EXHIBIT 99.1
METTLER-TOLEDO INTERNATIONAL INC. REPORTS
THIRD QUARTER 2006 RESULTS
- - STRONG LOCAL CURRENCY SALES GROWTH - -
- - STRONG EARNINGS AND CASH FLOW GROWTH - -
GREIFENSEE, Switzerland and COLUMBUS, Ohio, USA - November 2, 2006 -
Mettler-Toledo International Inc. (NYSE: MTD) today announced net earnings
per diluted share of $1.16 for the quarter ended September 30, 2006. During
the quarter, the Company reduced its annual effective tax rate from 30% to
27%. As a result, the third quarter earnings included a discrete tax
benefit of $0.06 per share to adjust the tax rate for the first two
quarters of 2006 to 27%. The third quarter results also included an
additional $0.19 per share net benefit for other discrete tax items and
$0.03 per share expense of share-based compensation.
In the third quarter of 2005, net earnings per diluted share were $0.60 and
included a net charge of $0.12 due to discrete tax items. The third quarter
2005 results did not include any share-based compensation expense.
Net earnings per diluted share on a reported basis increased 93% in the
third quarter 2006 over the prior year quarter. Adjusting for the one-time
tax items in both periods and for share-based compensation expense - - net
earnings per diluted share would have increased 31% over the prior year. To
facilitate comparability, a reconciliation of EPS is provided in the
attached schedules.
Robert F. Spoerry, Chairman, President and Chief Executive Officer, stated,
"We are very pleased with our strong sales growth and operating performance
in the quarter - particularly in light of the solid results in the year-ago
quarter. Demand in most of our markets is favorable, and sales increased in
all key businesses and geographic regions. We continue to reinforce our
technology leadership with new product introductions, and our sales and
marketing initiatives are proving highly effective. Positive market
conditions and our focus on execution led to a healthy increase in
operating profit and robust cash flow generation. Our EPS growth of 31% on
a comparable basis was excellent."
Sales for the quarter were $397.3 million, compared with $365.4 million in
the prior year, an increase of 7% in local currency sales. Reported sales
growth in the quarter was 9%, which includes a 2% favorable currency
benefit. By region, local currency sales growth for the quarter was 5% in
Europe, 6% in the Americas and 11% in Asia / Rest of World. In the quarter,
adjusted operating income amounted to $57.8 million, a 14% increase over
the prior period amount of $50.9 million.
For the nine-month period, net earnings per diluted share were $2.56 in
2006, which included the $0.19 net tax benefit as mentioned above and $0.10
of share-based compensation. Net earnings per diluted share in the
comparable 2005 period were $1.49 and included the above-mentioned $0.12
tax charge and $0.30 charge for previously disclosed litigation. Net
earnings in 2005 did not include share-based compensation. On an as
reported basis, net earnings per diluted share increased 72% over the prior
year period. Excluding the effects of the one-time items in both periods
and share-based compensation, net earnings per diluted share would have
increased 29% over the prior year. To facilitate comparability, a
reconciliation of EPS is provided in the attached schedules.
Sales for the nine-month period were $1.133 billion, compared with $1.071
billion in the prior year. This represents a 6% increase in reported sales,
consisting of 6% local currency sales growth and no impact due to currency.
Adjusted operating income for the nine-month period was $154.7 million in
2006, a 12% increase over the prior year amount of $138.0 million.
Cash flow from operations in the third quarter was $67.5 million, compared
with $60.3 million in the prior year quarter. Cash flow from operations in
the nine-month period was $139.7 million, compared with $117.6 million in
the prior year. The Company repurchased 1.1 million shares of its stock for
$65.3 million in the third quarter and 3.0 million shares for $182.4
million in the first nine months of 2006.
The Company stated that it expects EPS for the fourth quarter of 2006 to be
in the range of $1.16 to $1.21, which includes share-based compensation.
This estimate assumes local currency sales growth of 3% to 5%. The Company
noted that it completed a tax reorganization in the third quarter of 2006
and, as a result, it expects its effective tax rate in the fourth quarter
to be approximately 27%. EPS in the fourth quarter, excluding share-based
compensation, is estimated at $1.20 to $1.25.
The fourth quarter estimates would result in local currency sales growth of
approximately 6% for the full year 2006 and as reported EPS in the range of
$3.72 to $3.77. This estimate includes a net $0.19 per share benefit for
discrete tax items as mentioned earlier and a $0.14 charge for share-based
compensation. Excluding both share-based compensation and discrete tax
items, EPS for the full year would be in the range of $3.67 to $3.72 and
represents approximately 26% growth over comparable 2005 EPS.
The Company stated that based on an economic environment and market
conditions similar to today's, it expects 2007 EPS to be in the range of
$4.00 to $4.10, assuming local currency sales growth in the 4% to 6% range.
The Company noted the 2007 estimates include share-based compensation and
reflect an effective tax rate of approximately 27%. On a comparable basis
excluding the one-time tax items in 2006 and using the mid-points of the
2006 and 2007 estimates, this represents a growth of approximately 14%.
Spoerry concluded, "We are cautiously optimistic as we look toward 2007. We
assume market conditions will remain positive, and we are confident in our
ability to execute our initiatives. As always we will monitor our end
markets and react should conditions change. We have a well-proven strategy
in place that is aimed at generating solid sales growth which, when
combined with our margin improvement initiatives and share repurchase
strategy, generates strong earnings growth."
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 third quarter
results today (Thursday, November 2) 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
September 30, 2006 % of sales September 30, 2005 % of sales
Net sales $ 397,318 (a) 100.0 $ 365,428 100.0
Cost of sales 203,261 51.2 186,422 51.0
----------- ----- ----------- -----
Gross profit 194,057 48.8 179,006 49.0
Research and development 20,478 5.2 19,315 5.3
Selling, general and administrative 117,762 (b) 29.6 108,777 29.8
Amortization 2,793 0.7 2,816 0.8
Interest expense 4,409 1.1 4,006 1.1
Other income, net (1,441) (0.4) (249) (0.1)
----------- ----- ----------- -----
Earnings before taxes 50,056 12.6 44,341 12.1
Provision for taxes 3,016 (c) 0.8 18,723 (d) 5.1
----------- ----- ----------- -----
Net earnings $ 47,040 11.8 $ 25,618 7.0
=========== ===== =========== =====
Basic earnings per common share:
Net earnings $ 1.18 $ 0.61
Weighted average number of common shares 39,795,452 41,786,186
Diluted earnings per common share:
Net earnings $ 1.16 $ 0.60
Weighted average number of common 40,455,687 42,893,530
and common equivalent shares
<FN>
Notes:
(a) Local currency sales increased 7% as compared to the same period in
2005.
(b) Includes share-based compensation expense of $2.0 million ($1.3
million after-tax) for the three months ended September 30, 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 $10.5 million, net. The discrete
items comprise a benefit of $2.9 million, net, associated with the
legal reorganization, a benefit of $5.1 million resulting from a
favorable tax law change and a $2.5 million cumulative tax benefit
adjustment related to the tax rate change associated with the first
six months of 2006.
(d) 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.
</FN>
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
Three months ended Three months ended
September 30, 2006 % of sales September 30, 2005 % of sales
Earnings before taxes $ 50,056 $ 44,341
Share-based compensation 2,011 0
Amortization 2,793 2,816
Interest expense 4,409 4,006
Other income, net (1,441) (249)
----------- ----- ----------- -----
Adjusted operating income $ 57,828 (a) 14.6 $ 50,914 13.9
=========== ===== =========== =====
<FN>
Note:
(a) Adjusted operating income increased 14% as compared to the same period
in 2005.
</FN>
METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
Nine months ended Nine months ended
September 30, 2006 % of sales September 30, 2005 % of sales
Net sales $ 1,132,635 (a) 100.0 $ 1,071,225 100.0
Cost of sales 575,803 50.8 548,999 51.2
----------- ----- ----------- -----
Gross profit 556,832 49.2 522,226 48.8
Research and development 60,979 5.4 61,053 5.7
Selling, general and administrative 347,469 (b) 30.7 323,209 30.2
Amortization 8,498 0.8 8,615 0.8
Interest expense 12,835 1.1 11,286 1.1
Other charges (income), net (6,536) (0.6) 20,996 (d) 2.0
----------- ----- ----------- -----
Earnings before taxes 133,587 11.8 97,067 9.0
Provision for taxes 28,075 (c) 2.5 32,357 (e) 3.0
----------- ----- ----------- -----
Net earnings $ 105,512 9.3 $ 64,710 6.0
=========== ===== =========== =====
Basic earnings per common share:
Net earnings $ 2.61 $ 1.53
Weighted average number of common shares 40,460,563 42,427,364
Diluted earnings per common share:
Net earnings $ 2.56 $ 1.49
Weighted average number of common 41,155,856 43,573,821
and common equivalent shares
<FN>
Notes:
(a) Local currency sales increased 6% as compared to the same period in
2005.
(b) Includes share-based compensation expense of $6.3 million ($4.1
million after-tax) for the nine months ended September 30, 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.
</FN>
RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING INCOME
Nine months ended Nine months ended
September 30, 2006 % of sales September 30, 2005 % of sales
Earnings before taxes $ 133,587 $ 97,067
Share-based compensation 6,278 0
Amortization 8,498 8,615
Interest expense 12,835 11,286
Other charges (income), net (6,536) 20,996
----------- ----- ----------- -----
Adjusted operating income $ 154,662 (a) 13.7 $ 137,964 12.9
=========== ===== =========== =====
<FN>
Note:
(a) Adjusted operating income increased 12% as compared to the same period
in 2005.
</FN>
METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
September 30, 2006 December 31, 2005
Cash and cash equivalents $ 195,358 $ 324,578
Accounts receivable, net 270,712 271,915
Inventory 160,720 150,201
Other current assets and prepaid expenses 61,652 53,965
----------- -----------
Total current assets 688,442 800,659
Property, plant and equipment, net 220,331 218,519
Goodwill and other intangibles 534,761 528,209
Other non-current assets 119,030 122,386
----------- -----------
Total assets $ 1,562,564 $ 1,669,773
=========== ===========
Short-term debt $ 7,738 $ 6,345
Accounts payable 82,599 88,553
Accrued and other current liabilities 273,038 258,558
----------- -----------
Total current liabilities 363,375 353,456
Long-term debt 361,418 443,795
Other non-current liabilities 211,304 213,520
----------- -----------
Total liabilities 936,097 1,010,771
Shareholders' equity 626,467 659,002
----------- -----------
Total liabilities and shareholders' equity $ 1,562,564 $ 1,669,773
=========== ===========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Nine months ended
September 30, September 30,
2006 2005 2006 2005
Cash flow from operating activities:
Net earnings $ 47,040 $ 25,618 $ 105,512 $ 64,710
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 6,422 6,342 19,317 19,458
Amortization 2,793 2,816 8,498 8,615
Deferred taxation (1,549) 7,244 (6,594) (5,108)
Excess tax benefits from share-based payment arrangements (412) - (8,160) -
Other 2,099 (124) 5,047 19,806
Increase in cash resulting from changes in
operating assets and liabilities 11,076 18,413 16,096 10,108
--------- --------- --------- ---------
Net cash provided by operating activities 67,469 60,309 139,716 117,589
--------- --------- --------- ---------
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment 439 280 4,036 874
Purchase of property, plant and equipment (8,808) (9,123) (20,607) (21,046)
Acquisitions 0 (3,771) (790) (3,984)
--------- --------- --------- ---------
Net cash used in investing activities (8,369) (12,614) (17,361) (24,156)
--------- --------- --------- ---------
Cash flows from financing activities:
Proceeds from borrowings 22,144 72,699 51,873 159,318
Repayments of borrowings (74,256) (107,269) (149,605) (130,705)
Proceeds from exercise of stock options 5,065 7,526 22,532 11,451
Excess tax benefits from share-based payment arrangements 412 - 8,160 -
Repurchases of common stock (a) (65,272) (33,481) (186,616) (108,131)
--------- --------- --------- ---------
Net cash used in financing activities (111,907) (60,525) (253,656) (68,067)
--------- --------- --------- ---------
Effect of exchange rate changes on cash and cash equivalents 1,399 3,362 2,081 1,854
--------- --------- --------- ---------
Net increase (decrease) in cash and cash equivalents (51,408) (9,468) (129,220) 27,220
Cash and cash equivalents:
Beginning of period 246,766 103,864 324,578 67,176
--------- --------- --------- ---------
End of period $ 195,358 $ 94,396 $ 195,358 $ 94,396
========= ========= ========= =========
<FN>
Note:
(a) The nine months ended September 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.
</FN>
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
Net cash provided by operating activities $ 67,469 $ 60,309 $ 139,716 $ 117,589
Excess tax benefits from share-based payment arrangements 412 - 8,160 -
Payments in respect of restructuring activities 0 420 0 1,941
Proceeds from sale of property, plant and equipment 439 280 4,036 874
Purchase of property, plant and equipment (8,808) (9,123) (20,607) (21,046)
--------- --------- --------- ---------
Free cash flow $ 59,512 $ 51,886 $ 131,305 $ 99,358
========= ========= ========= =========
METTLER-TOLEDO INTERNATIONAL INC.
OTHER OPERATING STATISTICS
LOCAL CURRENCY SALES GROWTH BY DESTINATION
Europe Americas Asia/RoW Total
-------------------------------------------------
Three Months Ended September 30, 2006 5% 6% 11% 7%
Nine Months Ended September 30, 2006 7% 5% 9% 6%
RECONCILIATION OF DILUTED EPS AS REPORTED TO DILUTED EPS EXCLUDING
SHARE-BASED COMPENSATION EXPENSE AND ONE-TIME ITEMS
(UNAUDITED)
Three months ended Nine months ended
September 30, September 30,
------------------------------- -------------------------------
% %
2006 2005 Growth 2006 2005 Growth
-------- -------- ---------- -------- -------- ----------
EPS as reported, diluted $ 1.16 $ 0.60 93% $ 2.56 $ 1.49 72%
Discrete tax items:
Benefit in Q3 of adjusting Q1 and Q2 tax rate (a) (0.06) - - -
Other discrete tax items (b) (c) (0.19) 0.12 (0.19) 0.12
Share-based compensation (d) 0.03 - 0.10 -
Non-cash intangible write-off and litigation (e) - - - 0.30
------ ------ ------ ------
EPS excluding share-based compensation expense
and one-time items, diluted (f) $ 0.94 $ 0.72 31% $ 2.47 $ 1.91 29%
====== ====== ====== ======
<FN>
Notes:
(a) EPS impact during the three months ended September 30, 2006 of
adjusting the estimated annual effective tax rate from 30% to 27%, or
$2.5 million, relating to the six months ended June 30, 2006.
(b) 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.
(c) 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.
(d) EPS impact of $2.0 million ($1.3 million after-tax) for the three
months ended September 30, 2006 and $6.3 million ($4.1 million
after-tax) for the nine months ended September 30, 2006 for
share-based compensation expense.
(e) 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.
(f) EPS for the periods ended September 30, 2006 and 2005 reflect an
effective tax rate of 27% and 30%, respectively.
</FN>