 930,982 | 47.3 | |||||||||
Gross profit | 1,218,274 | 52.8 | 1,037,196 | 52.7 | |||||||||
Research and development | 116,139 | 5.0 | 97,028 | 4.9 | |||||||||
Selling, general and administrative | 703,632 | 30.5 | 588,726 | 29.9 | |||||||||
Amortization | 17,808 | 0.8 | 14,842 | 0.8 | |||||||||
Interest expense | 23,226 | 1.0 | 20,057 | 1.0 | |||||||||
Restructuring charges | 5,912 | 0.3 | 4,866 | 0.3 | |||||||||
Other charges (income), net | 2,380 | 0.1 | 4,164 | 0.2 | |||||||||
Earnings before taxes | 349,177 | 15.1 | 307,513 | 15.6 | |||||||||
Provision for taxes | 79,684 | 3.4 | 75,365 | 3.8 | |||||||||
Net earnings | $ | 269,493 | 11.7 | $ | 232,148 | 11.8 | |||||||
Basic earnings per common share: | |||||||||||||
Net earnings | $ | 8.45 | $ | 6.98 | |||||||||
Weighted average number of common shares | 31,897,779 | 33,280,463 | |||||||||||
Diluted earnings per common share: | |||||||||||||
Net earnings | $ | 8.21 | $ | 6.80 | |||||||||
Weighted average number of common | |||||||||||||
and common equivalent shares | 32,839,365 | 34,140,097 | |||||||||||
Note: | |||||||||||||
(a) | Local currency sales increased 13% as compared to the same period in 2010. | ||||||||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME | |||||||||||||
Three months ended | Three months ended | ||||||||||||
December 31, 2011 | % of sales | December 31, 2010 | % of sales | ||||||||||
Earnings before taxes | $ | 349,177 | $ | 307,513 | |||||||||
Amortization | 17,808 | 14,842 | |||||||||||
Interest expense | 23,226 | (b) | 20,057 | ||||||||||
Restructuring charges | 5,912 | 4,866 | |||||||||||
Other charges (income), net | 2,380 | 4,164 | (c) | ||||||||||
Adjusted operating income | $ | 398,503 | (d) | 17.3 | $ | 351,442 | 17.9 | ||||||
Note: | |||||||||||||
(b) | Includes a $0.3 million charge associated with the termination of the Company's $950 million Credit Agreement, which was replaced with the Company's new $870 million Credit Agreement during the three months ended December 31, 2011. | ||||||||||||
(c) | Includes a $4.4 million charge associated with the sale of the Company's retail software business for in-store item and inventory management solutions and a $1.2 million benefit from unrealized contingent consideration from a previous acquisition during the three months ended December 31, 2010. | ||||||||||||
(d) | Adjusted operating income increased 13% as compared to the same period in 2010. |
METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands) (unaudited) | |||||||
December 31, 2011 | December 31, 2010 | ||||||
Cash and cash equivalents | $ | 235,601 | $ | 447,577 | |||
Accounts receivable, net | 425,147 | 368,936 | |||||
Inventories | 241,421 | 217,104 | |||||
Other current assets and prepaid expenses | 116,694 | 111,278 | |||||
Total current assets | 1,018,863 | 1,144,895 | |||||
Property, plant and equipment, net | 410,007 | 364,472 | |||||
Goodwill and other intangibles assets, net | 569,153 | 539,071 | |||||
Other non-current assets | 205,451 | 234,625 | |||||
Total assets | $ | 2,203,474 | $ | 2,283,063 | |||
Short-term borrowings and maturities of long-term debt | $ | 28,300 | $ | 10,902 | |||
Trade accounts payable | 168,109 | 138,105 | |||||
Accrued and other current liabilities | 413,435 | 393,179 | |||||
Total current liabilities | 609,844 | 542,186 | |||||
Long-term debt | 476,715 | 670,301 | |||||
Other non-current liabilities | 335,778 | 298,992 | |||||
Total liabilities | 1,422,337 | 1,511,479 | |||||
Shareholders’ equity | 781,137 | 771,584 | |||||
Total liabilities and shareholders’ equity | $ | 2,203,474 | $ | 2,283,063 |
METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) (unaudited) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Cash flow from operating activities: | |||||||||||||||
Net earnings | $ | 94,282 | $ | 80,852 | $ | 269,493 | $ | 232,148 | |||||||
Adjustments to reconcile net earnings to | |||||||||||||||
net cash provided by operating activities: | |||||||||||||||
Depreciation | 8,319 | 7,425 | 31,689 | 29,686 | |||||||||||
Amortization | 5,066 | 4,229 | 17,808 | 14,842 | |||||||||||
Deferred tax provision | 14,771 | 11,450 | 5,018 | 4,058 | |||||||||||
Excess tax benefits from share-based payment arrangements | (6,353 | ) | (5,607 | ) | (12,612 | ) | (9,017 | ) | |||||||
Other | 3,485 | 6,687 | 11,746 | 15,884 | |||||||||||
Increase (decrease) in cash resulting from changes in | |||||||||||||||
operating assets and liabilities | (16,354 | ) | (42,027 | ) | (42,262 | ) | (19,322 | ) | |||||||
Net cash provided by operating activities | 103,216 | 63,009 | 280,880 | 268,279 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Proceeds from sale of property, plant and equipment | 83 | 193 | 2,485 | 350 | |||||||||||
Purchase of property, plant and equipment | (33,994 | ) | (35,379 | ) | (98,500 | ) | (73,943 | ) | |||||||
Acquisitions | (711 | ) | (507 | ) | (35,373 | ) | (13,064 | ) | |||||||
Proceeds from divestitures | — | 9,750 | — | 9,750 | |||||||||||
Other investing activities | — | (108 | ) | (903 | ) | (108 | ) | ||||||||
Net cash used in investing activities | (34,622 | ) | (26,051 | ) | (132,291 | ) | (77,015 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from borrowings | 403,606 | 620,878 | 469,599 | 714,575 | |||||||||||
Repayments of borrowings | (476,968 | ) | (277,421 | ) | (647,694 | ) | (329,536 | ) | |||||||
Proceeds from exercise of stock options | 9,581 | 8,211 | 20,770 | 20,455 | |||||||||||
Excess tax benefits from share-based payment arrangements | 6,353 | 5,607 | 12,612 | 9,017 | |||||||||||
Repurchases of common stock | (33,399 | ) | (91,204 | ) | (204,578 | ) | (239,998 | ) | |||||||
Debt issuance costs | (3,144 | ) | — | (3,144 | ) | — | |||||||||
Acquisition contingent consideration paid | — | — | (7,750 | ) | — | ||||||||||
Other financing activities | (173 | ) | 351 | (284 | ) | (6,590 | ) | ||||||||
Net cash used in financing activities | (94,144 | ) | 266,422 | (360,469 | ) | 167,923 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (1,322 | ) | 1,313 | (96 | ) | 3,359 | |||||||||
Net (decrease) increase in cash and cash equivalents | (26,872 | ) | 304,693 | (211,976 | ) | 362,546 | |||||||||
Cash and cash equivalents: | |||||||||||||||
Beginning of period | 262,473 | 142,884 | 447,577 | 85,031 | |||||||||||
End of period | $ | 235,601 | $ | 447,577 | $ | 235,601 | $ | 447,577 | |||||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||||||
Net cash provided by operating activities | $ | 103,216 | $ | 63,009 | $ | 280,880 | $ | 268,279 | |||||||
Excess tax benefits from share-based payment arrangements | 6,353 | 5,607 | 12,612 | 9,017 | |||||||||||
Payments in respect of restructuring activities | 2,194 | 2,184 | 6,297 | 11,067 | |||||||||||
Proceeds from sale of property, plant and equipment | 83 | 193 | 2,485 | 350 | |||||||||||
Purchase of property, plant and equipment | (33,994 | ) | (35,379 | ) | (98,500 | ) | (73,943 | ) | |||||||
Free cash flow | $ | 77,852 | $ | 35,614 | $ | 203,774 | $ | 214,770 |
METTLER-TOLEDO INTERNATIONAL INC. OTHER OPERATING STATISTICS | ||||||||||||||||||||||
SALES GROWTH BY DESTINATION | ||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Europe | Americas | Asia/RoW | Total | |||||||||||||||||||
U.S. Dollar Sales Growth | ||||||||||||||||||||||
Three Months Ended December 31, 2011 | 7 | % | 5 | % | 19 | % | 9 | % | ||||||||||||||
Twelve Months Ended December 31, 2011 | 18 | % | 9 | % | 26 | % | 17 | % | ||||||||||||||
Local Currency Sales Growth | ||||||||||||||||||||||
Three Months Ended December 31, 2011 | 6 | % | 5 | % | 16 | % | 8 | % | ||||||||||||||
Twelve Months Ended December 31, 2011 | 11 | % | 9 | % | 20 | % | 13 | % | ||||||||||||||
RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS | ||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||
2011 | 2010 | % Growth | 2011 | 2010 | % Growth | |||||||||||||||||
EPS as reported, diluted | $ | 2.91 | $ | 2.41 | 21 | % | $ | 8.21 | $ | 6.80 | 21 | % | ||||||||||
Restructuring charges, net of tax | 0.07 | (a) | 0.05 | (a) | 0.13 | (a) | 0.11 | (a) | ||||||||||||||
Purchased intangible amortization, net of tax | 0.03 | (b) | 0.03 | (b) | 0.12 | (b) | 0.11 | (b) | ||||||||||||||
Debt extinguishment and financing costs, net of tax | 0.01 | (c) | — | 0.01 | (c) | — | ||||||||||||||||
Benefit in Q4 of adjusting Q3 YTD tax rate | (0.14 | ) | (d) | — | — | — | ||||||||||||||||
Discrete tax items | — | — | (0.11 | ) | (e) | (0.15 | ) | (e) | ||||||||||||||
Other items, net of tax | — | 0.07 | (f) | — | 0.07 | (f) | ||||||||||||||||
Adjusted EPS, diluted | $ | 2.88 | $ | 2.56 | 13 | % | $ | 8.36 | $ | 6.94 | 20 | % | ||||||||||
Notes: | ||||||||||||||||||||||
(a) | Represents the EPS impact of restructuring charges of $3.1 million ($2.3 million after tax) and $2.4 million ($1.8 million after tax) for the three months ended December 31, 2011 and 2010, respectively and $5.9 million ($4.4 million after tax) and $4.9 million ($3.6 million after tax) for the twelve months ended December 31, 2011 and 2010, respectively. | |||||||||||||||||||||
(b) | Represents the EPS impact of purchased intangibles amortization, net of tax, of $1.1 million and $0.9 million for the three months ended December 31, 2011 and 2010, respectively and $4.1 million and $3.7 million for the twelve months ended December 31, 2011 and 2010, respectively. | |||||||||||||||||||||
(c) | Represents the EPS impact of costs associated with the termination of the Company's $950 million Credit Agreement that was replaced with the Company's new $870 million Credit Agreement totaling $0.3 million ($0.2 million after tax) for the three and twelve months ended December 31, 2011. | |||||||||||||||||||||
(d) | Represents the EPS impact during the three months ended December 31, 2011 of adjusting the estimated annual effective tax rate from 26% to 24%, or $4.8 million related to the nine months ended September 30, 2011. | |||||||||||||||||||||
(e) | Represents the EPS impact of discrete tax items of $3.8 million and $5.2 million for the twelve months ended December 31, 2011 and 2010, respectively, primarily related to the favorable resolution of certain prior year tax matters. | |||||||||||||||||||||
(f) | Represents the EPS impact of a charge of $4.4 million ($3.8 million after tax), associated with the sale of the Company's retail software business for in-store item and inventory management solutions, offset in part by a benefit from unrealized contingent consideration from a previous acquisition of $1.2 million ($1.2 million after tax) for the three and twelve months ended December 31, 2010. |