EXHIBIT 99-1
METTLER-TOLEDO INTERNATIONAL INC. REPORTS
SECOND QUARTER 2006 RESULTS
- - STRONG SECOND QUARTER OPERATING PERFORMANCE - -
- - SHARE REPURCHASE PROGRAM EXPANDED - -
GREIFENSEE, Switzerland and COLUMBUS, Ohio, USA - July 27, 2006 -
Mettler-Toledo International Inc. (NYSE: MTD) today announced net earnings
of $34.8 million, or $0.84 per share on a diluted basis, for the quarter
ended June 30, 2006. The second quarter 2006 results include $0.04 per
diluted share of share-based compensation expense. In the second quarter of
2005, net earnings per diluted share were $0.42, which included a one-time
$0.30 per share charge for the previously disclosed pipette litigation. The
second quarter 2005 results did not include any share-based compensation
expense. Excluding the effects of share-based compensation expense and the
one-time pipette litigation charge, net earnings per diluted share would
have increased 22% in the second quarter.
Sales for the quarter were $389.2 million, compared with $368.6 million in
the prior year, an increase of 5% in local currency sales. Reported sales
growth in the quarter was 6%, which includes a 1% favorable currency
benefit. By region, local currency sales growth for the quarter was 4% in
Europe, 7% in the Americas and 4% in Asia / Rest of World. In the quarter,
adjusted operating income amounted to $56.4 million, a 10% increase over
the prior year amount of $51.4 million.
Sales for the six-month period were $735.3 million, compared with $705.8
million in the prior year. This represents a 4% increase in reported sales,
consisting of 6% local currency sales growth and 2% unfavorable currency
impact. For the six-month period, net earnings per diluted share were $1.41
in 2006, which included $0.07 of share-based compensation. Net earnings per
share on a diluted basis in the comparable 2005 period were $0.89 and
included the above-mentioned $0.30 per share charge. Net earnings in 2005
did not include share-based compensation. Excluding the effects of
share-based compensation and the one-time pipette litigation charge, net
earnings per share would have increased 24% over the prior year period.
Adjusted operating income for the six-month period was $96.8 million in
2006, an 11% increase over the prior year amount of $87.1 million.
Cash flow from operations in the second quarter was $53.1 million, compared
with $50.6 million in the prior year quarter. Cash flow from operations in
the six month period was $72.2 million, compared with $57.3 million in the
prior year. The Company repurchased 0.8 million shares of its stock for
$49.2 million in the quarter and 1.9 million shares for $117.2 million
during the first six months of 2006.
Robert F. Spoerry, Chairman, President and Chief Executive Officer, stated,
"We are very pleased with our second quarter performance. We experienced
growth across all business areas. We had another quarter of year-over-year
improvement in gross margins, which helped to drive another quarter of
solid operating profit growth. Our EPS growth, adjusting for one-time
items, was very strong. Finally, our cash flow generation continues to be
solid."
The Company announced that the Board of Directors has authorized a $400
million increase to the share repurchase program through December 2008. The
Company currently has a $500 million stock repurchase program through the
end of 2007 of which $114 million is available as of June 30, 2006. Spoerry
commented, "The expanded share repurchase program reflects the confidence
we have in the organic growth potential of our business. Our balance sheet
and cash flow generation are very strong, and we believe the program will
continue to enhance shareholder value." The Company added that repurchases
will be made through open market transactions, and the timing will depend
on business and market conditions, stock price, trading restrictions, the
level of acquisition activity and other factors.
Spoerry concluded, "We had a strong first half in 2006 and are well
positioned to reach our targets for this year and to continue to grow our
business in the coming years. We have revised upward our full year EPS
targets to reflect our strong performance to date and our continued
positive outlook for the remainder of the year. Based on an economy and
market conditions similar to today's, we remain confident in our ability to
achieve these revised targets."
The Company stated that based on an economic environment and market
conditions similar to today's, it now expects 2006 EPS, including
share-based compensation expense, to be in the range of $3.26 to $3.31
compared with previous guidance of $3.22 to $3.27. EPS guidance, excluding
the impact of share-based compensation expense, is $3.40 to $3.45, compared
with previous guidance of $3.36 to $3.41. This guidance is based on local
currency sales growth in the range of 4% to 6%, which remains unchanged.
The Company added that it expects third quarter 2006 EPS, including the
impact of share-based compensation, to be $0.79 to $0.81 and, excluding
share-based compensation, to be $0.82 to $0.84.
The Company has provided a reconciliation of adjusted operating income to
earnings before taxes, the most comparable U.S. GAAP measure, in the
attached schedules.
The Company will host a conference call to discuss its second quarter
results today (Thursday, July 27) 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
June 30, 2006 % of sales June 30, 2005 % of sales
Net sales $ 389,157 (a) 100.0 $ 368,637 100.0
Cost of sales 196,722 50.6 188,212 51.1
----------- ----- ----------- -----
Gross profit 192,435 49.4 180,425 48.9
Research and development 20,562 5.3 20,936 5.7
Selling, general and administrative 117,576 (b) 30.2 108,115 29.3
Amortization 2,850 0.7 2,991 0.8
Interest expense 4,350 1.1 3,764 1.0
Other charges (income), net (2,557) (0.7) 21,581 (c) 5.9
----------- ----- ----------- -----
Earnings before taxes 49,654 12.8 23,038 6.2
Provision for taxes 14,897 3.9 4,727 1.2
----------- ----- ----------- -----
Net earnings $ 34,757 8.9 $ 18,311 5.0
=========== ===== =========== =====
Basic earnings per common share:
Net earnings $ 0.86 $ 0.43
Weighted average number of common shares 40,535,389 42,356,672
Diluted earnings per common share:
Net earnings $ 0.84 $ 0.42
Weighted average number of common 41,237,812 43,438,961
and common equivalent shares
Notes:
(a) Local currency sales increased 5% as compared to the same period in
2005.
(b) Includes share-based compensation expense of $2.1 million ($1.4
million after-tax) for the three months ended June 30, 2006.
(c) Includes a $21.8 million ($13.1 million after-tax), one-time pipette
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.
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
Three months ended Three months ended
June 30, 2006 % of sales June 30, 2005 % of sales
Earnings before taxes $ 49,654 $ 23,038
Share-based compensation 2,109 0
Amortization 2,850 2,991
Interest expense 4,350 3,764
Other charges (income), net (2,557) 21,581
----------- -----------
Adjusted operating income $ 56,406 (a) 14.5 $ 51,374 13.9
=========== ===========
Note:
(a) Adjusted operating income increased 10% as compared to the same period
in 2005.
METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
Six months ended Six months ended
June 30, 2006 % of sales June 30, 2005 % of sales
Net sales $ 735,317 (a) 100.0 $ 705,797 100.0
Cost of sales 372,542 50.7 362,577 51.4
----------- ----- ----------- -----
Gross profit 362,775 49.3 343,220 48.6
Research and development 40,501 5.5 41,738 5.9
Selling, general and administrative 229,707 (b) 31.2 214,432 30.4
Amortization 5,705 0.8 5,799 0.8
Interest expense 8,426 1.1 7,280 1.0
Other charges (income), net (5,095) (0.7) 21,245 (c) 3.0
----------- ----- ----------- -----
Earnings before taxes 83,531 11.4 52,726 7.5
Provision for taxes 25,059 3.4 13,634 2.0
----------- ----- ----------- -----
Net earnings $ 58,472 8.0 $ 39,092 5.5
=========== ===== =========== =====
Basic earnings per common share:
Net earnings $1.43 $0.91
Weighted average number of common shares 40,793,119 42,747,953
Diluted earnings per common share:
Net earnings $ 1.41 $ 0.89
Weighted average number of common 41,505,940 43,913,966
and common equivalent shares
Notes:
(a) Local currency sales increased 6% as compared to the same period in
2005.
(b) Includes share-based compensation expense of $4.3 million ($2.8
million after-tax) for the six months ended June 30, 2006.
(c) Includes a $21.8 million ($13.1 million after-tax), one-time pipette
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.
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
Six months ended Six months ended
June 30, 2006 % of sales June 30, 2005 % of sales
Earnings before taxes $ 83,531 $ 52,726
Share-based compensation 4,268 0
Amortization 5,705 5,799
Interest expense 8,426 7,280
Other charges (income), net (5,095) 21,245
----------- ----- ----------- -----
Adjusted operating income $ 96,835 (a) 13.2 $ 87,050 12.3
=========== ===== =========== =====
Note:
(a) Adjusted operating income increased 11% as compared to the same period
in 2005.
METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
June 30, 2006 December 31, 2005
Cash and cash equivalents $ 246,766 $ 324,578
Accounts receivable, net 265,586 271,915
Inventory 162,609 150,201
Other current assets and prepaid expenses 60,548 53,965
----------- -----------
Total current assets 735,509 800,659
Property, plant and equipment, net 219,566 218,519
Goodwill and other intangibles 533,264 528,209
Other non-current assets 128,339 122,386
----------- -----------
Total assets $ 1,616,678 $ 1,669,773
=========== ===========
Short-term debt $ 8,201 $ 6,345
Accounts payable 79,818 88,553
Accrued and other current liabilities 261,356 258,558
----------- -----------
Total current liabilities 349,375 353,456
Long-term debt 412,787 443,795
Other non-current liabilities 222,751 213,520
----------- -----------
Total liabilities 984,913 1,010,771
Shareholders' equity 631,765 659,002
----------- -----------
Total liabilities and shareholders' equity $ 1,616,678 $ 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 Six months ended
June 30, June 30,
2006 2005 2006 2005
Cash flow from operating activities:
Net earnings $ 34,757 $ 18,311 $ 58,472 $ 39,092
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 6,541 6,463 12,895 13,116
Amortization 2,850 2,991 5,705 5,799
Deferred taxation (3,365) (9,746) (5,045) (12,352)
Excess tax benefits from share-based payment arrangements (2,177) - (7,748) -
Other 1,950 19,930 2,948 19,930
Increase in cash resulting from changes in
operating assets and liabilities 12,558 12,643 5,020 (8,305)
--------- --------- --------- ---------
Net cash provided by operating activities 53,114 50,592 72,247 57,280
--------- --------- --------- ---------
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment 1,959 176 3,597 594
Purchase of property, plant and equipment (5,795) (6,578) (11,799) (11,923)
Acquisitions (218) 0 (790) (213)
--------- --------- --------- ---------
Net cash used in investing activities (4,054) (6,402) (8,992) (11,542)
--------- --------- --------- ---------
Cash flows from financing activities:
Proceeds from borrowings 22,033 52,364 29,729 86,619
Repayments of borrowings (48,565) (15,005) (75,349) (23,436)
Proceeds from exercise of stock options 7,726 1,951 17,467 3,925
Excess tax benefits from share-based payment arrangements 2,177 - 7,748 -
Repurchases of common stock (a) (49,241) (46,297) (121,344) (74,650)
--------- --------- --------- ---------
Net cash used in financing activities (65,870) (6,987) (141,749) (7,542)
--------- --------- --------- ---------
Effect of exchange rate changes on cash and cash equivalents 179 (1,119) 682 (1,508)
--------- --------- --------- ---------
Net increase (decrease) in cash and cash equivalents (16,631) 36,084 (77,812) 36,688
Cash and cash equivalents:
Beginning of period 263,397 67,780 324,578 67,176
--------- --------- --------- ---------
End of period $ 246,766 $ 103,864 $ 246,766 $ 103,864
========= ========= ========= =========
Note:
(a) The six months ended June 30, 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 $ 53,114 $ 50,592 $ 72,247 $ 57,280
Excess tax benefits from share-based payment arrangements 2,177 0 7,748 0
Payments in respect of restructuring activities 0 1,096 0 1,521
Proceeds from sale of property, plant and equipment 1,959 176 3,597 594
Purchase of property, plant and equipment (5,795) (6,578) (11,799) (11,923)
--------- --------- --------- ---------
Free cash flow $ 51,455 $ 45,286 $ 71,793 $ 47,472
========= ========= ========= =========
METTLER-TOLEDO INTERNATIONAL INC.
OTHER OPERATING STATISTICS
LOCAL CURRENCY SALES GROWTH BY DESTINATION
Europe Americas Asia/RoW Total
----------------------------------------
Three Months Ended June 30, 2006 4% 7% 4% 5%
Six Months Ended June 30, 2006 7% 4% 8% 6%
RECONCILIATION OF DILUTED EPS AS REPORTED TO DILUTED EPS EXCLUDING
SHARE-BASED COMPENSATION EXPENSE AND ONE-TIME ITEMS
(unaudited)
Three months ended Six months ended
June 30, June 30,
2006 2005 2006 2005
EPS as reported, diluted $0.84 (c) $0.42 $1.41 (e) $0.89
Share-based compensation (a) 0.04 - 0.07 -
Non-cash intangible write-off and litigation (b) - 0.30 - 0.30
-------- ------- ------ -------
EPS excluding share-based compensation expense
and one-time items, diluted $0.88 (d) $0.72 $1.48 (f) $1.19
======== ======= ======= =======
Notes:
(a) EPS impact of $2.1 million ($1.4 million after-tax) for the three
months ended and $4.3 million ($2.8 million after-tax) for the six
months ended for share-based compensation expense.
(b) EPS impact of one-time pipette 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.
(c) EPS, as reported, increased 100% for the three months ended June 30,
2006 as compared to the same period in 2005.
(d) EPS, excluding share-based compensation expense and one-time items,
increased 22% for the three months ended June 30, 2006 as compared to
the same period in 2005.
(e) EPS, as reported, increased 58% for the six months ended June 30, 2006
as compared to the same period in 2005.
(f) EPS, excluding share-based compensation expense and one-time items,
increased 24% for the six months ended June 30, 2006 as compared to
the same period in 2005.