Exhibit 99-1
METTLER-TOLEDO INTERNATIONAL INC. REPORTS
FOURTH QUARTER 2006 RESULTS
- - Excellent Fourth Quarter Operating Performance - -
- - Raised Outlook for 2007 - -
COLUMBUS, Ohio, USA - February 8, 2007 - Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results. The highlights of the quarter were:
· | Sales growth in local currency was 8%. Reported sales growth was 12%, which included a 4% currency benefit. |
· | Reported net earnings per diluted share (EPS) were $1.31, an increase of 26% over the fourth quarter 2005 amount of $1.04. Excluding share-based compensation, EPS would have increased 30% to $1.35. |
· | Projected 2007 EPS was increased to $4.10 to $4.20. |
Fourth Quarter Results
Robert F. Spoerry, Chairman, President and Chief Executive Officer, stated, “We are very pleased with our great finish to 2006 - particularly given the strong results in the fourth quarter of 2005. The sales increase was broad-based, with all key businesses and geographies performing well. Operating profit growth and cash flow generation were strong, and our EPS growth was excellent.”
Reported EPS was $1.31 and included $0.04 per diluted share in share-based compensation. In the fourth quarter of 2005, reported EPS was $1.04. EPS on a reported basis increased 26% versus 2005. Excluding share-based compensation expense, EPS would have increased 30% to $1.35. To facilitate comparisons, a reconciliation of EPS is provided in the attached schedules.
Sales were $462.3 million, compared with $411.2 million in the prior year, an increase of 8% in local currency sales. Reported sales growth was 12%, which included a 4% favorable currency benefit. By region, local currency sales growth was 7% in Europe, 6% in the Americas and 14% in Asia / Rest of World. Adjusted operating income amounted to $79.5 million, a 16% increase over the prior year amount of $68.8 million.
Cash flow from operations was $51.9 million, compared with $59.5 million in 2005. The Company repurchased 1.1 million shares of its stock for $83.4 million during the quarter.
Full Year Results
For 2006, reported EPS was $3.86, which included $0.14 of share-based compensation and a third quarter benefit for discrete tax items of $0.20 per share. EPS in 2005 was $2.52 and included the previously disclosed $0.12 per share tax charge and a $0.30 per share charge for previously-disclosed litigation. On a reported basis, 2006 EPS increased 53% over 2005. Excluding the effects of the one-time items in both periods and share-based compensation, EPS would have increased 29% to $3.80. To facilitate comparisons, a reconciliation of EPS is provided in the attached schedules.
Sales were $1.6 billion, compared with $1.5 billion in 2005. This represents an 8% increase in reported sales, consisting of 7% local currency sales growth and 1% favorable impact due to currency. Adjusted operating income was $234.2 million, a 13% increase over the 2005 amount of $206.7 million.
Cash flow from operations was $191.6 million, compared with $177.1 million in 2005. The Company repurchased 4.1 million shares of its stock for $265.8 million in 2006.
2007 Revised Outlook
The Company stated that based on an economic environment and market conditions similar to today’s, it now expects 2007 EPS to be in the range of $4.10 to $4.20, assuming local currency sales growth in the 4% to 6% range. This compares with previous 2007 EPS guidance of $4.00 to $4.10. The Company noted the 2007 estimates include share-based compensation and reflect an effective tax rate of approximately 27%. On a comparable basis -- that is, excluding the one-time tax items in 2006 -- this represents a growth of approximately 12% to 15%.
Conclusion
Spoerry continued, “Disciplined execution of our strategic initiatives drove strong operating performance in 2006. Our sales and marketing programs combined with product innovation will allow us to continue to gain market share. Our product introductions are reinforcing our technology leadership and provide tangible paybacks to customers. We are achieving strong sales momentum in fast-growing emerging markets as we capitalize on our extensive product range and distribution. And finally, a determined focus on costs and efficient use of our invested capital are driving improved returns.”
Spoerry concluded, “The strengths of our franchise are market leadership; global presence; a diversified customer base and product portfolio; technology leadership; and a culture of delivering the highest quality products and services. These elements continue to provide a solid foundation for our future. We remain cautious on the economy but believe, with continued diligent execution of our strategic initiatives, we are well positioned for growth in 2007 and beyond.”
Other Matters
The Company has provided a reconciliation of earnings before taxes, the most comparable U.S. GAAP measure, to adjusted operating income in the attached schedules.
The Company will host a conference call to discuss its fourth quarter results today (Thursday, February 8) 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.
METTLER TOLEDO is a leading global supplier of precision instruments and services. The Company is the world’s largest manufacturer and marketer of weighing instruments for use in laboratory, industrial and food retailing applications. The Company also holds top-three market positions in several related analytical instruments and is a leading provider of automated chemistry systems used in drug and chemical compound discovery and development. In addition, the Company is the world’s largest manufacturer and marketer of metal detection and other end-of-line inspection systems used in production and packaging and holds a leading position in certain process analytics applications. Additional information about METTLER TOLEDO can be found on the World Wide Web at “www.mt.com.”
Statements in this discussion which are not historical facts may be considered "forward-looking statements" that involve risks and uncertainties. For a discussion of these risks and uncertainties, which could cause actual events or results to differ from those contained in the forward-looking statements, see “Factors affecting our future operating results” in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the fiscal year December 31, 2005. The Company assumes no obligation to update this press release.
METTLER-TOLEDO INTERNATIONAL INC. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(amounts in thousands except share data) | ||||||||
(unaudited) | ||||||||
Three months ended | Three months ended | |||||||
December 31, 2006 | % of sales | December 31, 2005 | % of sales | |||||
Net sales | $462,277 | (a) | 100.0 | $411,247 | 100.0 | |||
Cost of sales | 228,677 | 49.5 | 203,154 | 49.4 | ||||
Gross profit | 233,600 | 50.5 | 208,093 | 50.6 | ||||
Research and development | 21,823 | 4.7 | 20,840 | 5.1 | ||||
Selling, general and administrative | 134,240 | (b) | 29.0 | 118,493 | 28.8 | |||
Amortization | 3,005 | 0.7 | 2,821 | 0.7 | ||||
Interest expense | 4,657 | 1.0 | 3,594 | 0.9 | ||||
Other income, net | (1,385) | (0.3) | (772) | (0.2) | ||||
Earnings before taxes | 71,260 | 15.4 | 63,117 | 15.3 | ||||
Provision for taxes | 19,240 | 4.1 | 18,925 | 4.6 | ||||
Net earnings | $52,020 | 11.3 | $44,192 | 10.7 | ||||
Basic earnings per common share: | ||||||||
Net earnings | $1.34 | $1.06 | ||||||
Weighted average number of common shares | 38,882,113 | 41,549,018 | ||||||
Diluted earnings per common share: | ||||||||
Net earnings | $1.31 | $1.04 | ||||||
Weighted average number of common | 39,675,263 | 42,419,020 | ||||||
and common equivalent shares | ||||||||
Notes: | ||||||||
(a) | Local currency sales increased 8% as compared to the same period in 2005. | |||||||
(b) | Includes share-based compensation expense of $2.0 million ($1.4 million after-tax) for the three months ended December 31, 2006. | |||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME | ||||||||
Three months ended | Three months ended | |||||||
December 31, 2006 | % of sales | December 31, 2005 | % of sales | |||||
Earnings before taxes | $71,260 | $63,117 | ||||||
Share-based compensation | 1,961 | - | ||||||
Amortization | 3,005 | 2,821 | ||||||
Interest expense | 4,657 | 3,594 | ||||||
Other income, net | (1,385) | (772) | ||||||
Adjusted operating income | $79,498 | (a) | 17.2 | $68,760 | 16.7 | |||
Note: | ||||||||
(a) | Adjusted operating income increased 16% as compared to the same period in 2005. |
METTLER-TOLEDO INTERNATIONAL INC. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(amounts in thousands except share data) | ||||||||
(unaudited) | ||||||||
Twelve months ended | Twelve months ended | |||||||
December 31, 2006 | % of sales | December 31, 2005 | % of sales | |||||
Net sales | $1,594,912 | (a) | 100.0 | $1,482,472 | 100.0 | |||
Cost of sales | 804,480 | 50.4 | 752,153 | 50.7 | ||||
Gross profit | 790,432 | 49.6 | 730,319 | 49.3 | ||||
Research and development | 82,802 | 5.2 | 81,893 | 5.6 | ||||
Selling, general and administrative | 481,709 | (b) | 30.2 | 441,702 | 29.8 | |||
Amortization | 11,503 | 0.7 | 11,436 | 0.7 | ||||
Interest expense | 17,492 | 1.1 | 14,880 | 1.0 | ||||
Other charges (income), net | (7,921) | (0.5) | 20,224 | (d) | 1.4 | |||
Earnings before taxes | 204,847 | 12.9 | 160,184 | 10.8 | ||||
Provision for taxes | 47,315 | (c) | 3.0 | 51,282 | (e) | 3.5 | ||
Net earnings | $157,532 | 9.9 | $108,902 | 7.3 | ||||
Basic earnings per common share: | ||||||||
Net earnings | $3.93 | $2.58 | ||||||
Weighted average number of common shares | 40,065,951 | 42,207,777 | ||||||
Diluted earnings per common share: | ||||||||
Net earnings | $3.86 | $2.52 | ||||||
Weighted average number of common | 40,785,708 | 43,285,121 | ||||||
and common equivalent shares | ||||||||
Notes: | ||||||||
(a) | Local currency sales increased 7% as compared to the same period in 2005. | |||||||
(b) | Includes share-based compensation expense of $8.2 million ($5.5 million after-tax) for the twelve months ended December 31, 2006. | |||||||
(c) | Includes tax benefits related to a legal reorganization that resulted in the reduction of the estimated annual effective tax rate from 30% to 27% and discrete tax items of $8.0 million, net. The discrete items comprise a benefit of $2.9 million, net, associated with the legal reorganization and a benefit of $5.1 million resulting from a favorable tax law change. | |||||||
(d) | Includes a $21.8 million ($13.1 million after-tax) one-time litigation charge related to a $19.9 million ($12 million after-tax) non-cash write-off of an intellectual property license and $1.9 million ($1.1 million after-tax) of related legal costs. | |||||||
(e) | Includes a net tax charge of $5.4 million related to earnings repatriation associated with the American Jobs Creation Act of $13.1 million offset in part by the favorable resolution of certain tax contingencies of $7.7 million. | |||||||
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME | ||||||||
Twelve months ended | Twelve months ended | |||||||
December 31, 2006 | % of sales | December 31, 2005 | % of sales | |||||
Earnings before taxes | $204,847 | $160,184 | ||||||
Share-based compensation | 8,239 | - | ||||||
Amortization | 11,503 | 11,436 | ||||||
Interest expense | 17,492 | 14,880 | ||||||
Other charges (income), net | (7,921) | 20,224 | ||||||
Adjusted operating income | $234,160 | (a) | 14.7 | $206,724 | 13.9 | |||
Note: | ||||||||
(a) | Adjusted operating income increased 13% as compared to the same period in 2005. |
METTLER-TOLEDO INTERNATIONAL INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(amounts in thousands) |
(unaudited) |
December 31, 2006 | December 31, 2005 | ||
Cash and cash equivalents | $151,269 | $324,578 | |
Accounts receivable, net | 306,879 | 271,915 | |
Inventory | 148,372 | 150,201 | |
Other current assets and prepaid expenses | 63,250 | 53,965 | |
Total current assets | 669,770 | 800,659 | |
Property, plant and equipment, net | 229,138 | 218,519 | |
Goodwill and other intangibles | 535,621 | 528,209 | |
Other non-current assets | 152,556 | 122,386 | |
Total assets | $1,587,085 | $1,669,773 | |
Short-term debt | $9,962 | $6,345 | |
Accounts payable | 95,971 | 88,553 | |
Accrued and other current liabilities | 278,446 | 258,558 | |
Total current liabilities | 384,379 | 353,456 | |
Long-term debt | 345,705 | 443,795 | |
Other non-current liabilities | 226,139 | 213,520 | |
Total liabilities | 956,223 | 1,010,771 | |
Shareholders’ equity | 630,862 | 659,002 | |
Total liabilities and shareholders’ equity | $1,587,085 | $1,669,773 |
METTLER-TOLEDO INTERNATIONAL INC. | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(amounts in thousands) | |||||
(unaudited) | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
Three months ended | Twelve months ended | ||||
December 31, | December 31, |
2006 | 2005 | 2006 | 2005 | ||||
Cash flow from operating activities: | |||||||
Net earnings | $52,020 | $44,192 | $157,532 | $108,902 | |||
Adjustments to reconcile net earnings to | |||||||
net cash provided by operating activities: | |||||||
Depreciation | 6,752 | 6,519 | 26,069 | 25,977 | |||
Amortization | 3,005 | 2,821 | 11,503 | 11,436 | |||
Deferred taxation | 13,959 | 7,244 | 7,365 | 10,962 | |||
Excess tax benefits from share-based payment arrangements | (3,176) | - | (11,336) | - | |||
Other | 2,191 | (7,175) | 7,238 | 20,057 | |||
Increase (decrease) in cash resulting from changes in | |||||||
operating assets and liabilities | (22,901) | 5,869 | (6,805) | (275) | |||
Net cash provided by operating activities | 51,850 | 59,470 | 191,566 | 177,059 | |||
Cash flows from investing activities: | |||||||
Proceeds from sale of property, plant and equipment | 145 | 549 | 4,181 | 1,423 | |||
Purchase of property, plant and equipment | (13,722) | (11,452) | (34,329) | (32,498) | |||
Acquisitions | - | (103) | (790) | (4,087) | |||
Net cash used in investing activities | (13,577) | (11,006) | (30,938) | (35,162) | |||
Cash flows from financing activities: | |||||||
Proceeds from borrowings | 68,116 | 508,583 | 119,989 | 667,901 | |||
Repayments of borrowings | (84,997) | (283,873) | (234,602) | (414,578) | |||
Proceeds from exercise of stock options | 7,921 | 15,556 | 30,453 | 27,007 | |||
Excess tax benefits from share-based payment arrangements | 3,176 | - | 11,336 | - | |||
Repurchases of common stock (a) | (78,024) | (53,701) | (264,640) | (161,832) | |||
Refinancing fees | - | (760) | - | (760) | |||
Net cash provided by (used in) financing activities | (83,808) | 185,805 | (337,464) | 117,738 | |||
Effect of exchange rate changes on cash and cash equivalents | 1,446 | (4,087) | 3,527 | (2,233) | |||
Net increase (decrease) in cash and cash equivalents | (44,089) | 230,182 | (173,309) | 257,402 | |||
Cash and cash equivalents: | |||||||
Beginning of period | 195,358 | 94,396 | 324,578 | 67,176 | |||
End of period | $151,269 | $324,578 | $151,269 | $324,578 | |||
Note: | |||||
(a) The twelve months ended December 31, 2006 and 2005 include $4.2 million and $1.4 million, respectively, relating to the settlement of a | |||||
liability for shares purchased as of December 31, 2005 and 2004. | |||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW |
Net cash provided by operating activities | $51,850 | $59,470 | $191,566 | $177,059 | |||
Excess tax benefits from share-based payment arrangements | 3,176 | - | 11,336 | - | |||
Payments in respect of restructuring activities | - | 32 | - | 1,973 | |||
Proceeds from sale of property, plant and equipment | 145 | 549 | 4,181 | 1,423 | |||
Purchase of property, plant and equipment | (13,722) | (11,452) | (34,329) | (32,498) | |||
Free cash flow | $41,449 | $48,599 | $172,754 | $147,957 |
METTLER-TOLEDO INTERNATIONAL INC. | ||||
OTHER OPERATING STATISTICS | ||||
LOCAL CURRENCY SALES GROWTH BY DESTINATION | ||||
Europe | Americas | Asia/RoW | Total | |
Three Months Ended December 31, 2006 | 7% | 6% | 14% | 8% |
Twelve Months Ended December 31, 2006 | 7% | 5% | 10% | 7% |
RECONCILIATION OF DILUTED EPS AS REPORTED TO DILUTED EPS EXCLUDING | ||||||||||||
SHARE-BASED COMPENSATION EXPENSE AND ONE-TIME ITEMS | ||||||||||||
(unaudited) |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||
2006 | 2005 | % Growth | 2006 | 2005 | % Growth | |||||||
EPS as reported, diluted | $1.31 | $1.04 | 26% | $3.86 | $2.52 | 53% | ||||||
Discrete tax items (a) (b) | - | - | (0.20) | 0.12 | ||||||||
Share-based compensation (c) | 0.04 | - | 0.14 | - | ||||||||
Non-cash intangible write-off and litigation (d) | - | - | - | 0.30 | ||||||||
EPS excluding share-based compensation expense | ||||||||||||
and one-time items, diluted (e) | $1.35 | $1.04 | 30% | $3.80 | $2.94 | 29% | ||||||
Notes: | ||||||||||||
(a) | Discrete tax items in 2006 pertain to the EPS impact of tax benefits related to a legal reorganization of $2.9 million, net, and a benefit related to a favorable tax law change of $5.1 million. | |||||||||||
(b) | Discrete tax items in 2005 represent the EPS impact of net tax charges related to earnings repatriation associated with the American Job Creation Act of $13.1 million offset in part by the favorable resolution of certain tax contingencies of $7.7 million. | |||||||||||
(c) | EPS impact of $2.0 million ($1.4 million after-tax) for the three months ended December 31, 2006 and $8.2 million ($5.5 million after-tax) for the twelve months ended December 31, 2006 for share-based compensation expense. | |||||||||||
(d) | EPS impact of one-time litigation charge related to a $19.9 million ($12 million after-tax) non-cash write-off of an intellectual property license and $1.9 million ($1.1 million after-tax) of related legal costs. | |||||||||||
(e) | EPS for the periods ended December 31, 2006 and 2005 reflect an effective tax rate of 27% and 30%, respectively, excluding the tax items described in Notes (a) and (b) above. |