SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998, OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO
________________
Commission File Number 1-13595
Mettler-Toledo International Inc.
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(Exact name of registrant as specified in its charter)
Delaware 13-3668641
--------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Im Langacher, P.O. Box MT-100
CH 8608 Greifensee, Switzerland
--------------------------------- -----------------------
(Address of principal executive offices) (Zip Code)
41-1-944-22-11
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No____
The Registrant has 38,336,014 shares of Common Stock outstanding at March
31, 1998.
METTLER-TOLEDO INTERNATIONAL INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
Page No.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Unaudited Interim Consolidated Financial Statements:
Interim Consolidated Balance Sheets as of December 31, 1997 3
and March 31, 1998
Interim Consolidated Statements of Operations for the three 4
months ended March 31, 1997 and 1998
Interim Consolidated Statements of Shareholders' Equity 5
for the three months ended March 31, 1997 and 1998
Interim Consolidated Statements of Cash Flows for the three 6
months ended March 31, 1997 and 1998
Notes to the Interim Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
ITEM 3. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 13
PART II. OTHER INFORMATION 13
ITEM 1. LEGAL PROCEEDINGS 13
ITEM 2. CHANGES IN SECURITY 13
ITEM 3. DEFAULT UPON SENIOR SECURITIES 13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 13
ITEM 5. OTHER INFORMATION 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
Signature 14
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND MARCH 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
DECEMBER 31, MARCH 31,
1997 1998
---- ----
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $23,566 $21,303
Trade accounts receivable, net 153,619 152,396
Inventories 101,047 101,020
Deferred taxes 7,584 7,628
Other current assets and prepaid expenses 24,066 24,602
------------- --------------
Total current assets 309,882 306,949
Property, plant and equipment, net 235,262 224,230
Excess of cost over net assets acquired, net 183,318 182,323
Non-current deferred taxes 5,045 5,228
Other assets 15,806 16,408
------------- --------------
Total assets $749,313 $735,138
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $39,342 $32,166
Accrued and other liabilities 80,844 94,389
Accrued compensation and related items 43,214 38,938
Taxes payable 33,267 32,557
Deferred taxes 10,486 10,093
Short-term borrowings and current maturities of
long-term debt 56,430 54,952
------------- --------------
Total current liabilities 263,583 263,095
Long-term debt 340,334 319,207
Non-current deferred taxes 25,437 24,142
Other non-current liabilities 91,011 91,181
------------- --------------
Total liabilities 720,365 697,625
Minority interest 3,549 3,587
Shareholders' equity:
Preferred stock, $0.01 par value per share;
authorized 10,000,000 shares - -
Common stock, $0.01 par value per share; authorized
125,000,000 shares: issued 38,336,014 shares
(excluding 64,467 shares held in treasury) 383 383
Additional paid-in capital 284,630 284,630
Accumulated deficit (224,152) (217,314)
Accumulated other comprehensive income (35,462) (33,773)
------------- --------------
Total shareholders' equity 25,399 33,926
Commitments and contingencies
------------- --------------
Total liabilities and shareholders' equity $749,313 $735,138
============= ==============
See the accompanying notes to the interim consolidated financial statements
METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 AND 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
MARCH 31, MARCH 31,
1997 1998
---- ----
(UNAUDITED) (UNAUDITED)
Net sales $197,402 $215,655
Cost of sales 114,120 121,048
------------- ---------------
Gross profit 83,282 94,607
Research and development 10,832 10,795
Selling, general and administrative 60,193 65,112
Amortization 1,157 1,818
Interest expense 9,446 5,879
Other charges, net 3,754 454
------------- ---------------
Earnings (loss) before taxes and
minority interest (2,100) 10,549
Provision (benefit) for taxes (1,087) 3,692
Minority interest 109 19
------------- ---------------
Net earnings (loss) $(1,122) $6,838
============= ===============
Basic earnings (loss) per common share:
Net earnings (loss) $(0.04) $0.18
Weighted average number of common shares 30,686,065 38,336,014
Diluted earnings (loss) per common share:
Net earnings (loss) $(0.04) $0.17
Weighted average number of common shares 30,686,065 40,600,109
See the accompanying notes to the interim consolidated financial statements
METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1997 AND 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
COMMON STOCK ACCUMULATED
ALL CLASSES ADDITIONAL OTHER
------------------- PAID-IN ACCUMULATED COMPREHENSIVE
SHARES AMOUNT CAPITAL DEFICIT INCOME TOTAL
------ ------ ------- ------- ------ -----
Balance at December 31, 1996 2,438,514 $25 $188,084 $(159,046) $(16,637) $12,426
Comprehensive income
Net loss - - - (1,122) - (1,122)
Change in currency
translation adjustment - - - - (8,322) (8,322)
-------------
Comprehensive income (9,444)
------------ ------------ --------- ----------- ------------ -------------
Balance at March 31, 1997 2,438,514 $25 $188,084 $(160,168) $(24,959) $2,982
============ ============ ========= =========== ============ =============
Balance at December 31, 1997 38,336,014 $383 $284,630 $(224,152) $(35,462) $25,399
Comprehensive income
Net earnings - - - 6,838 - 6,838
Change in currency
translation adjustment - - - - 1,689 1,689
-------------
Comprehensive income 8,527
------------ ------------ --------- ----------- ------------ -------------
Balance at March 31, 1998 38,336,014 $383 $284,630 $(217,314) $(33,773) $33,926
============ ============ ========= =========== ============ =============
See the accompanying notes to the interim consolidated financial statements
METTLER-TOLEDO INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1998
(IN THOUSANDS)
MARCH 31, MARCH 31,
1997 1998
---- ----
(UNAUDITED) (UNAUDITED)
Cash flow from operating activities:
Net earnings (loss) $(1,122) $6,838
Adjustments to reconcile net
earnings (loss) to net cash
provided by operating activities:
Depreciation 5,821 5,877
Amortization 1,157 1,818
Net gain on disposal of long-term assets (53) (2,142)
Deferred taxes (1,446) (611)
Minority interest 109 19
Increase (decrease) in cash resulting from changes in:
Trade accounts receivable, net (8,557) (164)
Inventories (7,819) (1,121)
Other current assets (2,405) (2,247)
Trade accounts payable (1,436) (6,729)
Accruals and other liabilities, net 23,832 10,623
--------------- ---------------
Net cash provided by operating
activities 8,081 12,161
--------------- ---------------
Cash flows from investing activities:
Proceeds from sale of property,
plant and equipment 431 12,183
Purchase of property, plant and equipment (3,063) (7,417)
Acquisitions - (2,573)
Other investing activities (98) -
--------------- ---------------
Net cash provided by (used in)
investing activities (2,730) 2,193
--------------- ---------------
Cash flows from financing activities:
Proceeds from borrowings 1,055 3,447
Repayments of borrowings (23,160) (19,922)
--------------- ---------------
Net cash used in financing
activities (22,105) (16,475)
--------------- ---------------
Effect of exchange rate changes on cash and cash
equivalents (3,343) (142)
--------------- ---------------
Net decrease in cash and cash equivalents (20,097) (2,263)
Cash and cash equivalents:
Beginning of period $60,696 $23,566
--------------- ---------------
End of period $40,599 $21,303
=============== ===============
See the accompanying notes to the interim consolidated financial statements
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(In thousands unless otherwise stated)
1. BASIS OF PRESENTATION
Mettler-Toledo International Inc. ("Mettler Toledo" or the "Company"),
formerly MT Investors Inc., is a global supplier of precision instruments
and is a manufacturer and marketer of weighing instruments for use in
laboratory, industrial and food retailing applications. The Company also
manufactures and sells certain related analytical and measurement
technologies. The Company's manufacturing facilities are located in
Switzerland, the United States, Germany, the U.K. and China. The Company's
principal executive offices are located in Greifensee, Switzerland.
The Company was incorporated by AEA Investors Inc. ("AEA") and
recapitalized to effect the acquisition (the "Acquistion") of the
Mettler-Toledo Group from Ciba-Geigy AG ("Ciba") and its wholly owned
subsidiary, AG fur Prazisionsinstrumente ("AGP") on October 15, 1996. The
Company has accounted for the Acquisition using the purchase method of
accounting. Accordingly, the costs of the Acquisition were allocated to the
assets acquired and liabilities assumed based upon their respective fair
values.
The accompanying interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles in the
United States of America on a basis which reflects the interim consolidated
financial statements of the Company. The interim consolidated financial
statements have been prepared without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The interim
consolidated financial statements as of March 31, 1998 and for the three
month periods ended March 31, 1997 and 1998 should be read in conjunction
with the December 31, 1996 and 1997 consolidated financial statements and
the notes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997.
The accompanying interim consolidated financial statements reflect all
adjustments (consisting of only normal recurring adjustments) which, in the
opinion of management, are necessary for a fair statement of the results of
the interim periods presented. Operating results for the three months ended
March 31, 1998 are not necessarily indicative of the results to be expected
for the full year ending December 31, 1998.
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, as well as disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results may differ from
those estimates.
METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(In thousands unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
Inventories are valued at the lower of cost or market. Cost, which includes
direct materials, labor and overhead plus indirect overhead, is determined
using either the first in, first out (FIFO) or weighted average cost
methods and to a lesser extent the last in, first out (LIFO) method.
Inventories consisted of the following at December 31, 1997 and March 31,
1998:
December 31, March 31,
1997 1998
---------------- ----------------
Raw materials and parts $42,435 $39,760
Work in progress 29,746 32,602
Finished goods 28,968 28,763
---------------- ----------------
101,149 101,125
LIFO reserve (102) (105)
----------------
$101,047 $101,020
================ ================
EARNINGS (LOSS) PER COMMON SHARE
Effective December 31, 1997, the Company adopted the Statement of Financial
Accounting Standards No. 128, "Earnings per Share" ("SFAS 128").
Accordingly, basic and diluted earnings (loss) per common share data for
each period presented have been determined in accordance with the
provisions of SFAS 128. In accordance with the treasury stock method, the
Company has included 2,264,095 equivalent shares related to 4,408,740
outstanding options to purchase shares of common stock, as described in
Note 11 in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, in the calculation of diluted weighted average number of
common shares for the period ended March 31, 1998. Such common stock
equivalents were not included in the computation of diluted loss per common
share for the period ended March 31, 1997, as the effect is antidilutive.
The Company retroactively adjusted its weighted average common shares for
the purpose of the basic and diluted loss per common share computations for
the 1997 period pursuant to SFAS 128 and Securities and Exchange Commission
Staff Accounting Bulletin No. 98 issued in February 1998.
REPORTING COMPREHENSIVE INCOME
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive
Income." SFAS 130 requires that changes in the amounts of certain items,
including foreign currency translation adjustments, be shown in the
financial statements. The Company has displayed comprehensive income and
its components in the Interim Consolidated Statements of Shareholders'
Equity. Prior year financial statements have been restated to reflect the
application of SFAS 130 as required by the standard. The adoption of SFAS
130 did not have a material effect on the Company's consolidated financial
statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with the Unaudited
Interim Consolidated Financial Statements included herein.
GENERAL
The accompanying interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles in the
United States of America on a basis which reflects the interim consolidated
financial statements of Mettler-Toledo International Inc. ("the Company").
Operating results for the three months ended March 31, 1998 are not
necessarily indicative of the results to be expected for the full year
ending December 31, 1998.
On May 30, 1997, the Company acquired Safeline for (pound)61.0 million
(approximately $100 million at May 30, 1997) plus up to an additional
(pound)6.0 million (approximately $10.0 million at May 30, 1997) for a
contingent earn-out payment. In October 1997, the Company made an
additional payment, representing a post-closing adjustment, of (pound)1.9
million (approximately $3.1 million at October 3, 1997). Such amount has
been accounted for as additional purchase price. Safeline, based in
Manchester, U.K., is the world's largest manufacturer and marketer of metal
detection systems for companies that produce and package goods in the food
processing, pharmaceutical, cosmetics, chemicals and other industries.
Safeline's metal detectors can also be used in conjunction with the
Company's checkweighing products for important quality and safety checks in
these industries. The Safeline Acquisition was financed by borrowings under
the Company's then-existing credit facility together with the issuance of
(pound)13.7 million (approximately $22.4 million at May 30, 1997) of seller
loan notes which mature May 30, 1999. At March 31, 1998 (pound)4.5 million
(approximately $7.5 million at March 31, 1998) remained outstanding under
the seller loan notes.
During the fourth quarter of 1997, the Company completed its initial public
offering of 7,666,667 shares of Common Stock, including the underwriters'
over-allotment option, (the "Offering") at a per share price equal to
$14.00. The Offering raised net proceeds, after underwriters' commission
and expenses, of approximately $97.3 million. In connection with the
Offering, the Company effected a merger by and between it and its direct
wholly owned subsidiary, Mettler-Toledo Holding Inc., whereby
Mettler-Toledo Holding Inc. was merged with and into the Company (the
"Merger"). In connection with the Merger, all classes of the Company's
previous outstanding common stock were converted into 30,669,347 shares of
a single class of Common Stock. Concurrently with the Offering, the Company
entered into a bank credit agreement (the "Credit Agreement") borrowings
from which, along with the proceeds from the Offering, were used to repay
substantially all of the Company's then existing debt (collectively, the
"Refinancing"). The Company also terminated its management consulting
agreement with AEA Investors Inc.
RESULTS OF OPERATIONS
Net sales were $215.7 million for the three months ended March 31, 1998
compared to $197.4 million for the corresponding period in the prior year.
This reflected an increase of 14% in local currency (7% absent the Safeline
Acquisition). Results were negatively impacted by the strengthening of the
U.S. dollar against other currencies. Net sales in U.S. dollars during the
three month period increased 9%.
Net sales in Europe increased 17% in local currencies during the three
months ended March 31, 1998 versus the corresponding period in the prior
year. The Company has continued to experience favorable sales trends in
Europe, which began in the second half of 1997, as a result of the
strengthening of the European economy. Net sales in local currencies during
the three-month period in the Americas increased 16% principally due to
improved market conditions for sales to industrial and food retailing
customers. Net sales in local currencies in the three month period in Asia
and other markets decreased 3%. The Company's business in Asia has
deteriorated in the three months ending March 31, 1998 primarily as a
result of a decline in net sales in Southeast Asia and Korea (which
collectively represented approximately 3% of the Company's total net sales
for 1997). The Company anticipates that market conditions in Asia will
adversely affect sales in 1998 and that margins in that region will be
reduced. The Company believes Asia and other emerging markets will continue
to provide opportunities for growth in the long term based upon the
movement toward international quality standards, the need to upgrade
mechanical scales to electronic versions and the establishment of local
production facilities by the Company's multinational client base.
The operating results for Safeline (which were included in the Company's
results from May 31, 1997) would have had the effect of increasing the
Company's net sales by $11.0 million for the three months ended March 31,
1997. Additionally, Safeline's operating results during the same period
would have increased the Company's Adjusted Operating Income (gross profit
less research and development and selling, general and administrative
expenses before amortization and non-recurring costs) by $2.4 million.
Gross profit as a percentage of net sales increased to 43.9% for the three
months ended March 31, 1998, compared to 42.2% for the corresponding period
in the prior year. The improved gross profit percentage reflects the
benefits of reduced product costs arising from the Company's research and
development efforts and ongoing productivity improvements.
Research and development expenses as a percentage of net sales decreased to
5.0% for the three months ended March 31, 1998, compared to 5.5% for the
corresponding period in the prior year; however, the local currency
spending level remained relatively constant period to period.
Selling, general and administrative expenses as a percentage of net sales
decreased to 30.2% for the three months ended March 31, 1998, compared to
30.5% for the corresponding period in the prior year. This decrease
primarily reflects the benefits of ongoing cost efficiency programs.
Adjusted Operating Income was $18.7 million, or 8.7% of sales, for the
three months ended March 31, 1998 compared to $12.3 million, or 6.2% of
sales, for the three months ended March 31, 1997, an increase of 52.6%.
Interest expense decreased to $5.9 million for the three months ended March
31, 1998, compared to $9.4 million for the corresponding period in the
prior year. The decrease was principally due to benefits received from the
Offering, the Refinancing and cash flow provided by operations.
Other charges, net of $0.5 million for the three months ended March 31,
1998 compared to other charges, net of $3.8 million for the corresponding
period in the prior year. The 1998 amount includes gains on asset sales and
interest income, offset by other charges. The 1997 period includes $4.8
million ($4.0 million after tax) relating to (i) certain derivative
financial instruments acquired in 1996 and closed in 1997 and (ii) foreign
currency exchange losses resulting from certain unhedged bank debt
denominated in foreign currencies (such derivative financial instruments
and such unhedged bank debt are no longer held pursuant to current Company
policy).
The provision for taxes is based upon the Company's projected annual
effective tax rate for the related period. The decrease in the projected
annual effective tax rate from 1997 to 1998 includes a benefit of
approximately 5 percentage points based upon a change in Swiss tax law
which will only benefit the 1998 period.
The net earnings of $6.8 million for the three months ended March 31, 1998
compared to net loss of $1.1 million for the corresponding period of the
prior year.
LIQUIDITY AND CAPITAL RESOURCES
In November 1997, the Company refinanced its previous credit agreement and
purchased all of its 9 3/4% Senior Subordinated Notes due 2006 (the
"Notes") pursuant to a tender offer with proceeds from the Offering and
additional borrowings under the Credit Agreement. The Notes were originally
issued in October 1996 at the time of the Acquisition.
The Credit Agreement provides for term loan borrowings in aggregate
principal amounts of $99.7 million, SFr 83.9 million (approximately $55.9
million at March 31, 1998) and (pound)21.3 million (approximately $35.8
million at March 31, 1998) that are scheduled to mature in 2004, a Canadian
revolver with availability of CDN $26.3 million (approximately CDN $19.5
million of which was drawn as of March 31, 1998) which is scheduled to
mature in 2004, and a multi-currency revolving credit facility with
availability of $400.0 million (approximately $240.0 million of which was
available at March 31, 1998) which is also scheduled to mature in 2004. The
Company had borrowings of $348.3 million under the Credit Agreement and
$25.9 million under various other arrangements as of March 31, 1998. Under
the Credit Agreement, amounts outstanding under the term loans amortize in
quarterly installments. In addition, the Credit Agreement obligates the
Company to make mandatory prepayments in certain circumstances with the
proceeds of asset sales or issuance of capital stock or indebtedness and
with certain excess cash flow. The Credit Agreement imposes certain
restrictions on the Company and its subsidiaries, including restrictions on
the ability to incur indebtedness, make investments, grant liens, sell
financial assets and engage in certain other activities. The Company must
also comply with certain financial covenants. The Credit Agreement is
secured by certain assets of the Company. The Credit Agreement imposes
certain restrictions on the Company's ability to pay dividends to its
shareholders.
At March 31, 1998, approximately $106.7 million of the borrowings under the
Credit Agreement were denominated in U.S. dollars. The balance of the
borrowings under the Credit Agreement and under local working capital
facilities were also denominated in certain of the Company's other
principal trading currencies amounting to approximately $267.5 million at
March 31, 1998. Changes in exchange rates between the currencies in which
the Company generates cash flow and the currencies in which its borrowings
are denominated will affect the Company's liquidity. In addition, because
the Company borrows in a variety of currencies, its debt balances will
fluctuate due to changes in exchange rates. See "Effect of Currency on
Results of Operations" below.
The Company's cash provided by operating activities increased from $8.1
million in the three months ended March 31, 1997 to $12.2 million in the
three months ended March 31, 1998. The increase resulted principally from
improved Adjusted Operating Income and lower interest costs resulting from
the Offering and Refinancing.
At March 31, 1998, consolidated debt, net of cash, was $352.9 million.
The Company continues to explore potential acquisitions to expand its
product portfolio and improve its distribution capabilities. In connection
with any acquisition, the Company may incur additional indebtedness.
The Company currently believes that cash flow from operating activities,
together with borrowings available under the Credit Agreement and local
working capital facilities, will be sufficient to fund currently
anticipated working capital needs and capital spending requirements as well
as debt service requirements for at least several years, but there can be
no assurance that this will be the case.
EFFECT OF CURRENCY ON RESULTS OF OPERATIONS
The Company's operations are conducted by subsidiaries in many countries,
and the results of operations and the financial position of each of those
subsidiaries are reported in the relevant foreign currency and then
translated into U.S. dollars at the applicable foreign exchange rate for
inclusion in the Company's consolidated financial statements. Accordingly,
the results of operations of such subsidiaries as reported in U.S. dollars
can vary as a result of changes in currency exchange rates. Specifically, a
strengthening of the U.S. dollar versus other currencies reduces net sales
and earnings as translated into U.S. dollars, whereas a weakening of the
U.S. dollar has the opposite effect.
Swiss franc-denominated costs represent a much greater percentage of the
Company's total expenses than Swiss franc-denominated sales represent of
total sales. In general, an appreciation of the Swiss franc versus the
Company's other major trading currencies, especially the principal European
currencies, has a negative impact on the Company's results of operations
and a depreciation of the Swiss franc versus the Company's other major
trading currencies, especially the principal European currencies, has a
positive impact on the Company's results of operations. The effect of these
changes generally offsets in part the translation effect on earnings before
interest and taxes of changes in exchange rates between the U.S. dollar and
other currencies described in the preceding paragraph.
CAUTIONARY STATEMENT
This Quarterly Report on Form 10-Q includes forward-looking statements that
reflect the Company's current views with respect to future events and
financial performance, including capital expenditures, planned product
introductions, research and development expenditures, potential future
growth, including potential penetration of developed markets and potential
growth opportunities in emerging markets, potential future acquisitions,
potential cost savings from planned employee reductions and restructuring
programs, estimated proceeds from and timing of asset sales, planned
operational changes and research and development efforts, strategic plans
and future cash sources and requirements. The words "believe", "expect",
"anticipate" and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. The Company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events of otherwise. These
forward-looking statements are subject to a number of risks and
uncertainties, including the risk of substantial indebtedness on operations
and liquidity, risks associated with currency fluctuations, risks
associated with international operations, highly competitive markets and
technological developments, risks relating to downturns or consolidation
affecting the Company's customers, risks relating to future acquisitions,
risks associated with reliance on key management, uncertainties associated
with environmental matters, risks relating to restrictions on payment of
dividends and risks relating to certain anti-takeover provisions, which
could cause actual results to differ materially from historical results or
those anticipated. For a more detailed discussion of these factors, see the
Mettler-Toledo International Inc. Annual Report on Form 10-K for the year
ended December 31, 1997.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
NOT APPLICABLE
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS NOT APPLICABLE
ITEM 2. CHANGES IN SECURITIES NOT APPLICABLE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES NOT APPLICABLE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting will be held on May 18, 1998.
ITEM 5. OTHER INFORMATION NOT APPLICABLE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Mettler-Toledo International Inc. 1997 Amended and
Restated Stock Option Plan
27. Financial Data Schedule - attached
(b) Reports on Form 8-K - None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
Mettler-Toledo International Inc.
Date: May 6, 1998 By:/s/ William P. Donnelly
------------------------------
William P. Donnelly
Vice President, Chief
Financial Officer and
Treasurer