Mettler-Toledo International Inc. (NYSE: MTD) today announced third quarter results for 2023. Provided below are the highlights:

  • Reported sales declined 4% compared with the prior year. In local currency, sales decreased 5% in the quarter as currency increased sales growth by 1%.
  • Net earnings per diluted share as reported (EPS) were $9.21, compared with $9.76 in the prior-year period. Adjusted EPS was $9.80, a decrease of 4% over the prior-year amount of $10.18. 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, “We delivered good earnings and cash flow performance in the third quarter, despite more challenging market conditions in China following very strong growth over the past couple of years and foreign currency headwinds.”

GAAP Results

EPS in the quarter was $9.21, compared with the prior-year amount of $9.76.

Compared with the prior year, total reported sales declined 4% to $942.5 million. By region, reported sales increased 12% in Europe, decreased 3% in the Americas, and decreased 17% in Asia/Rest of World. Earnings before taxes amounted to $251.2 million, compared with $275.9 million in the prior year.

Non-GAAP Results

Adjusted EPS was $9.80, a decrease of 4% over the prior-year amount of $10.18.

Compared with the prior year, total sales in local currency decreased 5% as currency increased sales growth by 1%. By region, local currency sales increased 4% in Europe, declined 3% in the Americas, and declined 14% in Asia/Rest of World. Adjusted Operating Profit amounted to $296.0 million, a 4% decrease from the prior-year amount of $307.2 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 $27.37, compared with the prior-year amount of $26.58.

Compared with the prior year, total reported sales were flat at $2,853.3 million. By region, reported sales increased 5% in Europe and 1% in the Americas, and declined 6% in Asia/Rest of World. Earnings before taxes amounted to $741.2 million, compared with $745.6 million in the prior year.

Non-GAAP Results

Adjusted EPS was $28.63, an increase of 4% over the prior-year amount of $27.42.

Compared with the prior year, total sales in local currency increased 1% as currency reduced sales growth by 1%. By region, local currency sales increased 4% in Europe and 1% in the Americas, and declined 1% in Asia/Rest of World. Adjusted Operating Profit amounted to $870.1 million, a 4% increase from the prior-year amount of $833.8 million.

Outlook

The Company stated that forecasting remains difficult. 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.

Based on today's assessment of market conditions, management anticipates local currency sales for the fourth quarter of 2023 will decline approximately 7% to 8%, and Adjusted EPS is forecast to be $10.50 to $10.70, a decline of 12% to 13%. Included in the fourth quarter guidance is an estimated 1% headwind to Adjusted EPS growth due to adverse currency.

For the full year, management anticipates local currency sales in 2023 will decline approximately 1%, and Adjusted EPS is forecast to be in the range of $39.10 to $39.30, representing a decline of approximately 1%. This compares with previous local currency sales growth guidance of approximately 0% to 1% and Adjusted EPS guidance of $40.30 to $41.20. Included in the 2023 guidance is an estimated 3% to 4% headwind to Adjusted EPS growth due to adverse currency.

The Company stated that based on its assessment of market conditions today, management anticipates local currency sales in 2024 will be approximately flat. This is expected to result in Adjusted EPS in the range of $39.10 to $39.80, representing growth of approximately 0% to 2%. Included in the 2024 guidance is an estimated 2% 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, “Market conditions are expected to remain challenging in the near term, especially in China, and we continue to face difficult sales growth comparisons. We will continue to focus on the strong execution of our proven corporate programs such as Spinnaker to drive growth and capture market share and SternDrive to manage our costs effectively. Our team has shown remarkable resilience and agility as we have adjusted quickly to changing market conditions, while continuing to invest in long-term strategic priorities like innovation.”

Other Matters

The Company will host a conference call to discuss its quarterly results tomorrow morning (Friday, November 10) at 8:30 a.m. Eastern Time. To listen to 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 on 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

 

September 30, 2023

  % of sales  

September 30, 2022

  % of sales       Net sales

$

942,462

  (a)

100.0

 

 

$

985,846

 

100.0

 

Cost of sales

 

382,923

 

40.6

 

 

 

401,190

 

40.7

 

Gross profit

 

559,539

 

59.4

 

 

 

584,656

 

59.3

 

      Research and development

 

46,127

 

4.9

 

 

 

44,129

 

4.5

 

Selling, general and administrative

 

217,447

 

23.1

 

 

 

233,357

 

23.7

 

Amortization

 

18,314

 

1.9

 

 

 

16,728

 

1.7

 

Interest expense

 

20,278

 

2.2

 

 

 

14,484

 

1.5

 

Restructuring charges

 

7,385

 

0.8

 

 

 

2,022

 

0.2

 

Other charges (income), net

 

(1,171 )

 

(0.1

)

 

 

(1,949 )

 

(0.3

)

Earnings before taxes

 

251,159

 

26.6

 

 

 

275,885

 

28.0

 

      Provision for taxes

 

49,528

 

5.2

 

 

 

55,288

 

5.6

 

Net earnings

$

201,631

 

21.4

 

 

$

220,597

 

22.4

 

      Basic earnings per common share:       Net earnings

$

9.26

   

$

9.85

  Weighted average number of common shares

 

21,776,944

   

 

22,403,393

        Diluted earnings per common share:       Net earnings

$

9.21

   

$

9.76

  Weighted average number of common

 

21,886,482

   

 

22,610,027

  and common equivalent shares             Note:      

(a) Local currency sales decreased 5% as compared to the same period in 2022.

      RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT      

Three months ended

   

Three months ended

  September 30, 2023   % of sales   September 30, 2022   % of sales       Earnings before taxes

$

251,159

   

$

275,885

  Amortization

 

18,314

   

 

16,728

  Interest expense

 

20,278

   

 

14,484

  Restructuring charges

 

7,385

   

 

2,022

  Other charges (income), net

 

(1,171 )

   

 

(1,949 )

  Adjusted operating profit

$

295,965

  (b)

31.4

 

 

$

307,170

 

31.2

 

      Note:      

(b) Adjusted operating profit decreased 4% as compared to the same period in 2022.

METTLER-TOLEDO INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands except share data) (unaudited)      

Nine months ended

   

Nine months ended

 

September 30, 2023

  % of sales  

September 30, 2022

  % of sales       Net sales

$2,853,317

 

(a)

100.0

 

$2,862,024

 

100.0

Cost of sales

1,163,669

 

40.8

 

1,186,122

 

41.4

Gross profit

1,689,648

 

59.2

 

1,675,902

 

58.6

      Research and development

138,849

 

4.9

 

131,180

 

4.6

Selling, general and administrative

680,679

 

23.9

 

710,875

 

24.8

Amortization

54,135

 

1.9

 

49,697

 

1.7

Interest expense

57,711

 

2.0

 

38,587

 

1.3

Restructuring charges

19,680

 

0.7

 

7,803

 

0.3

Other charges (income), net

(2,578)

 

(0.2)

 

(7,818)

 

(0.2)

Earnings before taxes

741,172

 

26.0

 

745,578

 

26.1

      Provision for taxes

137,188

 

4.8

 

138,910

 

4.9

Net earnings

$603,984

 

21.2

 

$606,668

 

21.2

      Basic earnings per common share:       Net earnings

$27.54

   

$26.86

  Weighted average number of common shares

21,933,889

   

22,587,026

        Diluted earnings per common share:       Net earnings

$27.37

   

$26.58

  Weighted average number of common

22,067,398

   

22,821,408

  and common equivalent shares             Note:      

(a) Local currency sales increased 1% as compared to the same period in 2022.

      RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT      

Nine months ended

   

Nine months ended

 

September 30, 2023

 

% of

sales

 

September 30, 2022

 

%

of sales

      Earnings before taxes

$741,172

   

$745,578

  Amortization

54,135

   

49,697

  Interest expense

57,711

   

38,587

  Restructuring charges

19,680

   

7,803

  Other charges (income), net

(2,578)

   

(7,818)

  Adjusted operating profit

$870,120 (b)

 

30.5

 

$833,847

 

29.1

      Note:      

(b) Adjusted operating profit increased 4% as compared to the same period in 2022.

METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands) (unaudited)    

September 30, 2023

 

December 31, 2022

  Cash and cash equivalents

$69,675

 

$95,966

Accounts receivable, net

634,967

 

709,321

Inventories

375,959

 

441,694

Other current assets and prepaid expenses

116,311

 

128,108

Total current assets

1,196,912

 

1,375,089

  Property, plant and equipment, net

763,209

 

778,600

Goodwill and other intangibles assets, net

947,835

 

966,224

Other non-current assets

380,774

 

372,482

Total assets

$3,288,730

 

$3,492,395

  Short-term borrowings and maturities of long-term debt

$179,083

 

$106,054

Trade accounts payable

173,970

 

252,538

Accrued and other current liabilities

717,370

 

789,139

Total current liabilities

1,070,423

 

1,147,731

  Long-term debt

1,929,401

 

1,908,480

Other non-current liabilities

394,778

 

411,391

Total liabilities

3,394,602

 

3,467,602

  Shareholders’ equity

(105,872)

 

24,793

Total liabilities and shareholders’ equity

$3,288,730

 

$3,492,395

METTLER-TOLEDO INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) (unaudited)         Three months ended   Nine months ended September 30,   September 30,

2023

 

2022

 

2023

 

2022

        Cash flow from operating activities:       Net earnings

$201,631

 

$220,597

 

$603,984

 

$606,668

Adjustments to reconcile net earnings to       net cash provided by operating activities:       Depreciation

12,189

 

11,674

 

36,406

 

35,001

Amortization

18,314

 

16,728

 

54,135

 

49,697

Deferred tax benefit

(2,689)

 

(1,644)

 

(4,455)

 

(4,881)

Other

4,228

 

4,731

 

12,450

 

13,931

Increase (decrease) in cash resulting from changes in       operating assets and liabilities

30,623

 

(6,655)

 

(18,151)

 

(144,992)

Net cash provided by operating activities

264,296

 

245,431

 

684,369

 

555,424

        Cash flows from investing activities:       Proceeds from sale of property, plant and equipment

256

 

118

 

668

 

236

Purchase of property, plant and equipment

(20,960)

 

(26,822)

 

(72,907)

 

(89,213)

Proceeds from government funding (a)

1,332

 

3,657

 

2,596

 

28,670

Acquisitions

-

 

(14,823)

 

(613)

 

(25,588)

Other investing activities

(11,523)

 

(10,835)

 

(25,937)

 

(3,463)

Net cash used in investing activities

(30,895)

 

(48,705)

 

(96,193)

 

(89,358)

Cash flows from financing activities:       Proceeds from borrowings

489,052

 

281,248

 

1,569,973

 

1,521,061

Repayments of borrowings

(508,497)

 

(184,485)

 

(1,467,228)

 

(1,137,044)

Proceeds from exercise of stock options

147

 

1,750

 

19,234

 

19,460

Repurchases of common stock

(223,999)

 

(275,000)

 

(723,998)

 

(824,999)

Acquisition contingent consideration payment

(2,141)

 

-

 

(7,767)

 

(7,912)

Other financing activities

(112)

 

(790)

 

(826)

 

(1,172)

Net cash used in financing activities

(245,550)

 

(177,277)

 

(610,612)

 

(430,606)

        Effect of exchange rate changes on cash and cash equivalents

(1,750)

 

(6,761)

 

(3,855)

 

(11,888)

        Net increase (decrease) in cash and cash equivalents

(13,899)

 

12,688

 

(26,291)

 

23,572

        Cash and cash equivalents:       Beginning of period

83,574

 

109,448

 

95,966

 

98,564

End of period

$69,675

 

$122,136

 

$69,675

 

$122,136

        RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW         Net cash provided by operating activities

$264,296

 

$245,431

 

$684,369

 

$555,424

Payments in respect of restructuring activities

7,544

 

2,271

 

14,942

 

6,516

Transition tax payment

-

 

-

 

8,042

 

4,289

Proceeds from sale of property, plant and equipment

255

 

118

 

667

 

236

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

(20,362)

 

(23,130)

 

(65,177)

 

(60,656)

Acquisition payments (b)

-

 

28

 

4,775

 

2,607

Adjusted free cash flow

$251,733

 

$224,718

 

$647,618

 

$508,416

        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 $3.7 million during the three months ended September 30, 2023 and 2022, respectively and the related purchase of property, plant and equipment of $0.6 million and $3.7 million for the three months ended September 30, 2023 and 2022, respectively, are excluded from Adjusted free cash flow. Funding proceeds of  $2.6 million and $28.7 million during the nine months ended September 30, 2023 and 2022, respectively and the related purchase of property, plant and equipment of $7.7 million and $28.6 million for the nine months ended September 30, 2023 and 2022, respectively, are excluded from Adjusted free cash flow.

  (b) Includes $4.4 million and $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, 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 September 30, 2023

 

12%

(3%)

(17%)

(4%)

Nine Months Ended September 30, 2023

 

5%

1%

(6%)

- %

 

 

 

 

 

  Local Currency Sales Growth

 

 

 

 

 

Three Months Ended September 30, 2023

 

4%

(3%)

(14%)

(5%)

Nine Months Ended September 30, 2023

 

4%

1%

(1%)

1%

 

 

 

 

 

 

 

 

 

 

 

  RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS (unaudited)

 

 

 

 

 

  Three months ended Nine months ended September 30, September 30,

2023

2022

% Growth

2023

2022

% Growth

 

 

 

 

 

  EPS as reported, diluted

$9.21

$9.76

(6%)

$27.37

$26.58

3%

 

 

 

 

 

  Purchased intangible amortization, net of tax

0.24

(a)

0.22

(a)

 

0.70

(a)

0.66

(a) Restructuring charges, net of tax

0.27

(b)

0.07

(b)

 

0.72

(b)

0.28

(b) Income tax expense

0.08

(c)

0.13

(c)

 

(0.16)

(c)

(0.12)

(c) Acquisition costs, net of tax

-

-

 

-

(d)

0.02

(d)

 

 

 

 

 

  Adjusted EPS, diluted

$9.80

$10.18

(4%)

$28.63

$27.42

4%

 

 

 

 

 

  Notes:

 

 

 

 

 

(a)

Represents the EPS impact of purchased intangibles amortization of $6.7 million ($5.2 million net of tax) and $6.4 million ($5.0 million net of tax) for the three months ended September 30, 2023 and 2022, and of $20.0 million ($15.4 million net of tax) and $19.4 million ($15.0 million net of tax) for the nine months ended September 30, 2023 and 2022, respectively.

(b)

Represents the EPS impact of restructuring charges of $7.4 million ($6.0 million after tax) and $2.0 million ($1.6 million after tax) for the three months ended September 30, 2023 and 2022, and $19.7 million ($15.9 million after tax) and $7.8 million ($6.3 million after tax) for the nine months ended September 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 nine months ended September 30, 2023 and 2022 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) for the nine months ended September 30, 2022.

 

Adam Uhlman Head of Investor Relations METTLER TOLEDO Direct: 614-438-4794 adam.uhlman@mt.com

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