UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007,

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                      TO                     

Commission File Number 1-13595

Mettler-Toledo International Inc.

(Exact name of registrant as specified in its charter)

Delaware		13-3668641
(State or other jurisdiction of		(I.R.S Employer Identification No.)
incorporation or organization)

1900 Polaris Parkway
Columbus, Ohio 43240
(Zip Code)

1-614-438-4511

not applicable

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exhange Act. (Check one):

Large accelerated filer. þ     Accelerated filer o     Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The Registrant had 37,772,875 shares of Common Stock outstanding at March 31, 2007.

 

 

METTLER-TOLEDO INTERNATIONAL INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q

		PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Interim Consolidated Financial Statements:
Interim Consolidated Statements of Operations for the three months ended March 31, 2007 and 2006			3
Interim Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006			4
Interim Consolidated Statements of Shareholders’ Equity and Comprehensive Income (Loss) for the three months ended March 31, 2007 and twelve months ended December 31, 2006			5
Interim Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2006			6
Notes to the Interim Consolidated Financial Statements at March 31, 2007			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			15
Item 3. Quantitative and Qualitative Disclosures About Market Risk			23
Item 4. Controls and Procedures			23
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			24
Item 1A. Risk Factors			24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			24
Item 3. Defaults upon Senior Securities			24
Item 4. Submission of Matters to a Vote of Security Holders			25
Item 5. Other Information			25
Item 6. Exhibits			25
SIGNATURE			26
EX-31.1
EX-31.2
EX-32

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

METTLER-TOLEDO INTERNATIONAL INC.

		March 31,				March 31,
		2007				2006
Net sales
Products		$	294,393			$	261,713
Service			93,371				84,447
Total net sales			387,764				346,160
Cost of sales
Products			134,806				121,411
Service			61,479				54,409
Gross profit			191,479				170,340
Research and development			21,336				19,939
Selling, general and administrative			121,436				112,131
Amortization			2,925				2,855
Interest expense			4,460				4,076
Other income, net			(362	)			(2,538	)
Earnings before taxes			41,684				33,877
Provision for taxes			11,254				10,162
Net earnings		$	30,430			$	23,715
Basic earnings per common share:
Net earnings		$	0.80			$	0.58
Weighted average number of common shares			38,065,483				41,050,849
Diluted earnings per common share:
Net earnings		$	0.78			$	0.57
Weighted average number of common and common equivalent shares			38,931,681				41,774,068

The accompanying notes are an integral part of these interim consolidated financial statements.

METTLER-TOLEDO INTERNATIONAL INC.

		March 31,				December 31,
		2007				2006
ASSETS
Current assets:
Cash and cash equivalents		$	95,530			$	151,269
Trade accounts receivable, less allowances of $7,253 at March 31, 2007 and $7,073 at December 31, 2006			290,671				306,879
Inventory			160,590				148,372
Current deferred tax assets, net			34,461				33,054
Other current assets and prepaid expenses			31,693				30,196
Total current assets			612,945				669,770
Property, plant and equipment, net			230,723				229,138
Goodwill			434,457				432,871
Other intangible assets, net			102,296				102,750
Non-current deferred tax assets, net			69,573				69,083
Other non-current assets			84,078				83,473
Total assets		$	1,534,072			$	1,587,085
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable		$	90,315			$	95,971
Accrued and other liabilities			65,492				71,209
Accrued compensation and related items			80,006				110,644
Deferred revenue and customer prepayments			61,823				41,553
Taxes payable			37,467				49,607
Current deferred tax liabilities			5,421				5,433
Short-term borrowings			12,346				9,962
Total current liabilities			352,870				384,379
Long-term debt			330,916				345,705
Non-current deferred tax liabilities			82,683				82,613
Other non-current liabilities			167,317				143,526
Total liabilities			933,786				956,223
Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred stock, $0.01 par value per share; authorized 10,000,000 shares; issued 0			—				—
Common stock, $0.01 par value per share; authorized 125,000,000 shares; issued 44,786,011 and 44,786,011 shares; outstanding 37,772,875 and 38,430,124 shares at March 31, 2007 and December 31, 2006, respectively			448				448
Additional paid-in capital			533,878				528,863
Treasury stock at cost (7,013,136 shares at March 31, 2007 and 6,355,887 shares at December 31, 2006)			(435,805	)			(374,819	)
Retained earnings			515,643				493,691
Accumulated other comprehensive income (loss)			(13,878	)			(17,321	)
Total shareholders’ equity			600,286				630,862
Total liabilities and shareholders’ equity		$	1,534,072			$	1,587,085

The accompanying notes are an integral part of these interim consolidated financial statements.

METTLER-TOLEDO INTERNATIONAL INC.

																						Accumulated
										Additional												Other
		Common Stock								Paid-in				Treasury				Retained				Comprehensive
		Shares				Amount				Capital				Stock				Earnings				Income (Loss)				Total
Balance at December 31, 2006			38,430,124			$	448			$	528,863			$	(374,819	)		$	493,691			$	(17,321	)		$	630,862
Exercise of stock options			180,751				—				—				10,506				(4,367	)			—				6,139
Repurchases of common stock			(838,000	)			—				—				(71,492	)			—				—				(71,492	)
Tax benefit resulting from exercise of certain employee stock options			—				—				2,934				—				—				—				2,934
Share-based compensation			—				—				2,081				—				—				—				2,081
Adoption of FIN 48			—				—				—				—				(4,111	)			—				(4,111	)
Comprehensive income:
Net earnings			—				—				—				—				30,430				—				30,430
Change in currency translation adjustment			—				—				—				—				—				2,726				2,726
Change in pension items			—				—				—				—				—				717				717
Comprehensive income			—				—				—				—				—				—				33,873
Balance at March 31, 2007			37,772,875			$	448			$	533,878			$	(435,805	)		$	515,643			$	(13,878	)		$	600,286
Balance at December 31, 2005			41,404,071			$	448			$	457,129			$	(170,325	)		$	417,075			$	(45,325	)		$	659,002
Exercise of stock options and restricted stock units			1,166,612				—				—				61,388				(30,956	)			—				30,432
Common stock issued as equity compensation			1,000				—				8				53				—				—				61
Repurchases of common stock			(4,141,559	)			—				—				(265,935	)			—				—				(265,935	)
Reclassification related to treasury stock reissuances			—				—				49,960				—				(49,960	)			—				—
Tax benefit resulting from exercise of certain employee stock options			—				—				13,527				—				—				—				13,527
Share-based compensation			—				—				8,239				—				—				—				8,239
Adoption of SFAS 158, net of tax			—				—				—				—				—				19,638				19,638
Comprehensive income:
Net earnings			—				—				—				—				157,532				—				157,532
Change in currency translation adjustment			—				—				—				—				—				10,570				10,570
Minimum pension liability adjustment, net of tax			—				—				—				—				—				(2,204	)			(2,204	)
Comprehensive income			—				—				—				—				—				—				165,898
Balance at December 31, 2006			38,430,124			$	448			$	528,863			$	(374,819	)		$	493,691			$	(17,321	)		$	630,862

The accompanying notes are an integral part of these interim consolidated financial statements.

METTLER-TOLEDO INTERNATIONAL INC.

		March 31,				March 31,
		2007				2006
Cash flows from operating activities:
Net earnings		$	30,430			$	23,715
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation			6,454				6,354
Amortization			2,925				2,855
Deferred taxes			(2,375	)			(1,680	)
Excess tax benefits from share-based payment arrangements			(2,455	)			(5,571	)
Share-based compensation			2,081				2,159
Other			5				(1,161	)
Increase (decrease) in cash resulting from changes in:
Trade accounts receivable, net			18,199				24,680
Inventory			(10,857	)			(5,025	)
Other current assets			(7,464	)			(4,931	)
Trade accounts payable			(562	)			(11,225	)
Taxes payable			14,249				508
Accruals and other			(18,327	)			(11,545	)
Net cash provided by operating activities			32,303				19,133
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment			206				1,638
Purchase of property, plant and equipment			(7,857	)			(6,004	)
Acquisitions			—				(572	)
Net cash used in investing activities			(7,651	)			(4,938	)
Cash flows from financing activities:
Proceeds from borrowings			3,792				7,696
Repayments of borrowings			(17,306	)			(26,784	)
Proceeds from exercise of stock options			6,023				9,741
Repurchases of common stock			(76,939	)			(72,103	)
Excess tax benefits from share-based payment arrangements			2,455				5,571
Net cash used in financing activities			(81,975	)			(75,879	)
Effect of exchange rate changes on cash and cash equivalents			1,584				503
Net decrease in cash and cash equivalents			(55,739	)			(61,181	)
Cash and cash equivalents:
Beginning of period			151,269				324,578
End of period		$	95,530			$	263,397

The accompanying notes are an integral part of these interim consolidated financial statements.

METTLER-TOLEDO INTERNATIONAL INC.

(In thousands, except share data, unless otherwise stated)

1. BASIS OF PRESENTATION

     Mettler-Toledo International Inc. (“Mettler-Toledo” or the “Company”) is a leading global supplier of precision instruments and services. The Company manufactures weighing instruments for use in laboratory, industrial, packaging, logistics and food retailing applications. The Company also manufactures several related analytical instruments and provides automated chemistry solutions used in drug and chemical compound discovery and development. In addition, the Company manufactures metal detection and other end-of-line inspection systems used in production and packaging and provides solutions for use in certain process analytics applications. The Company’s primary manufacturing facilities are located in China, Germany, Switzerland, the United Kingdom and the United States. The Company’s principal executive offices are located in Greifensee, Switzerland and Columbus, Ohio.

     The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all entities in which the Company has control, which are its majority owned subsidiaries. The interim consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The interim consolidated financial statements should be read in conjunction with the December 31, 2006 and 2005 consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

     The accompanying interim consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. Operating results for the three months ended March 31, 2007 are not necessarily indicative of the results to be expected for the full year ending December 31, 2007.

     The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates. A discussion of the Company’s critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

     All intercompany transactions and balances have been eliminated.

     Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT MARCH 31, 2007 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Trade Accounts Receivable

     Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts represents the Company’s best estimate of probable credit losses in its existing trade accounts receivable.

Inventory

     Inventory is valued at the lower of cost or net realizable value. Cost, which includes direct materials, labor and overhead, is generally determined using the first in, first out (FIFO) method. The estimated net realizable value is based on assumptions for future demand and related pricing. Adjustments to the cost basis of our inventory are made for excess and obsolete items based on forecasted usage, orders and technological obsolescence. If actual market conditions are less favorable than those projected by management, reductions in the value of inventory may be required.

     Inventory consisted of the following:

		March 31,				December 31,
		2007				2006
Raw materials and parts		$	86,521			$	81,596
Work-in-progress			20,387				18,163
Finished goods			53,682				48,613
		$	160,590			$	148,372

Other Intangible Assets

     Other intangible assets include indefinite lived assets and definite-lived assets which are subject to amortization. Where applicable, amortization is charged on a straight-line basis over the expected period to be benefited. The straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. The Company assesses the initial acquisition of intangible assets and the continued accounting for previously recognized intangible assets and goodwill in accordance with SFAS No. 142 “Goodwill and Other Intangible Assets.”

METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT MARCH 31, 2007 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

     Other intangible assets consisted of the following:

		March 31, 2007								December 31, 2006
		Gross				Accumulated				Gross				Accumulated
		Amount				Amortization				Amount				Amortization
Customer relationships		$	73,354			$	(9,616	)		$	73,340			$	(9,166	)
Proven technology and patents			31,128				(15,976	)			30,691				(15,538	)
Tradename (finite life)			1,548				(576	)			1,539				(550	)
Tradename (indefinite life)			22,434				—				22,434				—
		$	128,464			$	(26,168	)		$	128,004			$	(25,254	)

     The annual aggregate amortization expense based on the current balance of other intangible assets is estimated at $4.5 million for 2007 through 2010 and $4.2 million for 2011. The Company had amortization expense associated with the above intangible assets of $1.1 million and $1.2 million for the three months ended March 31, 2007 and 2006, respectively.

     In addition to the above amortization, the Company had amortization expense associated with capitalized software of $1.8 million and $1.7 million for the three months ended March 31, 2007 and 2006, respectively.

Warranty

     The Company generally offers one-year warranties on most of its products. Product warranties are recorded at the time revenue is recognized for certain product shipments. While the Company engages in extensive product quality programs and processes, its warranty obligation is affected by product failure rates, material usage and service costs incurred in correcting a product failure.

     The Company’s accrual for product warranties is included in accrued and other liabilities in the consolidated balance sheets. Changes to the Company’s accrual for product warranties are as follows:

		March 31,				March 31,
		2007				2006
Balance at beginning of period		$	10,977			$	10,732
Accruals for warranties			3,187				3,037
Foreign currency translation			221				(94	)
Payments / utilizations			(3,323	)			(2,830	)
Balance at end of period		$	11,062			$	10,845

METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT MARCH 31, 2007 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

Share-Based Compensation

     On January 1, 2006, the Company adopted SFAS 123R and Staff Accounting Bulletin (“SAB”) 107, “Share-Based Payments”, applying the modified prospective method. The Company recognizes compensation expense in selling, general and administrative expense in the consolidated statement of operations with a corresponding offset to additional paid-in capital in the consolidated balance sheet. The Company had $2.1 million and $2.2 million of share-based compensation expense for the three months ended March 31, 2007 and 2006, respectively.

Research and Development

     Research and development costs primarily consist of salaries, consulting and other costs. The Company expenses these costs as incurred.

3. INCOME TAXES

     On January 1, 2007, the Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. Additionally, FIN 48 provides guidance regarding uncertain tax positions relating to derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of the date of adoption, the Company recognized a $4.1 million increase in the liability for unrecognized tax benefits with a corresponding reduction in retained earnings.

     The Company’s total balance of unrecognized tax benefits as of January 1, 2007 was $24.3 million. Included in this balance are $21.0 million of unrecognized tax benefits that if recognized would reduce the Company’s effective tax rate. The Company recognizes accrued amounts of interest and penalties related to its uncertain tax positions as part of its income tax expense within its consolidated statement of operations. The amount of accrued interest and penalties included within other non-current liabilities within the Company’s consolidated balance sheet as of January 1, 2007 was $1.2 million.

     The Company believes it is reasonably possible that the unrecognized tax benefit balance could increase over the next 12 months primarily relating to potential disputes raised by taxing authorities over income and expense recognition. An estimate of the range of these increases cannot currently be made.

     As of March 31, 2007, no material changes in the Company’s uncertain tax positions have occurred since the adoption of FIN 48 on January 1, 2007.

     As of March 31, 2007, the major jurisdictions for which the Company is subject to examinations are Germany, Switzerland and the United States for years after 2002, France after 2003, the United Kingdom after 2004 and China after 2005.

METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT MARCH 31, 2007 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

4. TREASURY STOCK

     The Company has a share repurchase program. Under the program, the Company has been authorized to buy back up to $900 million of equity shares. As of March 31, 2007, there were $294.2 million of remaining equity shares authorized to be repurchased under the plan by December 31, 2008. The share repurchases are expected to be funded from cash balances, borrowings and cash generated from operating activities. Repurchases will be made through open market transactions, and the timing will depend on the level of acquisition activity, business and market conditions, the stock price, trading restrictions and other factors. The Company has purchased 10.4 million shares since the inception of the program through March 31, 2007.

     During the three months ended March 31, 2007 and 2006, the Company spent $71.5 million and $67.9 million on the repurchase of 838,000 shares and 1,153,600 shares at an average price of $85.29 and $58.87, respectively. An additional $5.4 million were cash settled during the three month period ended March 31, 2007 related to the settlement of a liability for shares repurchased as of December 31, 2006. The Company reissued 180,751 shares and 516,778 shares held in treasury for the exercise of stock options for the three months ended March 31, 2007 and 2006, respectively.

5. EARNINGS PER COMMON SHARE

     In accordance with the treasury stock method, the Company has included the following common equivalent shares in the calculation of diluted weighted average number of common shares outstanding for the three month periods ended March 31, relating to outstanding stock options and restricted stock units.

		2007				2006
Three months ended			866,198				723,219

     Outstanding options and restricted stock units to purchase 352,700 and 451,000 shares of common stock for the three month periods ended March 31, 2007 and 2006, respectively, have been excluded from the calculation of diluted weighted average number of common shares on the grounds that such options and restricted stock units would be anti-dilutive.

6. NET PERIODIC BENEFIT COST

     Net periodic cost for the Company’s defined benefit pension plans and U.S. post-retirement medical plan includes the following components for the three months ended March 31:

METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT MARCH 31, 2007 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

																		Other U.S.
		U.S. Pension Benefits								Non-U.S. Pension Benefits								Post-retirement benefits
		2007				2006				2007				2006				2007				2006
Service cost, net		$	170			$	165			$	3,922			$	3,380			$	101			$	63
Interest cost on projected benefit obligations			1,590				1,557				4,610				3,934				331				330
Expected return on plan assets			(2,072	)			(2,012	)			(6,639	)			(5,719	)			—				—
Net amortization and deferral			—				—				—				—				(239	)			(239	)
Actuarial losses (gains)			515				646				210				70				—				—
Net periodic pension cost		$	203			$	356			$	2,103			$	1,665			$	193			$	154

     As previously disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2006, the Company expects to make normal employer contributions of approximately $9.2 million to its non-U.S. pension plans and $2.3 million to its U.S. post-retirement medical plan during the year ended December 31, 2007.

7. OTHER INCOME, NET

     Other income, net consists primarily of interest income, (gains) losses from foreign currency transactions, (gains) losses from sales of assets and other items.

8. SEGMENT REPORTING

     As disclosed in Note 15 to the Company’s consolidated financial statements for the year ending December 31, 2006, operating segments are the individual reporting units within the Company. These units are managed separately and it is at this level where the determination of resource allocation is made. The units have been aggregated based on operating segments in geographic regions that have similar economic characteristics and meet the aggregation criteria of SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS 131”). The Company has determined there are five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other.

     The Company evaluates segment performance based on Segment Profit (gross profit less research and development, selling, general and administrative expenses and restructuring, before amortization, interest expense and other (income) charges, net and taxes).

METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT MARCH 31, 2007 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

     The following tables show the operations of the Company’s operating segments:

		Net Sales to				Net Sales to
For the three months ended		External				Other				Total Net				Segment
March 31, 2007		Customers				Segments				Sales				Profit				Goodwill
U.S. Operations		$	140,681			$	10,990			$	151,671			$	17,029			$	273,024
Swiss Operations			23,117				63,172				86,289				18,341				23,917
Western European Operations			134,234				20,094				154,328				12,459				117,728
Chinese Operations			31,122				19,882				51,004				10,529				1,871
Other (a)			58,610				534				59,144				4,855				17,917
Eliminations and Corporate (b)			—				(114,672	)			(114,672	)			(14,506	)			—
Total		$	387,764			$	—			$	387,764			$	48,707			$	434,457

		Net Sales to				Net Sales to
For the three months ended		External				Other				Total Net				Segment
March 31, 2006		Customers				Segments				Sales				Profit				Goodwill
U.S. Operations		$	128,618			$	10,230			$	138,848			$	14,538			$	272,664
Swiss Operations			20,570				56,017				76,587				15,147				22,776
Western European Operations			119,716				16,787				136,503				8,958				108,745
Chinese Operations			24,665				16,592				41,257				9,539				1,843
Other (a)			52,591				91				52,682				3,716				17,706
Eliminations and Corporate (b)			—				(99,717	)			(99,717	)			(13,628	)			—
Total		$	346,160			$	—			$	346,160			$	38,270			$	423,734

     A reconciliation of Segment Profit to earnings before taxes for the three months ended March 31 follows:

		Three months ended
		March 31,				March 31,
		2007				2006
Earnings before taxes		$	41,684			$	33,877
Amortization			2,925				2,855
Interest expense			4,460				4,076
Other income, net			(362	)			(2,538	)
Segment profit		$	48,707			$	38,270

METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT MARCH 31, 2007 – Unaudited (Continued)
(In thousands, except share data, unless otherwise stated)

9. RELATED PARTY TRANSACTIONS

     As part of the Rainin acquisition, the Company entered into an agreement to lease certain property from the former owner and General Manager of Rainin. During the three months ended March 31, 2007 and 2006, the Company made lease payments in respect of this agreement of $0.6 million. All of the Company’s transactions with the former owner of Rainin were in the normal course of business.

10. CONTINGENCIES

     The Company is party to various legal proceedings, including certain environmental matters, incidental to the normal course of business. Management does not expect that any of such proceedings will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Unaudited Interim Consolidated Financial Statements included herein.

General

     Our interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a basis which reflects the interim consolidated financial statements of Mettler-Toledo International Inc. Operating results for the three months ended March 31, 2007 are not necessarily indicative of the results to be expected for the full year ending December 31, 2007.

Results of Operations – Consolidated

     The following tables set forth certain items from our interim consolidated statements of operations for the three month periods ended March 31, 2007 and 2006 (amounts in thousands).

		Three months ended March 31,
		2007								2006
		(unaudited)				%				(unaudited)				%
Net sales		$	387,764				100.0			$	346,160				100.0
Cost of sales			196,285				50.6				175,820				50.8
Gross profit			191,479				49.4				170,340				49.2
Research and development			21,336				5.5				19,939				5.7
Selling, general and administrative			121,436				31.3				112,131				32.4
Amortization			2,925				0.8				2,855				0.8
Interest expense			4,460				1.2				4,076				1.2
Other charges (income), net			(362	)			(0.1	)			(2,538	)			(0.7	)
Earnings before taxes			41,684				10.7				33,877				9.8
Provision for taxes			11,254				2.9				10,162				2.9
Net earnings		$	30,430				7.8			$	23,715				6.9

     Net Sales

     Net sales were $387.8 million for the three months ended March 31, 2007, compared to $346.2 million for the corresponding period in 2006. This represents an increase in U.S. dollars of 12% for the three months ended March 31, 2007. Excluding the effect of currency exchange rate fluctuations, or in local currencies, net sales increased 8% for the three months ended March 31, 2007.

     During the three months ended March 31, 2007, our net sales by geographic destination in local currencies increased by 10% in the Americas, by 4% in Europe and by 11% in Asia/Rest of World. A discussion of sales by operating segment is included below.

     As described in Note 15 to our consolidated financial statements for the year ending December 31, 2006, our net sales comprise product sales of precision instruments and related services. Service revenues are primarily derived from regulatory compliance qualification, calibration, certification and repair services, much of which are provided under separately priced contracts, as well as sales of spare parts.

     Net sales of products increased by 12% in U.S. dollars during the three months ended March 31, 2007 compared to the corresponding period and by 8% in local currencies. Service revenue (including spare parts) increased by 11% in U.S. dollars during the three months ended March 31, 2007 compared to the corresponding period in 2006 and by 6% in local currencies.

     Net sales for our laboratory-related products increased 5% in local currencies during the three months ended March 31, 2007, with strong growth in process analytics, laboratory balances and analytical instruments.

     Net sales of our industrial-related products increased 9% in local currencies for the three months ended March 31, 2007, due to solid growth in our core industrial and product inspection products, especially x-ray, as well as strong transportation and logistics project activity.

     In our food retailing markets, net sales increased 14% in local currencies during the three months ended March 31, 2007 due to increased sales in the U.S. and Asia. Retail sales in the U.S. benefited from strong project activity and sales associated with products we have announced for phase-out. The food retailing markets also continue to experience strong growth in software solutions.

     Gross profit

     Gross profit as a percentage of net sales was 49.4% for the three months ended March 31, 2007, compared to 49.2% for the corresponding period in 2006.

     Gross profit as a percentage of net sales for products was 54.2% for the three months ended March 31, 2007, compared to 53.6% for the corresponding period in 2006. Gross profit as a percentage of net sales for services (including spare parts) was 34.2% for the three months ended March 31, 2007, compared to 35.6% for the corresponding period in 2006.

     The increase in gross profit reflects benefits from our sales volume leveraging our fixed production costs and our cost rationalization initiatives. This was offset in part by unfavorable product mix and foreign currency.

     Research and development and selling, general and administrative expenses

     Research and development expenses as a percentage of net sales were 5.5% for the three months ended March 31, 2007, compared to 5.7% for the corresponding period in 2006. Research and development expenses increased 3%, in local currencies, during the three months ended March 31, 2007, compared to the corresponding period in 2006. Our research and development spending levels reflect improved productivity and the timing of projects.

     Selling, general and administrative expenses as a percentage of net sales were 31.3% for the three months ended March 31, 2007, compared to 32.4% for the corresponding period in 2006. Selling, general and administrative expenses increased 4%, in local currencies, during the three months ended March 31, 2007, compared to the corresponding periods in 2006. This is primarily due to continued sales and marketing investments, especially in China, as well as higher performance related compensation costs, offset in part by savings from our cost reduction programs implemented during the second half of 2006.

     Interest expense, other income, net, taxes and net earnings

     Interest expense was $4.5 million for the three months ended March 31, 2007 compared to $4.1 million for the corresponding period in 2006. The increase is due to higher average borrowing rates in 2007 offset in part by reduced borrowings versus the comparable period in 2006.

     Other income, net consists primarily of interest income, as well as (gains) losses from foreign currency transactions, and other items. The decrease in other income, net of $2.2 million compared to the prior year is primarily due to lower interest income associated with the decrease in cash balances resulting from share repurchases. For the three months ended March 31, 2006, other income, net includes increased interest income associated with higher cash balances in the U.S. as a result of our foreign earnings repatriation during 2005 associated with the American Jobs Creation Act of 2004.

     The provision for taxes is based upon our projected annual effective tax rate of 27% and 30% for the three months ended March 31, 2007 and 2006, respectively.

     Net earnings were $30.4 million during the three months ended March 31, 2007 compared to net earnings of $23.7 million during the three months ended March 31, 2006. The increase in net earnings primarily reflects improved sales volume in 2007 leveraging our fixed production costs and benefits associated with the implementation of a legal reorganization that resulted in a reduction of the estimated annual effective tax rate from 30% to 27%.

     Net earnings per diluted share were $0.78 during the three months ended March 31, 2007 compared to $0.57 during the three months ended March 31, 2006, which is an increase of 37%. In addition to our improved net earnings, the increase in net earnings per diluted share also benefits from our share repurchase program.

Results of Operations – by Operating Segment

     The following is a discussion of the financial results of our operating segments. We currently have five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other. A more detailed description of these segments is outlined in Note 15 to our consolidated financial statements for the year ending December 31, 2006.

     U.S. Operations

		Three months ended March 31
		2007				2006				%1)
Total net sales		$	151,671			$	138,848				9	%
Net sales to external customers		$	140,681			$	128,618				9	%
Segment profit		$	17,029			$	14,538				17	%

     The increase in total net sales and net sales to external customers for the three months ended March 31, 2007 reflects growth across most product lines, particularly our food retailing products due to strong project activity and sales associated with products we have announced for phase-out, as well as continued growth in our in-store retail software solutions.

     Segment profit increased $2.5 million for the three months ended March 31, 2007 compared to the corresponding period in 2006. The increase in segment profit was primarily due to increased sales volume, leveraging our fixed production costs and benefits of our cost reduction programs.

     Swiss Operations

		Three months ended March 31
		2007				2006				%1)
Total net sales		$	86,289			$	76,587				13	%
Net sales to external customers		$	23,117			$	20,570				12	%
Segment profit		$	18,341			$	15,147				21	%

     Total net sales and sales to external customers in local currency increased 7% for the three month period ended March 31, 2007. The increase in sales to external customers related primarily to solid growth in our laboratory-related and industrial-related products offset in part by reduced project activity in our food retailing markets. We also experienced strong export sales growth to emerging markets.

     Segment profit increased $3.2 million for the three months ended March 31, 2007 compared to the corresponding period in 2006. The increase in segment profit in 2007 is primarily due to increased sales volume, favorable product mix, and favorable currency translation fluctuations, partially offset by higher research and development expense.

     Western European Operations

		Three months ended March 31
		2007				2006				%1)
Total net sales		$	154,328			$	136,503				13	%
Net sales to external customers		$	134,234			$	119,716				12	%
Segment profit		$	12,459			$	8,958				39	%

     Total net sales increased 4% in local currency for the three months ended March 31, 2007. Net sales in local currency to external customers increased 3% for the three month period compared to the corresponding period in 2006. We experienced particularly strong sales growth in our industrial and laboratory related products due to benefits from our sales and marketing initiatives as well as improved market conditions, partially offset by a decline in our food retailing products related to strong project activity in the prior year.

     Segment profit increased $3.5 million for the three months ended March 31, 2007 compared to the corresponding period in 2006. The increase in segment profit is principally a result of increased sales volume and benefits of our cost reduction programs.

     Chinese Operations

		Three months ended March 31
		2007				2006				%1)
Total net sales		$	51,004			$	41,257				24	%
Net sales to external customers		$	31,122			$	24,665				26	%
Segment profit		$	10,529			$	9,539				10	%

     Total net sales increased 19% in local currency for the three months ended March 31, 2007. Net sales in local currency to external customers increased 22% for the three month period compared to the corresponding period in 2006. These increases were due to continued sales growth for all product lines, in particular industrial-related products.

     Segment profit increased $1.0 million for the three months ended March 31, 2007 compared to the corresponding period in 2006. The increase in segment profit is primarily due to the continued improvement in sales volume and our ability to leverage our fixed production costs. The increase is partially offset by continued investments in sales and marketing.

     Other

		Three months ended March 31
		2007				2006				%1)
Total net sales		$	59,144			$	52,682				12	%
Net sales to external customers		$	58,610			$	52,591				11	%
Segment profit		$	4,855			$	3,716				31	%

     Total net sales increased 10% in local currency for the three months ended March 31, 2007. Net sales in local currency to external customers increased 9% for the three month period compared to the corresponding period in 2006. This performance reflects increased sales in our Eastern European, Other North American and Other Asian Pacific markets.

     Segment profit increased $1.1 million for the three months ended March 31, 2007 compared to the corresponding period in 2006. Segment profit increased during the three months ended March 31, 2007 primarily due to the strong sales volume and benefits from our cost reduction programs.

Liquidity and Capital Resources

     Liquidity is our ability to generate sufficient cash flows from operating activities to meet our obligations and commitments. In addition, liquidity includes the ability to obtain appropriate financing. Currently, our liquidity needs arise primarily from working capital requirements, capital expenditures, share repurchases and acquisitions.

     Cash provided by operating activities totaled $32.3 million in the three months ended March 31, 2007, compared to $19.1 million in the corresponding period in 2006. The increase in 2007 resulted principally from improved operating results and a reduction in tax payments which included a $6 million tax refund, offset in part by approximately $11 million of higher payments related to 2006 performance related compensation incentives (bonus payments) compared to the corresponding period in 2006. Operating cash flows for the three months ended March 31, 2007 and 2006 excludes excess tax benefits from share-based payment arrangements of $2.5 million and $5.6 million, respectively. These benefits have been classified as financing activities pursuant to SFAS 123R.

     We continue to explore potential acquisitions. In connection with any acquisition, we may incur additional indebtedness.

     Capital expenditures are made primarily for investments in information systems and technology, machinery, equipment and the purchase and expansion of facilities. Our capital expenditures totaled $7.9 million for the three months ended March 31, 2007 compared to $6.0 million in the corresponding period in 2006. We expect capital expenditures to increase as our business grows, and to fluctuate as currency exchange rates change.

     Senior Notes and Credit Facility Agreement

     Our short-term borrowings and long-term debt consisted of the following at March 31, 2007.

		March 31, 2007
						Other principal
		U.S. dollar				trading currencies				Total
$150m Senior notes (net of unamortized discount)		$	149,595			$	—			$	149,595
Credit facility			—				170,229				170,229
Other local arrangements (long-term)			—				11,092				11,092
Total long-term debt			149,595				181,321				330,916
Other local arrangements (short-term)			7				12,339				12,346
Total debt		$	149,602			$	193,660			$	343,262

     As of March 31, 2007, we had $270.1 million of availability remaining under our credit facility. Changes in exchange rates between the currencies in which we generate cash flows and the currencies in which our borrowings are denominated affect our liquidity. In addition, because we borrow in a variety of currencies, our debt balances fluctuate due to changes in exchange rates.

     We currently believe that cash flow from operating activities, together with liquidity available under our Amended Credit Agreement and local working capital facilities, will be sufficient to fund currently anticipated working capital needs and capital spending requirements.

     Share repurchase program

     We have a share repurchase program. Under the program, we are authorized to buy back up to $900 million of equity shares. As of March 31, 2007, there were $294.2 million of remaining equity shares authorized to be repurchased under the plan by December 31, 2008. The share repurchases are expected to be funded from cash balances, borrowings and cash generated from operating activities. Repurchases will be made through open market transactions, and the timing will depend on the level of acquisition activity, business and market conditions, the stock price, trading restrictions and other factors. We have purchased 10.4 million shares since the inception of the program through March 31, 2007.

     We spent $71.5 million and $67.9 million on the repurchase of 838,000 shares and 1,153,600 shares at an average price of $85.29 and $58.87 during the three months ended March 31, 2007 and 2006, respectively, as well as an additional $5.4 million during the three month period ended March 31, 2007 relating to the settlement of shares repurchased as of December 31, 2006. See Part II Item 2 regarding details of the share repurchase program for the three months ended March 31, 2007. The Company reissued 180,751 shares and 516,778 shares held in treasury for the exercise of stock options for the three months ended March 31, 2007 and 2006, respectively.

Effect of Currency on Results of Operations

     Because we conduct operations in many countries, our operating income can be significantly affected by fluctuations in currency exchange rates. Swiss franc-denominated expenses represent a much greater percentage of our operating expenses than Swiss franc-denominated sales represent of our net sales. In part, this is because most of our manufacturing costs in Switzerland relate to products that are sold outside Switzerland. Moreover, a substantial percentage of our research and development expenses and general and administrative expenses are incurred in Switzerland. Therefore, if the Swiss franc strengthens against all or most of our major trading currencies (e.g., the U.S. dollar, the euro, other major European currencies and the Japanese yen), our operating profit is reduced. We also have significantly more sales in European currencies (other than the Swiss franc) than we have expenses in those currencies. Therefore, when European currencies weaken against the U.S. dollar and the Swiss franc, it also decreases our operating profits. Accordingly, the Swiss franc exchange rate to the euro is an important cross-rate monitored by the Company. We estimate that a 1% strengthening of the Swiss franc against the euro would result in a decrease in our earnings before tax of approximately $1 million on an annual basis. In addition to the effects of exchange rate movements on operating profits, our debt levels can fluctuate due to changes in exchange rates, particularly between the U.S. dollar and the Swiss franc. Based on our outstanding debt at March 31, 2007, we estimate that a 10% weakening of the U.S. dollar against the currencies in which our debt is denominated would result in an increase of approximately $21.5 million in the reported U.S. dollar value of the debt.

New Accounting Pronouncements

     See Note 3 to the interim consolidated financial statements.

Forward-Looking Statements and Associated Risks

     Some of the statements in this quarterly report 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 relate to future events or our future financial performance, including, but not limited to, strategic plans, annual amortization expense, outcome of litigation, effect of potential loss of licensed rights, potential growth opportunities in both developed markets and emerging markets, planned research and development efforts, product introductions and innovation, manufacturing capacity, expected customer demand, meeting customer expectations, planned operational changes and productivity improvements, research and development expenditures, competitors’ product development, expected capital expenditures, source of funding, method and timing of share repurchases, timing and effect of potential exercises of options, future cash sources and requirements, liquidity, impact of taxes, impact of changes in tax laws, expected compliance with laws, impact of environmental costs and environmental proceedings, expected pension contribution, expected cost savings and benefits of completed or future acquisitions, which involve known and unknown risks, impact of currency fluctuations, 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. These statements are only predictions. Actual events or results may differ materially because of market conditions in our industries or other factors. Moreover, we do not, nor does any other person, assume responsibility for the accuracy and completeness of those statements. Unless otherwise required by applicable laws, we disclaim any intention or obligation to publicly update or revise any of the forward-looking statements after the date of this quarterly report to conform them to actual results, whether as a result of new information, future events, or otherwise. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under the caption, “Factors affecting our future operating results” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2006, which describes risks and factors that could cause results to differ materially from those projected in those forward-looking statements.

     We caution the reader that the above list of risks and factors that may affect results addressed in the forward-looking statements may not be exhaustive. Other sections of this quarterly report and other documents incorporated by reference may describe additional risks or factors that could adversely impact our business and financial performance. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict these new risk factors, nor can it assess the impact, if any, of these new risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those projected in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     As of March 31, 2007, there was no material change in the information provided under Item 7A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

Item 4. Controls and Procedures

     Our management carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report under the supervision and with the participation of our disclosure committee, our CFO and CEO. Based upon that evaluation, our CFO and CEO concluded that our disclosure controls and procedures are effective in permitting us to comply with our disclosure obligations and ensure that the material information required to be disclosed is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. There were no changes in our internal controls over financial reporting during the three months ended March 31, 2007 that have materially affected, or are reasonably likely to materially affect, our controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings. None

Item 1A. Risk Factors.

     For the three months ended March 31, 2007 there were no material changes from risk factors as disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

     Issuer Purchases of Equity Securities

										(c)				(d)
										Total Number of				Maximum Number
										Shares				(or Approximate
										Purchased as				Dollar Value) of
		(a)				(b)				Part of Publicly				Shares that May Yet
		Total Number of				Average				Announced				Be Purchased Under
		Shares				Price Paid per				Plans or				the Plans or
		Purchased				Share				Programs				Programs
January 1 to January 31, 2007			238,000			$	79.55				238,000			$	346,745
February 1 to February 28, 2007			270,000			$	86.84				270,000			$	323,292
March 1 to March 31, 2007			330,000			$	88.16				330,000			$	294,192
Total			838,000			$	85.29				838,000			$	294,192

     The Company has a share repurchase program. Under the program the Company has been authorized to buy back up to $900 million of equity shares. As of March 31, 2007, there were $294.2 million of remaining equity shares authorized to be repurchased under the plan by December 31, 2008. The Company has purchased 10.4 million shares since the inception of the program, announced February 2004, through March 31, 2007.

     The Company spent $71.5 million and $67.9 million on the repurchase of 838,000 shares and 1,153,600 shares at an average price of $85.29 and $58.87 during the three months ended March 31, 2007 and 2006, respectively, as well as an additional $5.4 million during the three month period ended March 31, 2007, related to the settlement of shares repurchased as of December 31, 2006. The Company reissued 180,751 shares and 516,778 shares held in treasury for the exercise of stock options for the three months ended March 31, 2007 and 2006, respectively.

Item 3. Defaults Upon Senior Securities. None

Item 4. Submission of Matters to a Vote of Security Holders. None

Item 5. Other information. None

Item 6. Exhibits.

	31.1		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
	31.2		Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
	32		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.