Mettler-Toledo International Inc. Reports Second Quarter 2020 Results

COLUMBUS, Ohio, July 30, 2020 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2020.  Provided below are the highlights:

  • Reported sales decreased 6% compared with the prior year.  In local currency, sales decreased 4% in the quarter as currency reduced sales by 2%. 
  • Net earnings per diluted share as reported (EPS) were $5.22, compared with $5.06 in the prior-year period.  Adjusted EPS was $5.29, an increase of 3% over the prior-year amount of $5.16.  Adjusted EPS is a non-GAAP measure, and a reconciliation to EPS is included on the last page of the attached schedules. 

Second Quarter Results

Olivier Filliol, President and Chief Executive Officer, stated, "Demand in our end markets was negatively impacted by COVID-19; however, our sales decline was more modest than expected. Good growth in China and the resiliency and diversity of our Laboratory and Industrial businesses contributed to our better-than-expected performance.  We are pleased with positive growth in Adjusted EPS and strong cash flow generation in the quarter given the challenges of the current environment."

GAAP Results
EPS in the quarter was $5.22, compared with the prior-year amount of $5.06.  

Compared with the prior year, total reported sales decreased 6% to $690.7 million.  By region, reported sales decreased 8% in the Americas, 6% in Europe and 2% in Asia/Rest of World. Earnings before taxes amounted to $155.3 million, compared with $155.2 million in the prior year. 

Non-GAAP Results
Adjusted EPS was $5.29, an increase of 3% over the prior-year amount of $5.16.     

Compared with the prior year, total sales in local currency decreased 4% as currency reduced reported sales growth by 2%.  By region, local currency sales decreased 7% in the Americas and 5% in Europe and increased 1% in Asia/Rest of World.  Adjusted Operating Profit amounted to $176.6 million, a 1% decline from the prior-year amount of $177.7 million

Adjusted EPS and Adjusted Operating Profit are non-GAAP measures. Reconciliations to the most comparable GAAP measures are provided in the attached schedules.

Six Month Results

GAAP Results
EPS was $9.25, compared with the prior-year amount of $9.48

Compared with the prior year, total reported sales decreased 5% to $1.340 billion.  By region, reported sales decreased 3% in the Americas, 7% in Europe and 6% in Asia/Rest of World.  Earnings before taxes amounted to $273.8 million, compared with $280.9 million in the prior year. 

Non-GAAP Results
Adjusted EPS was $9.28, compared with the prior-year amount of $9.26.     

Compared with the prior year, total sales in local currency decreased 3% as currency reduced reported sales by 2%.  By region, local currency sales decreased 2% in the Americas, 5% in Europe and 3% in Asia/Rest of World.  Adjusted Operating Profit amounted to $317.9 million, a 2% decrease from the prior-year amount of $325.6 million

Adjusted EPS and Adjusted Operating Profit are non-GAAP measures. Reconciliations to the most comparable GAAP measures are provided in the attached schedules.

Outlook

The Company stated that forecasting continues to be challenging given the significant uncertainty surrounding COVID-19 and ensuing impact to the global economic environment. While the Company is providing an estimate for sales growth and Adjusted EPS for 2020, management cautions that market dynamics and impacts related to COVID-19 are fluid and changes to the business environment can happen quickly. The estimates for the third quarter and full year 2020 include significant uncertainty and management acknowledges that market conditions are subject to change. 

For the third quarter 2020, based on management's current estimate of market conditions, the Company estimates that local currency sales will decline approximately -1% to -3%, and Adjusted EPS is forecasted to be in the range of $5.80 to $6.00.

For the full year 2020, the Company estimates that local currency sales will decline approximately -1% to -3%, and Adjusted EPS is forecasted to be in the range of $22.70 to $23.20.

While the Company has provided an outlook for local currency sales growth and Adjusted EPS, it has not provided an outlook for reported sales growth or EPS as it would require an estimate of currency exchange fluctuations and non-recurring items, which are not yet known. 

Conclusion

Filliol concluded, "We quickly adapted our operating model to the challenges of COVID-19 with priority placed on the safety and well-being of our employees while continuing to provide leading-edge instruments and services to our customers. Overall demand in our end markets continues to be negatively impacted by COVID-19. While the majority of our sales are to essential end markets including life sciences and food manufacturing, we also benefit from significant diversification in our product offering. We believe we are continuing to gain share despite the environment and will be strongly positioned to capture growth as our end markets recover."

Other Matters

The Company will host a conference call to discuss its quarterly results today (Thursday, July 30) 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 (NYSE: MTD) is a leading global supplier of precision instruments and services. We have strong leadership positions in all of our businesses and believe we hold global number-one market positions in most of them. We are recognized as an innovation leader and our solutions are critical in key R&D, quality control and manufacturing processes for customers in a wide range of industries including life sciences, food and chemicals. Our sales and service network is one of the most extensive in the industry. Our products are sold in more than 140 countries and we have a direct presence in approximately 40 countries. With proven growth strategies and a focus on execution, we have achieved a long-term track record of strong financial performance. For more information, please visit 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. You should not rely on forward-looking statements to predict our actual results. Our actual results or performance may be materially different than reflected in forward-looking statements because of various risks and uncertainties, including statements about expected revenue growth and long-term impacts of the COVID-19 pandemic. 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." We make forward-looking statements about future events or our future financial performance, including earnings and sales growth, earnings per share, strategic plans and contingency plans, growth opportunities or economic downturns, our ability to respond to changes in market conditions, customer demand, our competitive position, pricing, our supply chain, adequacy of our facilities, access to and the costs of raw materials, shipping and supplier costs, gross margins, planned research and development efforts and product introductions, capital expenditures, cash flow, tax-related matters, the impact of foreign currencies, compliance with laws, effects of acquisitions and the impact of the COVID-19 pandemic on our businesses. Our forward-looking statements may not be accurate or complete, and we do not intend to update or revise them in light of actual results. New risks also periodically arise. Please consider the risks and factors that could cause our results to differ materially from what is described in our forward-looking statements, including the uncertain duration and severity of the COVID-19 pandemic. See in particular "Factors Affecting Our Future Operating Results" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2019 and other reports filed with the SEC from time to time.

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)
























Three months ended








Three months ended










June 30, 2020


% of sales



June 30, 2019


% of sales






















Net sales



$690,673


(a)


100.0





$731,366




100.0



Cost of sales



292,703




42.4





311,828




42.6



Gross profit



397,970




57.6





419,538




57.4























Research and development



31,193




4.5





36,582




5.0



Selling, general and administrative 



190,134




27.5





205,215




28.1



Amortization



13,889




2.0





12,326




1.7



Interest expense



9,582




1.4





8,882




1.2



Restructuring charges



860




0.1





2,891




0.4



Other charges (income), net



(2,943)




(0.4)





(1,574)




(0.2)



Earnings before taxes



155,255




22.5





155,216




21.2























Provision for taxes



28,693




4.2





28,056




3.8



Net earnings



$126,562




18.3





$127,160




17.4























Basic earnings per common share:



















Net earnings 



$5.29









$5.15







Weighted average number of common shares



23,940,278









24,698,032



























Diluted earnings per common share:



















Net earnings 



$5.22









$5.06







Weighted average number of common 



24,228,989









25,118,352







  and common equivalent shares







































Note:



















(a)     Local currency sales decreased 4% as compared to the same period in 2019.























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT
























Three months ended








Three months ended










June 30, 2020


% of sales



June 30, 2019


% of sales






















Earnings before taxes



$155,255









$155,216







Amortization



13,889









12,326







Interest expense



9,582









8,882







Restructuring charges



860









2,891







Other charges (income), net



(2,943)









(1,574)







Adjusted operating profit



$176,643


(b)


25.6





$177,741




24.3























Note:



















(b)     Adjusted operating profit decreased 1% as compared to the same period in 2019.



 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)
























Six months ended








Six months ended










June 30, 2020


% of sales



June 30, 2019


% of sales


















Net sales



$1,339,835


(a)


100.0





$1,410,818




100.0



Cost of sales



567,456




42.4





602,961




42.7



Gross profit



772,379




57.6





807,857




57.3























Research and development



65,580




4.9





72,635




5.1



Selling, general and administrative 



388,878




29.0





409,640




29.0



Amortization



27,887




2.1





24,548




1.7



Interest expense



19,801




1.5





17,976




1.4



Restructuring charges



2,765




0.2





4,414




0.3



Other charges (income), net



(6,286)




(0.5)





(2,248)




(0.1)



Earnings before taxes



273,754




20.4





280,892




19.9























Provision for taxes



49,077




3.6





41,927




3.0



Net earnings



$224,677




16.8





$238,965




16.9























Basic earnings per common share:



















Net earnings 



$9.37









$9.65







Weighted average number of common shares



23,984,055









24,774,262



























Diluted earnings per common share:



















Net earnings 



$9.25









$9.48







Weighted average number of common 



24,291,321









25,217,359







  and common equivalent shares







































Note:



















(a)     Local currency sales decreased 3% as compared to the same period in 2019.























RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT
























Six months ended








Six months ended










June 30, 2020


% of sales



June 30, 2019


% of sales






















Earnings before taxes



$273,754









$280,892







Amortization



27,887









24,548







Interest expense



19,801









17,976







Restructuring charges



2,765









4,414







Other charges (income), net



(6,286)









(2,248)







Adjusted operating profit



$317,921

(b)


23.7





$325,582




23.1























Note:



















(b)     Adjusted operating profit decreased 2% as compared to the same period in 2019.







 


METTLER-TOLEDO INTERNATIONAL INC.


CONDENSED CONSOLIDATED BALANCE SHEETS


(amounts in thousands)


(unaudited)


























June 30, 2020



December 31, 2019












Cash and cash equivalents



$127,277





$207,785


Accounts receivable, net



490,429





566,256


Inventories



299,746





274,285


Other current assets and prepaid expenses



72,356





61,321


Total current assets



989,808





1,109,647













Property, plant and equipment, net



743,393





748,657


Goodwill and other intangibles assets, net



739,755





742,221


Other non-current assets



206,691





188,796


Total assets



$2,679,647





$2,789,321













Short-term borrowings and maturities of long-term debt



$53,585





$55,868


Trade accounts payable



155,901





185,592


Accrued and other current liabilities



493,343





513,052


Total current liabilities



702,829





754,512













Long-term debt



1,146,590





1,235,350


Other non-current liabilities



380,135





378,679


Total liabilities



2,229,554





2,368,541













Shareholders' equity



450,093





420,780


Total liabilities and shareholders' equity



$2,679,647





$2,789,321













 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)












Three months ended


Six months ended



June 30,


June 30,



2020


2019


2020


2019










Cash flow from operating activities:








    Net earnings

$126,562


$127,160


$224,677


$238,965

    Adjustments to reconcile net earnings to








      net cash provided by operating activities:








  Depreciation

10,194


9,623


20,327


19,390

  Amortization

13,889


12,326


27,887


24,548

  Deferred tax (benefit) expense

(852)


58


(4,570)


(14,881)

  Other

4,423


4,338


8,818


8,820

Increase (decrease) in cash resulting from changes in








  operating assets and liabilities

29,021


(26,435)


(28,387)


(50,977)

                Net cash provided by operating activities

183,237


127,070


248,752


225,865










Cash flows from investing activities:








    Proceeds from sale of property, plant and equipment

1,994


1,144


2,025


1,216

    Purchase of property, plant and equipment

(18,223)


(22,295)


(37,089)


(44,699)

    Acquisitions

(632)


(504)


(6,242)


(504)

    Net hedging settlements on intercompany loans

727


(6,028)


(9,281)


(1,226)

                Net cash used in investing activities

(16,134)


(27,683)


(50,587)


(45,213)










Cash flows from financing activities:








    Proceeds from borrowings

243,830


336,123


1,076,098


638,830

    Repayments of borrowings

(616,806)


(261,083)


(1,168,125)


(532,729)

    Proceeds from exercise of stock options

10,615


8,767


17,750


37,757

    Repurchases of common stock 

-


(186,249)


(200,000)


(372,500)

    Acquisition contingent consideration payment

-


-


-


(10,000)

    Other financing activities

-


1,753


(800)


1,753

                Net cash used in financing activities

(362,361)


(100,689)


(275,077)


(236,889)










Effect of exchange rate changes on cash and cash equivalents

(1,050)


(739)


(3,596)


2,566










Net decrease in cash and cash equivalents

(196,308)


(2,041)


(80,508)


(53,671)










Cash and cash equivalents:








    Beginning of period

323,585


126,480


207,785


178,110

    End of period

$127,277


$124,439


$127,277


$124,439



















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










Net cash provided by operating activities

$183,237


$127,070


$248,752


$225,865

    Payments in respect of restructuring activities

3,001


3,154


4,627


6,846

    Transition tax payment

-


4,289


-


4,289

    Proceeds from sale of property, plant and equipment

1,994


1,144


2,025


1,216

    Purchase of property, plant and equipment

(18,223)


(22,295)


(37,089)


(44,699)

Adjusted free cash flow

$170,009


$113,362


$218,315


$193,517










 

METTLER-TOLEDO INTERNATIONAL INC.


OTHER OPERATING STATISTICS




























SALES GROWTH BY DESTINATION


(unaudited)



















Europe


Americas


Asia/RoW

Total
















U.S. Dollar Sales Growth (Decrease)













Three Months Ended June 30, 2020



(6%)


(8%)


(2%)


(6%)




Six Months Ended June 30, 2020



(7%)


(3%)


(6%)


(5%)
















Local Currency Sales Growth (Decrease)













Three Months Ended June 30, 2020



(5%)


(7%)


1%


(4%)




Six Months Ended June 30, 2020



(5%)


(2%)


(3%)


(3%)





























RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 


(unaudited)

















Three months ended

Six months ended



June 30,

June 30,



2020


2019


% Growth


2020


2019


% Growth














EPS as reported, diluted

$5.22


$5.06


3%


$9.25


$9.48


(2%)














Restructuring charges, net of tax

0.03

(a)

0.09

(a)



0.09

(a)

0.14

(a)


Purchased intangible amortization, net of tax

0.12

(b)

0.10

(b)



0.23

(b)

0.21

(b)


Income tax expense

(0.08)

(c)

(0.09)

(c)



(0.29)

(c)

(0.57)

(c)















Adjusted EPS, diluted

$5.29


$5.16


3%


$9.28


$9.26


0%














Notes:












(a)

Represents the EPS impact of restructuring charges of $0.9 million ($0.7 million after tax) and $2.9 million ($2.3 million after tax) for the
three months ended June 30, 2020 and 2019, and $2.8 million ($2.2 million after tax) and $4.4 million ($3.5 million after tax) for the six
months ended June 30, 2020 and 2019, respectively, which primarily include employee related costs.

(b)

Represents the EPS impact of purchased intangibles amortization, net of tax of $2.8 million and $2.6 million for the three months ended June
30, 2020 and 2019, and of $5.6 million and $5.2 million for the six months ended June 30, 2020 and 2019, respectively.

(c)

Represents the EPS impact of the difference between our quarterly and estimated annual tax rate before non-recurring discrete items during
the three and six months ended June 30, 2020 and 2019 due to the timing of excess tax benefits associated with stock option exercises.

 

Cision View original content:http://www.prnewswire.com/news-releases/mettler-toledo-international-inc-reports-second-quarter-2020-results-301103486.html

SOURCE Mettler-Toledo International Inc.

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