Mettler-Toledo International Inc. (NYSE: MTD) today announced
second quarter results for 2023. Provided below are the
highlights:
- Reported sales were flat compared with the prior-year. In local
currency, sales increased 2% in the quarter as currency reduced
sales growth by 2%.
- Net earnings per diluted share as reported (EPS) were $9.69,
compared with $9.29 in the prior-year period. Adjusted EPS was
$10.19, an increase of 9% over the prior-year amount of $9.39.
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
Patrick Kaltenbach, President and Chief Executive Officer,
stated, “Sales growth in the second quarter included strong growth
in our Service business, as well as solid performance across our
Industrial product categories, which was offset in part by softer
market conditions in Laboratory and China following very strong
growth over the last couple of years. Focused execution of our
margin expansion and disciplined cost control initiatives resulted
in good growth in Adjusted EPS despite a very significant adverse
foreign exchange impact.”
GAAP Results
EPS in the quarter was $9.69, compared with the prior-year
amount of $9.29.
Compared with the prior-year, total reported sales were flat at
$982.1 million. By region, reported sales increased 1% in both the
Americas and Europe, and decreased 1% in Asia/Rest of World.
Earnings before taxes amounted to $263.4 million, compared with
$256.7 million in the prior-year.
Non-GAAP Results
Adjusted EPS was $10.19, an increase of 9% over the prior-year
amount of $9.39.
Compared with the prior-year, total sales in local currency
increased 2% as currency reduced sales growth by 2%. By region,
local currency sales increased 4% in Asia/Rest of World, 1% in the
Americas, and were flat in Europe. Adjusted Operating Profit
amounted to $307.7 million, an 8% increase from the prior-year
amount of $285.4 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 $18.15, compared with the prior-year amount of
$16.84.
Compared with the prior-year, total reported sales increased 2%
to $1,910.9 million. By region, reported sales increased 3% in the
Americas, 2% in Europe, and 1% in Asia/Rest of World. Earnings
before taxes amounted to $490.0 million, compared with $469.7
million in the prior-year.
Non-GAAP Results
Adjusted EPS was $18.82, an increase of 9% over the prior-year
amount of $17.25.
Compared with the prior-year, total sales in local currency
increased 4% as currency reduced sales growth by 2%. By region,
local currency sales increased 3% in both the Americas and in
Europe, and 6% in Asia/Rest of World. Adjusted Operating Profit
amounted to $574.2 million, a 9% increase from the prior-year
amount of $526.7 million.
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 increased
uncertainty in the economic environment today, including the risk
of recession in many countries, and management acknowledges that
market conditions are subject to change.
Based on today's assessment of market conditions, management
anticipates local currency sales for the third quarter of 2023 will
decline approximately 3% to 4%, and Adjusted EPS is forecast to be
$9.55 to $9.85, a decline of 3% to 6%. Included in the third
quarter guidance is an estimated 3% headwind to Adjusted EPS growth
due to adverse currency.
For the full year, management anticipates local currency sales
growth in 2023 will be approximately 0% to 1%, and Adjusted EPS is
forecast to be in the range of $40.30 to $41.20, representing
growth of approximately 2% to 4%. This compares with previous local
currency sales growth guidance of approximately 5% and Adjusted EPS
guidance of $43.65 to $43.95. Included in the 2023 guidance is an
estimated 3% to 4% 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.
Conclusion
Kaltenbach concluded, “As we look to the remainder of 2023,
there is increased uncertainty in the global economy and our end
markets, and we continue to face challenging sales growth
comparisons. Market demand in China has deteriorated sharply, and
we expect reduced sales during the remainder of 2023. We remain
confident in the factors we can control, including executing on our
best-in-class sales and marketing programs and our margin expansion
and proactive cost savings initiatives. Our team remains very agile
in adapting to changing market conditions, and I am confident that
our efforts will deliver good financial results this year in a more
challenging business environment.”
Other Matters
The Company will host a conference call to discuss its quarterly
results today (Thursday, July 27) at 4:30 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.
Forward-Looking Statements Disclaimer
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, inflation and ongoing developments related
to Ukraine. 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, planned research and development
efforts and product introductions, adequacy of facilities, access
to and the costs of raw materials, shipping and supplier costs,
gross margins, customer demand, our competitive position, pricing,
capital expenditures, cash flow, tax-related matters, the impact of
foreign currencies, compliance with laws, effects of acquisitions,
and the impact of inflation and ongoing developments related to
Ukraine on our business.
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
inflation, and the ongoing developments related to 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, 2022 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, 2023 % of sales June 30, 2022 % of sales Net sales
$
982,117
(a)
100.0
$
978,387
100.0
Cost of sales
398,574
40.6
406,726
41.6
Gross profit
583,543
59.4
571,661
58.4
Research and development
47,245
4.8
44,023
4.5
Selling, general and administrative
228,594
23.3
242,206
24.8
Amortization
18,042
1.8
16,365
1.6
Interest expense
19,249
2.0
12,765
1.3
Restructuring charges
8,021
0.8
1,770
0.2
Other charges (income), net
(1,011
)
(0.1
)
(2,160
)
(0.2
)
Earnings before taxes
263,403
26.8
256,692
26.2
Provision for taxes
49,476
5.0
44,622
4.5
Net earnings
$
213,927
21.8
$
212,070
21.7
Basic earnings per common share: Net earnings
$
9.75
$
9.39
Weighted average number of common shares
21,944,645
22,593,375
Diluted earnings per common share: Net earnings
$
9.69
$
9.29
Weighted average number of common
22,080,602
22,821,666
and common equivalent shares Note:
(a) Local currency sales
increased 2% as compared to the same period in 2022.
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED
OPERATING PROFIT
Three months ended
Three months ended
June 30, 2023 % of sales June 30, 2022 % of sales Earnings
before taxes
$
263,403
$
256,692
Amortization
18,042
16,365
Interest expense
19,249
12,765
Restructuring charges
8,021
1,770
Other charges (income), net
(1,011
)
(2,160
)
Adjusted operating profit
$
307,704
(b)
31.3
$
285,432
29.2
Note:
(b) Adjusted operating profit
increased 8% as compared to the same period in 2022.
METTLER-TOLEDO INTERNATIONAL INC. CONSOLIDATED STATEMENTS
OF OPERATIONS (amounts in thousands except share data)
(unaudited)
Six months ended
Six months ended
June 30, 2023
% of sales
June 30, 2022
% of sales
Net sales
$
1,910,855
(a)
100.0
$
1,876,178
100.0
Cost of sales
780,746
40.9
784,932
41.8
Gross profit
1,130,109
59.1
1,091,246
58.2
Research and development
92,722
4.9
87,051
4.6
Selling, general and administrative
463,232
24.2
477,518
25.5
Amortization
35,821
1.9
32,969
1.8
Interest expense
37,433
2.0
24,103
1.3
Restructuring charges
12,295
0.6
5,781
0.3
Other charges (income), net
(1,407
)
(0.1
)
(5,869
)
(0.3
)
Earnings before taxes
490,013
25.6
469,693
25.0
Provision for taxes
87,660
4.5
83,622
4.4
Net earnings
$
402,353
21.1
$
386,071
20.6
Basic earnings per common share: Net earnings
$
18.28
$
17.02
Weighted average number of common shares
22,013,662
22,680,353
Diluted earnings per common share: Net earnings
$
18.15
$
16.84
Weighted average number of common
22,164,394
22,928,933
and common equivalent shares Note:
(a) Local currency sales
increased 4% as compared to the same period in 2022.
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED
OPERATING PROFIT
Six months ended
Six months ended
June 30, 2023
% of sales
June 30, 2022
% of sales
Earnings before taxes
$
490,013
$
469,693
Amortization
35,821
32,969
Interest expense
37,433
24,103
Restructuring charges
12,295
5,781
Other charges (income), net
(1,407
)
(5,869
)
Adjusted operating profit
$
574,155
(b)
30.0
$
526,677
(b)
28.1
Note:
(b) Adjusted operating profit
increased 9% as compared to the same period in 2022.
METTLER-TOLEDO INTERNATIONAL
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(amounts in thousands)
(unaudited)
June 30, 2023 December 31, 2022 Cash and cash
equivalents
$
83,574
$
95,966
Accounts receivable, net
648,002
709,321
Inventories
394,959
441,694
Other current assets and prepaid expenses
119,971
128,108
Total current assets
1,246,506
1,375,089
Property, plant and equipment, net
780,723
778,600
Goodwill and other intangibles assets, net
959,694
966,224
Other non-current assets
383,472
372,482
Total assets
$
3,370,395
$
3,492,395
Short-term borrowings and maturities of long-term debt
$
107,365
$
106,054
Trade accounts payable
170,230
252,538
Accrued and other current liabilities
730,408
789,139
Total current liabilities
1,008,003
1,147,731
Long-term debt
2,045,462
1,908,480
Other non-current liabilities
406,635
411,391
Total liabilities
3,460,100
3,467,602
Shareholders’ equity
(89,705
)
24,793
Total liabilities and shareholders’ equity
$
3,370,395
$
3,492,395
METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (amounts in thousands)
(unaudited) Three months ended Six months ended June
30, June 30,
2023
2022
2023
2022
Cash flow from operating activities: Net earnings
$
213,927
$
212,070
$
402,353
$
386,071
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation
12,194
11,447
24,217
23,327
Amortization
18,042
16,365
35,821
32,969
Deferred tax benefit
(2,368
)
(2,141
)
(1,766
)
(3,237
)
Other
4,195
4,691
8,222
9,200
Increase (decrease) in cash resulting from changes in operating
assets and liabilities
20,821
(23,276
)
(48,774
)
(138,337
)
Net cash provided by operating activities
266,811
219,156
420,073
309,993
Cash flows from investing activities: Proceeds from sale of
property, plant and equipment
412
118
412
118
Purchase of property, plant and equipment
(28,751
)
(43,240
)
(51,947
)
(62,391
)
Proceeds from government funding (a)
1,264
7,013
1,264
25,013
Acquisitions
-
(1,061
)
(613
)
(10,765
)
Other investing activities
(15,837
)
3,629
(14,414
)
7,372
Net cash used in investing activities
(42,912
)
(33,541
)
(65,298
)
(40,653
)
Cash flows from financing activities: Proceeds from borrowings
475,903
555,776
1,080,921
1,239,813
Repayments of borrowings
(455,215
)
(474,080
)
(958,731
)
(952,559
)
Proceeds from exercise of stock options
7,614
12,421
19,087
17,710
Repurchases of common stock
(250,000
)
(274,999
)
(499,999
)
(549,999
)
Acquisition contingent consideration payment
(5,626
)
(7,912
)
(5,626
)
(7,912
)
Other financing activities
(103
)
(50
)
(714
)
(382
)
Net cash used in financing activities
(227,427
)
(188,844
)
(365,062
)
(253,329
)
Effect of exchange rate changes on cash and cash equivalents
(1,983
)
(4,271
)
(2,105
)
(5,126
)
Net increase (decrease) in cash and cash equivalents
(5,511
)
(7,500
)
(12,392
)
10,885
Cash and cash equivalents: Beginning of period
89,085
116,949
95,966
98,564
End of period
$
83,574
$
109,449
$
83,574
$
109,449
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES
TO ADJUSTED FREE CASH FLOW Net cash provided by operating
activities
$
266,811
$
219,156
$
420,073
$
309,993
Payments in respect of restructuring activities
5,415
2,331
7,398
4,245
Transition tax payment
8,042
4,289
8,042
4,289
Proceeds from sale of property, plant and equipment
412
118
412
118
Purchase of property, plant and equipment, net (a)
(24,907
)
(20,054
)
(44,815
)
(37,526
)
Acquisition payments (b)
4,775
2,405
4,775
2,579
Adjusted free cash flow
$
260,548
$
208,245
$
395,885
$
283,698
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 future capital expenditures. Funding proceeds of $1.3
million and $7.0 million during the three months ended June 30,
2023 and 2022, respectively and the related purchase of property,
plant and equipment of $3.8 million and $23.2 million for the three
months ended June 30, 2023 and 2022, respectively, are excluded
from Adjusted free cash flow. Funding proceeds of $1.3 million and
$25.0 million during the six months ended June 30, 2023 and 2022,
respectively and the related purchase of property, plant and
equipment of $7.1 million and $24.9 million for the six months
ended June 30, 2023 and 2022, respectively, are excluded from
Adjusted free cash flow.
(b)
Includes $4.4 million and $2.4 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 three and six
months ended June 30, 2023 and 2022, respectively.
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 June 30,
2023
1
%
1
%
(1
%)
0
%
Six Months Ended June 30, 2023
2
%
3
%
1
%
2
%
Local Currency Sales Growth Three Months Ended June 30, 2023
0
%
1
%
4
%
2
%
Six Months Ended June 30, 2023
3
%
3
%
6
%
4
%
RECONCILIATION OF DILUTED EPS AS REPORTED TO
ADJUSTED DILUTED EPS (unaudited) Three months
ended Six months ended June 30, June 30,
2023
2022
% Growth
2023
2022
% Growth EPS as reported, diluted
$
9.69
$
9.29
4
%
$
18.15
$
16.84
8
%
Purchased intangible amortization, net of tax
0.23
(a)
0.22
(a)
0.46
(a)
0.44
(a) Restructuring charges, net of tax
0.29
(b)
0.06
(b)
0.45
(b)
0.20
(b) Income tax expense
(0.02
)
(c)
(0.18
)
(c)
(0.24
)
(c)
(0.25
)
(c) Acquisition costs, net of tax
-
-
-
(d)
0.02
(d) Adjusted EPS, diluted
$
10.19
$
9.39
9
%
$
18.82
$
17.25
9
%
Notes:
(a)
Represents the EPS impact of purchased intangibles amortization of
$6.7 million ($5.2 million net of tax) and $6.4 million ($4.9
million net of tax) for the three months ended June 30, 2023 and
2022, and of $13.3 million ($10.3 million net of tax) and $13.0
million ($10.1 million net of tax) for the six months ended June
30, 2023 and 2022, respectively.
(b)
Represents the EPS impact of restructuring charges of $8.0 million
($6.5 million after tax) and $1.8 million ($1.4 million after tax)
for the three months ended June 30, 2023 and 2022, and $12.3
million ($10.0 million after tax) and $5.8 million ($4.7 million
after tax) for the six months ended June 30, 2023 and 2022,
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 six months ended June 30, 2023 and 2022 due to
the timing of excess tax benefits associated with stock option
exercises. Also includes a $0.05 EPS charge for the three months
ended June 30, 2023 for the increase of our annualized effective
tax rate to 19.0% for the first quarter of 2023.
(d)
Represents the EPS impact of acquisition costs of $0.5 million
($0.4 million after tax) for the six months ended June 30, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230727429663/en/
Adam Uhlman Head of Investor Relations METTLER TOLEDO Direct:
614-438-4794 adam.uhlman@mt.com
Grafico Azioni Mettler Toledo (NYSE:MTD)
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