MTD 8-K
Mettler Toledo International Inc/ (MTD)
8-K
2022-11-03
For: 2022-11-03
View Original
Added on
April 12, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): | |||||
(Exact name of registrant as specified in its charter)
| File No. | |||||||||||||||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||||||||||||||
| and | ||||||||||||||
| Im Langacher, P.O. Box MT-100 | ||||||||||||||
| CH Greifensee, Switzerland | and 8606 | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: 1-614 -438-4511 and +41-44-944-22-11
| (Former name or former address, if changed since last report.) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition.” The information furnished in this Form 8-K and the Exhibit attached hereto shall not be treated as filed for purposes of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
On November 3, 2022 Mettler-Toledo International Inc. (“Mettler-Toledo”) issued a press release (the “Release”) setting forth its financial results for the three and nine months ended September 30, 2022. A copy of the Release is furnished hereto as Exhibit 99.1 to this report.
Non-GAAP Financial Measures
Mettler-Toledo supplements its U.S. GAAP results with non-GAAP financial measures. The principal non-GAAP financial measures Mettler-Toledo uses are Adjusted Earnings per Share, Adjusted Operating Profit, Adjusted Free Cash Flow and Local Currency Sales Growth.
Adjusted Earnings per Share
Mettler-Toledo defines Adjusted Earnings per Share as diluted earnings per common share excluding certain non-recurring discrete tax items, amortization of purchased intangible assets, net of tax, restructuring charges, net of tax and certain other one-time charges, net of tax. The most directly comparable U.S. GAAP financial measure is diluted earnings per common share.
Mettler-Toledo believes that Adjusted Earnings per Share is important supplemental information for investors. Mettler-Toledo uses this measure because it excludes certain non-recurring discrete tax items, amortization of purchased intangibles, net of tax, restructuring charges, net of tax and certain other one-time charges, net of tax, which management believes are not directly related to current and ongoing operations thereby providing investors with information that helps to compare ongoing operating performance.
Adjusted Earnings per Share is used in addition to and in conjunction with results presented in accordance with U.S. GAAP. Adjusted Earnings per Share is not intended to represent diluted earnings per common share under U.S. GAAP and should not be considered as an alternative to diluted earnings per common share as an indicator of Mettler-Toledo’s performance because of the following limitations.
Limitations of Mettler-Toledo’s non-GAAP measure, Adjusted Earnings per Share
Mettler-Toledo’s non-GAAP measure, Adjusted Earnings per Share, has certain material limitations as follows:
It does not include certain non-recurring discrete tax items, amortization expense of purchased intangibles, net of tax, restructuring charges, net of tax and certain other one-time charges, net of tax. Because non-recurring discrete tax items, amortization of purchased intangibles, restructuring charges and certain other one-time charges are components of diluted earnings per share under U.S. GAAP, any measure that excludes non-recurring discrete tax items, amortization of purchased intangibles, restructuring charges and certain other one-time charges, has material limitations.
2
Adjusted Operating Profit
Mettler-Toledo defines Adjusted Operating Profit as gross profit less research and development and selling, general and administrative expenses before amortization, interest, restructuring charges and other charges (income), net and taxes. The most directly comparable U.S. GAAP financial measure is earnings before taxes.
Mettler-Toledo believes that Adjusted Operating Profit is important supplemental information for investors. Adjusted Operating Profit is used internally as the principal profit measurement by its segments in their reporting to management. Mettler-Toledo uses this measure because it excludes amortization, interest, restructuring charges and other charges (income), net and taxes, which are not allocated to the segments.
On a consolidated basis, Mettler-Toledo also believes Adjusted Operating Profit is an important supplemental method of measuring profitability. It is used internally by senior management for measuring profitability and setting performance targets for managers, and has historically been used as one of the means of publicly providing guidance on possible future results. Mettler-Toledo also believes that Adjusted Operating Profit is an important performance measure because it provides a measure of comparability to other companies with different capital or legal structures, which accordingly may be subject to disparate interest rates and effective tax rates, and to companies which may incur different amortization expenses or impairment charges related to intangible assets.
Adjusted Operating Profit is used in addition to and in conjunction with results presented in accordance with U.S. GAAP. Adjusted Operating Profit is not intended to represent operating income under U.S. GAAP and should not be considered as an alternative to earnings before taxes as an indicator of Mettler-Toledo’s performance because of the following limitations.
Limitations of Mettler-Toledo’s non-GAAP measure, Adjusted Operating Profit
Mettler-Toledo’s non-GAAP measure, Adjusted Operating Profit, has certain material limitations as follows:
| • | It excludes amortization expense. Because this item is recurring, any measure that excludes amortization expense has material limitations. | |||||||
| • | It does not include interest expense. Because Mettler-Toledo has borrowed money to finance some of its operations, interest is a necessary and ongoing part of its costs and has assisted Mettler-Toledo in generating revenue. Therefore any measure that excludes interest expense has material limitations. | |||||||
| • | It excludes restructuring charges. Because restructuring charges are a component of operating income under U.S. GAAP, any measure that excludes restructuring charges, has material limitations. | |||||||
| • | It excludes other charges (income), net. Because other charges (income), net is a component of operating income under U.S. GAAP, any measure that excludes other charges (income), net, has material limitations. | |||||||
Adjusted Free Cash Flow
Mettler-Toledo defines Adjusted Free Cash Flow as net cash provided by operating activities including proceeds from the sale of property, plant and equipment, less capital expenditures, and before restructuring, acquisition cost payments, and tax reform payments. The most directly comparable U.S. GAAP financial measure is net cash provided by operating activities
3
Mettler-Toledo believes Adjusted Free Cash Flow is important supplemental information for investors. It is used internally by senior management for measuring operating cash flow generation and setting performance targets for managers, and has historically been used as one of the means of providing guidance on possible future cash flows.
Adjusted Free Cash Flow is used in addition to and in conjunction with results presented in accordance with U.S. GAAP. Adjusted Free Cash Flow is not intended to represent net cash provided by operating activities recorded under U.S. GAAP and should not be considered as an alternative to net cash provided by operating activities as an indicator of Mettler-Toledo’s performance because of the following limitations.
Limitations of Mettler-Toledo’s non-GAAP measure, Adjusted Free Cash Flow
Mettler-Toledo’s non-GAAP measure, Adjusted Free Cash Flow, has certain material limitations as follows:
| • | It includes proceeds from the sale of property, plant and equipment and purchases of property, plant and equipment, which are not considered to be components of net cash provided by operating activities under U.S. GAAP. It excludes the portion of purchases of property, plant and equipment relating to government contract. Therefore any measure that includes proceeds from the sale of property, plant and equipment and purchases of property, plant and equipment and excludes the portion of purchases of property, plant and equipment relating to government contracts. | |||||||
| • | It excludes restructuring, acquisition payments, and tax reform payments which are considered to be components of net cash provided by operating activities under U.S. GAAP. Therefore any measure that excludes these items has material limitations. | |||||||
Local Currency Sales Growth
Mettler-Toledo defines Local Currency Sales Growth as sales growth excluding the effect of currency exchange rate fluctuations that result from translating activity outside of the United States into U.S. dollars. The most directly comparable U.S. GAAP financial measure is U.S. dollar sales growth.
Mettler-Toledo believes that Local Currency Sales Growth is important supplemental information for investors. Mettler-Toledo believes local currency information provides a helpful assessment of business performance and a useful measure of results between periods.
Local Currency Sales Growth is used in addition to and in conjunction with results presented in accordance with U.S. GAAP. Local Currency Sales Growth is not intended to represent U.S. dollar sales growth under U.S. GAAP and should not be considered as an alternative to U.S. dollar sales growth as an indicator of Mettler-Toledo’s performance because of the following limitations.
Limitations of Mettler-Toledo’s non-GAAP measure, Local Currency Sales Growth
Mettler-Toledo’s non-GAAP measure, Local Currency Sales Growth, has certain material limitations as follows:
It does not include the effect of currency exchange rate fluctuations that result from translating activity outside of the United States into U.S. dollars. Because the effect of changes in foreign currency exchange rates is a component of sales growth under U.S. GAAP, any measure that excludes the effect of changes in foreign currency exchange rates, has material limitations.
Adjusted Earnings per Share, Adjusted Operating Income, Adjusted Free Cash Flow and Local Currency Sales Growth should not be relied upon to the exclusion of U.S. GAAP financial measures, but reflect additional measures of comparability and means of viewing aspects of Mettler-Toledo’s operations that, when viewed together with its U.S. GAAP results and the accompanying reconciliations to net
4
earnings, net cash provided by operating activities and diluted earnings per share, provide a more complete understanding of factors and trends affecting its business.
Because Adjusted Earnings per Share, Adjusted Operating Income, Adjusted Free Cash Flow and Local Currency Sales Growth are not standardized, it may not be possible to compare with other companies’ non-GAAP financial measures having the same or similar names. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
The Release provides a reconciliation of Adjusted Earnings per Share, Adjusted Operating Income and Adjusted Free Cash Flow to the most comparable financial measures recorded under U.S. GAAP. The Release also presents Local Currency Sales Growth in conjunction with its most comparable financial measure recorded under U.S. GAAP.
5
Item 9.01 Financial Statements and Exhibits
| Exhibit No. | Description | |||||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document).* * Submitted electronically with this Report in accordance with the provision of Regulation S-T. | |||||||||||||
6
SIGNATURES
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 hereunto duly authorized.
| METTLER-TOLEDO INTERNATIONAL INC. | ||||||||||||||
| Dated: | November 3, 2022 | By: | /s/ Shawn P. Vadala | |||||||||||
| Shawn P. Vadala | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
7
| FOR IMMEDIATE RELEASE | Exhibit 99.1 | |||||||
METTLER-TOLEDO INTERNATIONAL INC. REPORTS
THIRD QUARTER 2022 RESULTS
COLUMBUS, Ohio, USA – November 3, 2022 – Mettler-Toledo International Inc. (NYSE: MTD) today announced third quarter results for 2022. Provided below are the highlights:
•Reported sales increased 4% compared with the prior year. In local currency, sales increased 10% in the quarter as currency reduced sales growth by 6%.
•Net earnings per diluted share as reported (EPS) were $9.76, compared with $8.71 in the prior-year period. Adjusted EPS was $10.18, an increase of 17% over the prior-year amount of $8.72. Adjusted EPS is a non-GAAP measure, and a reconciliation to EPS is included on the last page of the attached schedules.
Third Quarter Results
Patrick Kaltenbach, President and Chief Executive Officer, stated, “Our team delivered another quarter of strong results, with particularly good results in the Americas and China. We had very good growth in our Laboratory and Core Industrial businesses as our sophisticated sales and marketing programs, our innovative product portfolio, and our supply chain agility continue to be strong competitive advantages. Robust sales growth and effective execution of our margin initiatives resulted in excellent growth in Adjusted Operating Profit and Adjusted EPS, despite significant foreign currency headwinds.”
GAAP Results
EPS in the quarter was $9.76, compared with the prior-year amount of $8.71.
Compared with the prior year, total reported sales increased 4% to $985.8 million. By region, reported sales increased 11% in the Americas, decreased 12% in Europe and increased 7% in Asia/Rest of World. Earnings before taxes amounted to $275.9 million, compared with $247.6 million in the prior year.
Non-GAAP Results
Adjusted EPS was $10.18, an increase of 17% over the prior-year amount of $8.72.
Compared with the prior year, total sales in local currency increased 10% as currency reduced sales growth by 6%. By region, local currency sales increased 11% in the Americas, 1% in Europe and 15% in Asia/Rest of World. Adjusted Operating Profit amounted to $307.2 million, a 13% increase from the prior-year amount of $272.8 million.
Adjusted EPS and Adjusted Operating Profit are non-GAAP measures. Reconciliations to the most comparable GAAP measures are provided in the attached schedules.
Nine Month Results
GAAP Results
EPS was $26.58, compared with the prior-year amount of $22.86.
Compared with the prior year, total reported sales increased 7% to $2,862.0 million. By region, reported sales increased 13% in the Americas, decreased 5% in Europe and increased 10% in Asia/Rest of World. Earnings before taxes amounted to $745.6 million, compared with $663.4 million in the prior year.
-1-
Non-GAAP Results
Adjusted EPS was $27.42, an increase of 17% over the prior-year amount of $23.37.
Compared with the prior year, total sales in local currency increased 11% as currency reduced sales growth by 4%. By region, local currency sales increased 13% in the Americas, 5% in Europe and 15% in Asia/Rest of World. Adjusted Operating Profit amounted to $833.8 million, a 13% increase from the prior-year amount of $738.7 million.
Adjusted EPS and Adjusted Operating Profit are non-GAAP measures. Reconciliations to the most comparable GAAP measures are provided in the attached schedules.
Share Repurchase Authorization
The Company noted it has $1.2 billion remaining under the current authorization for the share repurchase program. The Company announced that the Board of Directors authorized an additional $2.5 billion to the share repurchase program. Any amount remaining under the existing program will be incorporated into the new authorization. Kaltenbach commented, “The additional authorization allows us to continue the share repurchase program that has provided strong returns for our shareholders over many years. We are confident in our future growth prospects, and our balance sheet and cash flow generation remain strong.” The Company expects the additional authorization will be utilized over the next few years. The Company added that the repurchases will be made through open market transactions, and the amount and timing will depend on business and market conditions, stock price, trading restrictions, the level of acquisition activity, and other factors.
Outlook
The Company stated that forecasting remains challenging. Management cautions that market conditions are dynamic and changes to the business environment can occur quickly. There is uncertainty in the economic environment today including challenges in the global supply chain, inflationary pressures, unfavorable foreign currency, the potential economic impacts from COVID-19 and the war in Ukraine. The estimates include uncertainty, and management acknowledges that market conditions are subject to change.
Based on today's assessment of market conditions, management anticipates local currency sales growth for the fourth quarter of 2022 will be approximately 7%, and Adjusted EPS is forecast to be $11.55 to $11.65, a growth rate of 10% to 11%. Included in the fourth quarter guidance is an estimated 10% headwind to Adjusted EPS growth due to adverse currency, which represents a greater headwind to Adjusted EPS than what was contemplated in prior guidance.
For the full year 2022, management anticipates local currency sales growth will be approximately 10%, and Adjusted EPS is forecast to be in the range of $38.95 to $39.05, representing growth of approximately 15%. This compares with previous local currency sales growth guidance of 9% to 10% and Adjusted EPS guidance of $38.85 to $39.05. Included in the 2022 guidance is an estimated 6% headwind to Adjusted EPS growth due to adverse currency.
The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in 2023 will be approximately 5%. This sales growth is expected to result in Adjusted EPS in the range of $42.00 to $42.40. At the midpoint of 2022 guidance, this would result in Adjusted EPS growth in 2023 of 8% to 9%. Included in the 2023 guidance is an estimated 4.5% headwind to Adjusted EPS growth due to adverse currency.
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.
-2-
Conclusion
Kaltenbach concluded, “We continue to strengthen our market position and benefit from the strong execution of our growth initiatives, as well as favorable market trends such as automation and digitalization. Forecasting remains challenging, and we acknowledge there is greater uncertainty in the macroeconomic environment. These uncertainties will require us to remain agile and focus on factors we can control, namely leveraging our strong strategic programs to identify and target profitable growth opportunities. Based on market conditions today, we believe we will generate good sales growth for the remainder of the year and in 2023. Continued execution of our margin and productivity initiatives will support strong financial results.”
Other Matters
The Company will host a conference call to discuss its quarterly results tonight (Thursday, November 3) 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 and ongoing developments in Ukraine. 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 and ongoing developments in Ukraine 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 and ongoing developments in Ukraine. 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, 2021 and other reports filed with the SEC from time to time.
-3-
METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share data)
(unaudited)
| Three months ended | Three months ended | ||||||||||||||||||||||||||||
| September 30, 2022 | % of sales | September 30, 2021 | % of sales | ||||||||||||||||||||||||||
| Net sales | $ | 985,846 | (a) | 100.0 | $ | 951,950 | 100.0 | ||||||||||||||||||||||
| Cost of sales | 401,190 | 40.7 | 396,130 | 41.6 | |||||||||||||||||||||||||
| Gross profit | 584,656 | 59.3 | 555,820 | 58.4 | |||||||||||||||||||||||||
| Research and development | 44,129 | 4.5 | 42,276 | 4.4 | |||||||||||||||||||||||||
| Selling, general and administrative | 233,357 | 23.7 | 240,734 | 25.3 | |||||||||||||||||||||||||
| Amortization | 16,728 | 1.7 | 16,039 | 1.7 | |||||||||||||||||||||||||
| Interest expense | 14,484 | 1.5 | 11,791 | 1.2 | |||||||||||||||||||||||||
| Restructuring charges | 2,022 | 0.2 | 650 | 0.1 | |||||||||||||||||||||||||
| Other charges (income), net | (1,949) | (0.3) | (3,257) | (0.3) | |||||||||||||||||||||||||
| Earnings before taxes | 275,885 | 28.0 | 247,587 | 26.0 | |||||||||||||||||||||||||
| Provision for taxes | 55,288 | 5.6 | 43,899 | 4.6 | |||||||||||||||||||||||||
| Net earnings | $ | 220,597 | 22.4 | $ | 203,688 | 21.4 | |||||||||||||||||||||||
| Basic earnings per common share: | |||||||||||||||||||||||||||||
| Net earnings | $ | 9.85 | $ | 8.83 | |||||||||||||||||||||||||
| Weighted average number of common shares | 22,403,393 | 23,056,924 | |||||||||||||||||||||||||||
| Diluted earnings per common share: | |||||||||||||||||||||||||||||
| Net earnings | $ | 9.76 | $ | 8.71 | |||||||||||||||||||||||||
| Weighted average number of common and common equivalent shares | 22,610,027 | 23,393,579 | |||||||||||||||||||||||||||
| Note: | |||||||||||||||||||||||||||||
| (a) | Local currency sales increased 10% as compared to the same period in 2021. | ||||||||||||||||||||||||||||
| RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT | |||||||||||||||||||||||||||||
| Three months ended | Three months ended | ||||||||||||||||||||||||||||
| September 30, 2022 | % of sales | September 30, 2021 | % of sales | ||||||||||||||||||||||||||
| Earnings before taxes | $ | 275,885 | $ | 247,587 | |||||||||||||||||||||||||
| Amortization | 16,728 | 16,039 | |||||||||||||||||||||||||||
| Interest expense | 14,484 | 11,791 | |||||||||||||||||||||||||||
| Restructuring charges | 2,022 | 650 | |||||||||||||||||||||||||||
| Other charges (income), net | (1,949) | (3,257) | |||||||||||||||||||||||||||
| Adjusted operating profit | $ | 307,170 | (b) | 31.2 | $ | 272,810 | 28.7 | ||||||||||||||||||||||
| Note: | |||||||||||||||||||||||||||||
| (b) | Adjusted operating profit increased 13% as compared to the same period in 2021. | ||||||||||||||||||||||||||||
-4-
METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share data)
(unaudited)
| Nine months ended | Nine months ended | ||||||||||||||||||||||||||||
| September 30, 2022 | % of sales | September 30, 2021 | % of sales | ||||||||||||||||||||||||||
| Net sales | $ | 2,862,024 | (a) | 100.0 | $ | 2,680,691 | 100.0 | ||||||||||||||||||||||
| Cost of sales | 1,186,122 | 41.4 | 1,116,271 | 41.6 | |||||||||||||||||||||||||
| Gross profit | 1,675,902 | 58.6 | 1,564,420 | 58.4 | |||||||||||||||||||||||||
| Research and development | 131,180 | 4.6 | 124,151 | 4.6 | |||||||||||||||||||||||||
| Selling, general and administrative | 710,875 | 24.8 | 701,531 | 26.2 | |||||||||||||||||||||||||
| Amortization | 49,697 | 1.7 | 46,141 | 1.7 | |||||||||||||||||||||||||
| Interest expense | 38,587 | 1.3 | 31,701 | 1.2 | |||||||||||||||||||||||||
| Restructuring charges | 7,803 | 0.3 | 2,719 | 0.1 | |||||||||||||||||||||||||
| Other charges (income), net | (7,818) | (0.2) | (5,208) | (0.2) | |||||||||||||||||||||||||
| Earnings before taxes | 745,578 | 26.1 | 663,385 | 24.8 | |||||||||||||||||||||||||
| Provision for taxes | 138,910 | 4.9 | 125,271 | 4.7 | |||||||||||||||||||||||||
| Net earnings | $ | 606,668 | 21.2 | $ | 538,114 | 20.1 | |||||||||||||||||||||||
| Basic earnings per common share: | |||||||||||||||||||||||||||||
| Net earnings | $ | 26.86 | $ | 23.19 | |||||||||||||||||||||||||
| Weighted average number of common shares | 22,587,026 | 23,203,257 | |||||||||||||||||||||||||||
| Diluted earnings per common share: | |||||||||||||||||||||||||||||
| Net earnings | $ | 26.58 | $ | 22.86 | |||||||||||||||||||||||||
| Weighted average number of common and common equivalent shares | 22,821,408 | 23,536,615 | |||||||||||||||||||||||||||
| Note: | |||||||||||||||||||||||||||||
| (a) | Local currency sales increased 11% as compared to the same period in 2021. | ||||||||||||||||||||||||||||
| RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT | |||||||||||||||||||||||||||||
| Nine months ended | Nine months ended | ||||||||||||||||||||||||||||
| September 30, 2022 | % of sales | September 30, 2021 | % of sales | ||||||||||||||||||||||||||
| Earnings before taxes | $ | 745,578 | $ | 663,385 | |||||||||||||||||||||||||
| Amortization | 49,697 | 46,141 | |||||||||||||||||||||||||||
| Interest expense | 38,587 | 31,701 | |||||||||||||||||||||||||||
| Restructuring charges | 7,803 | 2,719 | |||||||||||||||||||||||||||
| Other charges (income), net | (7,818) | (5,208) | |||||||||||||||||||||||||||
| Adjusted operating profit | $ | 833,847 | (b) | 29.1 | $ | 738,738 | 27.6 | ||||||||||||||||||||||
| Note: | |||||||||||||||||||||||||||||
| (b) | Adjusted operating profit increased 13% as compared to the same period in 2021. | ||||||||||||||||||||||||||||
-5-
METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
| September 30, 2022 | December 31, 2021 | |||||||||||||
| Cash and cash equivalents | $ | 122,136 | $ | 98,564 | ||||||||||
| Accounts receivable, net | 611,399 | 647,335 | ||||||||||||
| Inventories | 451,320 | 414,543 | ||||||||||||
| Other current assets and prepaid expenses | 131,047 | 108,916 | ||||||||||||
| Total current assets | 1,315,902 | 1,269,358 | ||||||||||||
| Property, plant and equipment, net | 728,602 | 799,365 | ||||||||||||
| Goodwill and other intangible assets, net | 933,524 | 956,072 | ||||||||||||
| Other non-current assets | 316,432 | 302,003 | ||||||||||||
| Total assets | $ | 3,294,460 | $ | 3,326,798 | ||||||||||
| Short-term borrowings and maturities of long-term debt | $ | 153,639 | $ | 101,134 | ||||||||||
| Trade accounts payable | 226,681 | 272,911 | ||||||||||||
| Accrued and other current liabilities | 784,617 | 772,493 | ||||||||||||
| Total current liabilities | 1,164,937 | 1,146,538 | ||||||||||||
| Long-term debt | 1,825,253 | 1,580,808 | ||||||||||||
| Other non-current liabilities | 387,079 | 428,031 | ||||||||||||
| Total liabilities | 3,377,269 | 3,155,377 | ||||||||||||
| Shareholders’ equity | (82,809) | 171,421 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 3,294,460 | $ | 3,326,798 | ||||||||||
-6-
METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
| Three months ended | Nine months ended | ||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Cash flow from operating activities: | |||||||||||||||||||||||
| Net earnings | $ | 220,597 | $ | 203,688 | $ | 606,668 | $ | 538,114 | |||||||||||||||
| Adjustments to reconcile net earnings to | |||||||||||||||||||||||
| net cash provided by operating activities: | |||||||||||||||||||||||
| Depreciation | 11,674 | 11,179 | 35,001 | 33,440 | |||||||||||||||||||
| Amortization | 16,728 | 16,039 | 49,697 | 46,141 | |||||||||||||||||||
| Deferred tax benefit | (1,644) | 1,351 | (4,881) | (6,072) | |||||||||||||||||||
| Other | 4,731 | 4,737 | 13,931 | 13,893 | |||||||||||||||||||
| Increase (decrease) in cash resulting from changes in | |||||||||||||||||||||||
| operating assets and liabilities | (6,655) | 26,313 | (144,992) | 42,203 | |||||||||||||||||||
| Net cash provided by operating activities | 245,431 | 263,307 | 555,424 | 667,719 | |||||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||||
| Proceeds from sale of property, plant and equipment | 118 | 151 | 236 | 3,399 | |||||||||||||||||||
| Purchase of property, plant and equipment | (26,822) | (22,433) | (89,213) | (69,796) | |||||||||||||||||||
Proceeds from government funding (a) | 3,657 | — | 28,670 | — | |||||||||||||||||||
| Acquisitions | (14,823) | (7,853) | (25,588) | (193,387) | |||||||||||||||||||
| Other investing activities | (10,835) | 4,955 | (3,463) | 8,559 | |||||||||||||||||||
| Net cash used in investing activities | (48,705) | (25,180) | (89,358) | (251,225) | |||||||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||||
| Proceeds from borrowings | 281,248 | 433,325 | 1,521,061 | 1,638,321 | |||||||||||||||||||
| Repayments of borrowings | (184,485) | (383,024) | (1,137,044) | (1,249,177) | |||||||||||||||||||
| Proceeds from exercise of stock options | 1,750 | 7,081 | 19,460 | 14,914 | |||||||||||||||||||
| Repurchases of common stock | (275,000) | (252,499) | (824,999) | (727,498) | |||||||||||||||||||
| Acquisition contingent consideration payment | — | — | (7,912) | — | |||||||||||||||||||
| Other financing activities | (790) | (576) | (1,172) | (2,864) | |||||||||||||||||||
| Net cash used in financing activities | (177,277) | (195,693) | (430,606) | (326,304) | |||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (6,761) | (1,014) | (11,888) | (772) | |||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 12,688 | 41,420 | 23,572 | 89,418 | |||||||||||||||||||
| Cash and cash equivalents: | |||||||||||||||||||||||
| Beginning of period | 109,448 | 142,252 | 98,564 | 94,254 | |||||||||||||||||||
| End of period | $ | 122,136 | $ | 183,672 | $ | 122,136 | $ | 183,672 | |||||||||||||||
| RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 245,431 | $ | 263,307 | $ | 555,424 | $ | 667,719 | |||||||||||||||
| Payments in respect of restructuring activities | 2,271 | 1,874 | 6,516 | 7,422 | |||||||||||||||||||
| Transition tax payment | — | — | 4,289 | 4,288 | |||||||||||||||||||
| Proceeds from sale of property, plant and equipment | 118 | 151 | 236 | 3,399 | |||||||||||||||||||
Purchase of property, plant and equipment, net (a) | (23,130) | (22,433) | (60,656) | (69,796) | |||||||||||||||||||
Acquisition payments (b) | 28 | 153 | 2,607 | 2,244 | |||||||||||||||||||
| Adjusted free cash flow | $ | 224,718 | $ | 243,052 | $ | 508,416 | $ | 615,276 | |||||||||||||||
| Notes: | |||||||||||||||||||||||
| (a) In September 2021 the Company entered into an agreement with the U.S. Department of Defense to increase the domestic production capacity of pipette tips and enhance manufacturing automation and logistics. The Company will receive funding of $35.8 million which will offset capital expenditures. For the three and nine months ended September 30, 2022, funding proceeds of $3.7 million and $28.7 million, respectively, and related purchases of property, plant and equipment of $3.7 million and $28.6 million, respectively, are excluded from Adjusted free cash flow for the respective periods. | |||||||||||||||||||||||
| (b) Includes $2.1 million of the PendoTECH contingent consideration payment that was reported in net cash provided by operating activities as required by U.S. GAAP for the nine months ended September 30, 2022. | |||||||||||||||||||||||
-7-
METTLER-TOLEDO INTERNATIONAL INC.
OTHER OPERATING STATISTICS
| SALES GROWTH BY DESTINATION | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||
| Europe | Americas | Asia/RoW | Total | |||||||||||||||||||||||||||||||||||
| U.S. Dollar Sales Growth | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2022 | (12)% | 11% | 7% | 4% | ||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | (5)% | 13% | 10% | 7% | ||||||||||||||||||||||||||||||||||
| Local Currency Sales Growth | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2022 | 1% | 11% | 15% | 10% | ||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | 5% | 13% | 15% | 11% | ||||||||||||||||||||||||||||||||||
| RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | % Growth | 2022 | 2021 | % Growth | |||||||||||||||||||||||||||||||||
| EPS as reported, diluted | $ | 9.76 | $ | 8.71 | 12% | $ | 26.58 | $ | 22.86 | 16% | ||||||||||||||||||||||||||||
| Purchased intangible amortization, net of tax | 0.22 | (a) | 0.18 | (a) | 0.66 | (a) | 0.49 | (a) | ||||||||||||||||||||||||||||||
| Restructuring charges, net of tax | 0.07 | (b) | 0.02 | (b) | 0.28 | (b) | 0.09 | (b) | ||||||||||||||||||||||||||||||
| Income tax expense | 0.13 | (c) | (0.19) | (c) | (0.12) | (c) | (0.17) | (c) | ||||||||||||||||||||||||||||||
| Acquisition costs, net of tax | — | — | 0.02 | (d) | 0.10 | (d) | ||||||||||||||||||||||||||||||||
| Adjusted EPS, diluted | $ | 10.18 | $ | 8.72 | 17% | $ | 27.42 | $ | 23.37 | 17% | ||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||
| (a) | Represents the EPS impact of purchased intangibles amortization of $6.4 million ($5.0 million net of tax) and $5.5 million ($4.1 million net of tax) for the three months ended September 30, 2022 and 2021, and of $19.4 million ($15.0 million net of tax) and $15.2 million ($11.5 million net of tax) for the nine months ended September 30, 2022 and 2021, respectively. | |||||||||||||||||||||||||||||||||||||
| (b) | Represents the EPS impact of restructuring charges of $2.0 million ($1.6 million after tax) and $0.7 million ($0.5 million after tax) for the three months ended September 30, 2022 and 2021, and $7.8 million ($6.3 million after tax) and $2.7 million ($2.2 million after tax) for the nine months ended September 30, 2022 and 2021, respectively, which primarily include employee related costs. | |||||||||||||||||||||||||||||||||||||
| (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 nine months ended September 30, 2022 and 2021 due to the timing of excess tax benefits associated with stock option exercises. | |||||||||||||||||||||||||||||||||||||
| (d) | Represents the EPS impact of acquisition costs of $0.7 million ($0.5 million after tax) and $2.8 million ($2.3 million after tax) for the nine months ended September 30, 2022 and 2021, respectively. | |||||||||||||||||||||||||||||||||||||
-8-