METTLER-TOLEDO INTERNATIONAL INC. REPORTS SECOND QUARTER 2022 RESULTS

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July 28, 2022 5:15 PM EDT

COLUMBUS, Ohio, July 28, 2022 /PRNewswire/ -- Mettler-Toledo International Inc. (NYSE: MTD) today announced second quarter results for 2022. Provided below are the highlights:

  • Reported sales increased 6% compared with the prior year. In local currency, sales increased 10% in the quarter as currency reduced sales growth by 4%.
  • Net earnings per diluted share as reported (EPS) were $9.29, compared with $7.85 in the prior-year period. Adjusted EPS was $9.39, an increase of 16% over the prior-year amount of $8.10. 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, "We reported strong second quarter results as our team executed very well on our growth strategies and successfully navigated global supply chain challenges. Sales growth in our Laboratory and Core Industrial businesses was robust. We are particularly pleased with our very good growth in China. Excellent sales growth combined with good margin improvement drove very strong growth in EPS despite adverse foreign currency."

GAAP Results

EPS in the quarter was $9.29, compared with the prior-year amount of $7.85.

Compared with the prior year, total reported sales increased 6% to $978.4 million. By region, reported sales increased 11% in the Americas, decreased 7% in Europe and increased 10% in Asia/Rest of World. Earnings before taxes amounted to $256.7 million, compared with $230.4 million in the prior year.

Non-GAAP Results

Adjusted EPS was $9.39, an increase of 16% over the prior-year amount of $8.10.

Compared with the prior year, total sales in local currency increased 10% as currency reduced sales growth by 4%. By region, local currency sales increased 12% in the Americas, 4% in Europe and 14% in Asia/Rest of World. Adjusted Operating Profit amounted to $285.4 million, a 12% increase from the prior-year amount of $255.3 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 $16.84, compared with the prior-year amount of $14.17.

Compared with the prior year, total reported sales increased 9% to $1,876.2 million. By region, reported sales increased 14% in the Americas, decreased 2% in Europe and increased 12% in Asia/Rest of World. Earnings before taxes amounted to $469.7 million, compared with $415.8 million in the prior year.

Non-GAAP Results

Adjusted EPS was $17.25, an increase of 18% over the prior-year amount of $14.66.

Compared with the prior year, total sales in local currency increased 12% as currency reduced sales growth by 3%. By region, local currency sales increased 14% in the Americas, 7% in Europe and 15% in Asia/Rest of World. Adjusted Operating Profit amounted to $526.7 million, a 13% increase from the prior-year amount of $465.9 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. Management cautions that market conditions are dynamic and changes to the business environment can happen quickly. There is uncertainty in the economic environment today including challenges in the global supply chain, inflationary pressures, unfavorable foreign currency, and the potential impacts of COVID-19 and the war in Ukraine. The estimates include uncertainty and management acknowledges that market conditions are subject to change.  

The Company said that based on its assessment of market conditions today, management anticipates local currency sales growth in 2022 will be between 9% and 10%. This sales growth is expected to result in Adjusted EPS in the range of $38.85 to $39.05, which represents a growth rate of 14% to 15%. This compares with previous local currency sales guidance of approximately 8% and Adjusted EPS guidance of $38.20 to $38.50.  Management notes that current foreign exchange rates represent a greater headwind to Adjusted EPS in the second half of 2022 compared with previous guidance.      

Based on today's assessment of market conditions, management anticipates local currency sales growth for the third quarter of 2022 will be approximately 8%, and Adjusted EPS is forecasted to be $9.75 to $9.85, a growth rate of 12% to 13%. Included in the third quarter guidance is an estimated 6% 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, "Our culture of agility and focused execution have allowed us to capitalize on favorable market demand and navigate challenging supply chain and inflationary conditions. We will continue to leverage our best-in-class Spinnaker sales and marketing initiatives and excellent product portfolio to identify and target profitable growth opportunities. Our sales growth combined with our margin initiatives will continue to drive margin expansion and robust earnings growth in 2022 and beyond."

Other Matters

The Company will host a conference call to discuss its quarterly results tomorrow morning (Friday, July 29) at 7:00 a.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 DisclaimerYou 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 recent 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 recent 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 recent 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.

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)

Three months ended

Three months ended

June 30, 2022

% of sales

June 30, 2021

% of sales

Net sales

$978,387

(a)

100.0

$924,351

100.0

Cost of sales

406,726

41.6

387,447

41.9

Gross profit

571,661

58.4

536,904

58.1

Research and development

44,023

4.5

42,603

4.6

Selling, general and administrative 

242,206

24.8

239,045

25.9

Amortization

16,365

1.6

16,218

1.8

Interest expense

12,765

1.3

10,439

1.1

Restructuring charges

1,770

0.2

876

0.1

Other charges (income), net

(2,160)

(0.2)

(2,661)

(0.3)

Earnings before taxes

256,692

26.2

230,384

24.9

Provision for taxes

44,622

4.5

45,621

4.9

Net earnings

$212,070

21.7

$184,763

20.0

Basic earnings per common share:

Net earnings 

$9.39

$7.97

Weighted average number of common shares

22,593,375

23,191,155

Diluted earnings per common share:

Net earnings 

$9.29

$7.85

Weighted average number of common 

22,821,666

23,521,793

  and common equivalent shares

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

June 30, 2022

% of sales

June 30, 2021

% of sales

Earnings before taxes

$256,692

$230,384

Amortization

16,365

16,218

Interest expense

12,765

10,439

Restructuring charges

1,770

876

Other charges (income), net

(2,160)

(2,661)

Adjusted operating profit

$285,432

(b)

29.2

$255,256

27.6

Note:

(b)  Adjusted operating profit increased 12% as compared to the same period in 2021.

 

METTLER-TOLEDO INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands except share data)

(unaudited)

Six months ended

Six months ended

June 30, 2022

% of sales

June 30, 2021

% of sales

Net sales

$1,876,178

(a)

100.0

$1,728,741

100.0

Cost of sales

784,932

41.8

720,141

41.7

Gross profit

1,091,246

58.2

1,008,600

58.3

Research and development

87,051

4.6

81,875

4.7

Selling, general and administrative 

477,518

25.5

460,797

26.7

Amortization

32,969

1.8

30,102

1.7

Interest expense

24,103

1.3

19,910

1.2

Restructuring charges

5,781

0.3

2,069

0.1

Other charges (income), net

(5,869)

(0.3)

(1,951)

(0.1)

Earnings before taxes

469,693

25.0

415,798

24.0

Provision for taxes

83,622

4.4

81,372

4.7

Net earnings

$386,071

20.6

$334,426

19.3

Basic earnings per common share:

Net earnings 

$17.02

$14.37

Weighted average number of common shares

22,680,353

23,277,636

Diluted earnings per common share:

Net earnings 

$16.84

$14.17

Weighted average number of common 

22,928,933

23,603,805

  and common equivalent shares

Note:

(a)  Local currency sales increased 12% as compared to the same period in 2021.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT

Six months ended

Six months ended

June 30, 2022

% of sales

June 30, 2021

% of sales

Earnings before taxes

$469,693

$415,798

Amortization

32,969

30,102

Interest expense

24,103

19,910

Restructuring charges

5,781

2,069

Other charges (income), net

(5,869)

(1,951)

Adjusted operating profit

$526,677

(b)

28.1

$465,928

27.0

Note:

(b)  Adjusted operating profit increased 13% as compared to the same period in 2021.

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)

June 30, 2022

December 31, 2021

Cash and cash equivalents

$109,449

$98,564

Accounts receivable, net

626,593

647,335

Inventories

463,321

414,543

Other current assets and prepaid expenses

125,338

108,916

Total current assets

1,324,701

1,269,358

Property, plant and equipment, net

760,856

799,365

Goodwill and other intangibles assets, net

941,811

956,072

Other non-current assets

309,062

302,003

Total assets

$3,336,430

$3,326,798

Short-term borrowings and maturities of long-term debt

$106,574

$101,134

Trade accounts payable

267,523

272,911

Accrued and other current liabilities

744,484

772,493

Total current liabilities

1,118,581

1,146,538

Long-term debt

1,821,458

1,580,808

Other non-current liabilities

389,129

428,031

Total liabilities

3,329,168

3,155,377

Shareholders' equity

7,262

171,421

Total liabilities and shareholders' equity

$3,336,430

$3,326,798

 

METTLER-TOLEDO INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)

Three months ended

Six months ended

June 30,

June 30,

2022

2021

2022

2021

Cash flow from operating activities:

    Net earnings

$212,070

$184,763

$386,071

$334,426

    Adjustments to reconcile net earnings to

      net cash provided by operating activities:

Depreciation

11,447

11,318

23,327

22,261

Amortization

16,365

16,218

32,969

30,102

Deferred tax benefit

(2,141)

(2,355)

(3,237)

(7,423)

Other

4,691

4,581

9,200

9,156

Increase (decrease) in cash resulting from changes in

  operating assets and liabilities

(23,276)

31,010

(138,337)

15,890

                Net cash provided by operating activities

219,156

245,535

$309,993

404,412

Cash flows from investing activities:

    Proceeds from sale of property, plant and equipment

118

3,248

118

3,248

    Purchase of property, plant and equipment

(43,240)

(22,758)

(62,391)

(47,363)

    Proceeds from government funding (a)

7,013

-

25,013

-

    Acquisitions

(1,061)

(460)

(10,765)

(185,534)

    Other investing activities

3,629

(14,622)

7,372

3,604

                Net cash used in investing activities

(33,541)

(34,592)

(40,653)

(226,045)

Cash flows from financing activities:

    Proceeds from borrowings

555,776

377,005

1,239,813

1,204,996

    Repayments of borrowings

(474,080)

(343,007)

(952,559)

(866,153)

    Proceeds from exercise of stock options

12,421

2,784

17,710

7,833

    Repurchases of common stock 

(274,999)

(212,499)

(549,999)

(474,999)

    Acquisition contingent consideration payment

(7,912)

-

(7,912)

-

    Other financing activities

(50)

(1,574)

(382)

(2,288)

                Net cash used in financing activities

(188,844)

(177,291)

(253,329)

(130,611)

Effect of exchange rate changes on cash and cash equivalents

(4,271)

1,946

(5,126)

242

Net increase (decrease) in cash and cash equivalents

(7,500)

35,598

$10,885

47,998

Cash and cash equivalents:

    Beginning of period

116,949

106,654

98,564

94,254

    End of period

$109,449

$142,252

$109,449

$142,252

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

Net cash provided by operating activities

$219,156

$245,535

$309,993

$404,412

    Payments in respect of restructuring activities

2,331

975

4,245

5,548

    Transition tax payment

4,289

4,288

4,289

4,288

    Proceeds from sale of property, plant and equipment

118

3,248

118

3,248

    Purchase of property, plant and equipment, net (a)

(20,054)

(22,758)

(37,526)

(47,363)

    Acquisition payments (b)

2,405

1,974

2,579

2,091

Adjusted free cash flow

$208,245

$233,262

$283,698

$372,224

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 six months ended June 30, 2022, funding proceeds of $7.0 million and $25.0 million, respectively, and related purchases of property, plant and equipment of $23.2 million and $24.9 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 three and six months ended June 30, 2022.

 

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, 2022

(7 %)

11 %

10 %

6 %

Six Months Ended June 30, 2022

(2 %)

14 %

12 %

9 %

Local Currency Sales Growth

Three Months Ended June 30, 2022

4 %

12 %

14 %

10 %

Six Months Ended June 30, 2022

7 %

14 %

15 %

12 %

RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS 

(unaudited)

Three months ended

Six months ended

June 30,

June 30,

2022

2021

% Growth

2022

2021

% Growth

EPS as reported, diluted

$9.29

$7.85

18 %

$16.84

$14.17

19 %

Purchased intangible amortization, net of tax

0.22

(a)

0.19

(a)

0.44

(a)

0.31

(a)

Restructuring charges, net of tax

0.06

(b)

0.03

(b)

0.20

(b)

0.07

(b)

Income tax expense

(0.18)

(c)

0.03

(c)

(0.25)

(c)

0.01

(c)

Acquisition costs, net of tax

-

-

0.02

(d)

0.10

(d)

Adjusted EPS, diluted

$9.39

$8.10

16 %

$17.25

$14.66

18 %

Notes:

(a)

Represents the EPS impact of purchased intangibles amortization of $6.4 million ($4.9 million net of tax) and $5.9 million ($4.5 million net of tax) for the three months ended June 30, 2022 and 2021, and of $13.0 million ($10.1 million net of tax) and $9.7 million ($7.3 million net of tax) for the six months ended June 30, 2022 and 2021, respectively.

(b)

Represents the EPS impact of restructuring charges of $1.8 million ($1.4 million after tax) and $0.9 million ($0.7 million after tax) for the three months ended June 30, 2022 and 2021, and $5.8 million ($4.7 million after tax) and $2.1 million ($1.7 million after tax) for the six months ended June 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 six months ended June 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 $0.5 million ($0.4 million after tax) and $2.8 million ($2.3 million after tax) for the six months ended June 30, 2022 and 2021, respectively.

 

Cision View original content:https://www.prnewswire.com/news-releases/mettler-toledo-international-inc-reports-second-quarter-2022-results-301595745.html

SOURCE Mettler-Toledo International Inc.


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