Mettler-Toledo International Inc. Reports Second Quarter 2020 Results
Mettler-Toledo announced a 6% decline in Q2 2020 sales, totaling $690.7 million, attributed to COVID-19. However, adjusted EPS rose by 3% to $5.29. The Americas faced an 8% drop, while Asia showed resilience with a slight increase in local currency sales. Despite challenges, cash flow remained strong. For Q3, the company anticipates a 1% to 3% decline in local currency sales and an adjusted EPS between $5.80 and $6.00. The outlook for the year suggests similar trends, reflecting uncertainty due to the pandemic.
- Adjusted EPS increased by 3% to $5.29 compared to the prior-year amount of $5.16.
- Strong cash flow generation reported during the quarter despite market challenges.
- Total reported sales decreased by 6% year-over-year to $690.7 million.
- Sales declined by 8% in the Americas and 6% in Europe.
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 decreased4% in the quarter as currency reduced sales by2% . - 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 of3% 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
Compared with the prior year, total reported sales decreased
Non-GAAP Results
Adjusted EPS was
Compared with the prior year, total sales in local currency decreased
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
Compared with the prior year, total reported sales decreased
Non-GAAP Results
Adjusted EPS was
Compared with the prior year, total sales in local currency decreased
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 -
For the full year 2020, the Company estimates that local currency sales will decline approximately -
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 | (a) | 100.0 | 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 | 18.3 | 17.4 | |||||||||||||||||
Basic earnings per common share: | |||||||||||||||||||
Net earnings | |||||||||||||||||||
Weighted average number of common shares | 23,940,278 | 24,698,032 | |||||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||
Net earnings | |||||||||||||||||||
Weighted average number of common | 24,228,989 | 25,118,352 | |||||||||||||||||
and common equivalent shares | |||||||||||||||||||
Note: | |||||||||||||||||||
(a) Local currency sales decreased | |||||||||||||||||||
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 | |||||||||||||||||||
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 | (b) | 25.6 | 24.3 | ||||||||||||||||
Note: | |||||||||||||||||||
(b) Adjusted operating profit decreased |
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 | (a) | 100.0 | 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 | 16.8 | 16.9 | |||||||||||||||||
Basic earnings per common share: | |||||||||||||||||||
Net earnings | |||||||||||||||||||
Weighted average number of common shares | 23,984,055 | 24,774,262 | |||||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||
Net earnings | |||||||||||||||||||
Weighted average number of common | 24,291,321 | 25,217,359 | |||||||||||||||||
and common equivalent shares | |||||||||||||||||||
Note: | |||||||||||||||||||
(a) Local currency sales decreased | |||||||||||||||||||
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 | |||||||||||||||||||
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 | (b) | 23.7 | 23.1 | ||||||||||||||||
Note: | |||||||||||||||||||
(b) Adjusted operating profit decreased | |||||||||||||||||||
METTLER-TOLEDO INTERNATIONAL INC. | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(amounts in thousands) | ||||||||||
(unaudited) | ||||||||||
June 30, 2020 | December 31, 2019 | |||||||||
Cash and cash equivalents | ||||||||||
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 | ||||||||||
Short-term borrowings and maturities of long-term debt | ||||||||||
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 | ||||||||||
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 | ||||||||
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 | ||||||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW | ||||||||
Net cash provided by operating activities | ||||||||
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 | ||||||||
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 | ( | ( | ( | ( | ||||||||
Six Months Ended June 30, 2020 | ( | ( | ( | ( | ||||||||
Local Currency Sales Growth (Decrease) | ||||||||||||
Three Months Ended June 30, 2020 | ( | ( | ( | |||||||||
Six Months Ended June 30, 2020 | ( | ( | ( | ( | ||||||||
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 | ( | |||||||||||
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 | ||||||||||||
Notes: | ||||||||||||
(a) | Represents the EPS impact of restructuring charges of | |||||||||||
(b) | Represents the EPS impact of purchased intangibles amortization, net of tax of | |||||||||||
(c) | Represents the EPS impact of the difference between our quarterly and estimated annual tax rate before non-recurring discrete items during |
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SOURCE Mettler-Toledo International Inc.