PR Newswire | Jul 30, 2020 04:10PM EDT

07/30 15:10 CDT

Mettler-Toledo International Inc. Reports Second Quarter 2020 Results COLUMBUS, Ohio, July 30, 2020

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 ResultsEPS 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 ResultsAdjusted 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 ResultsEPS 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 ResultsAdjusted 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 in2019.

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 periodin 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 in2019.

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 periodin 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 FREECASH 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:

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(a) 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.

Represents the EPS impact of purchased intangibles amortization, net of tax of(b) $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.

Represents the EPS impact of the difference between our quarterly and estimated(c) 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.

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SOURCE Mettler-Toledo International Inc.