Mettler-Toledo International Inc. (NYSE: MTD) today announced
fourth quarter results for 2023. Provided below are the
highlights:
- Reported sales declined 12% compared with the prior year. In
local currency, sales decreased 13% in the quarter as currency
increased sales growth by 1%.
- Net earnings per diluted share as reported (EPS) were $8.52,
compared with $11.86 in the prior-year period. Adjusted EPS was
$9.40, a decrease of 22% over the prior-year amount of $12.10.
Adjusted EPS is a non-GAAP measure, and a reconciliation to EPS is
included on the last page of the attached schedules.
Fourth Quarter Results
Patrick Kaltenbach, President and Chief Executive Officer,
stated, “Our sales and Adjusted EPS were unfortunately negatively
impacted by the previously disclosed shipping delays from our
external European logistics provider that we expect to largely
recover in Q1 2024. Excluding these delays, our results came in as
we had expected as we continued to face challenging market
conditions in the fourth quarter. Our team executed very well on
our cost control initiatives, and cash flow generation for the
quarter and the year was strong.”
GAAP Results EPS in the quarter was
$8.52, compared with the prior-year amount of $11.86.
Compared with the prior year, total reported sales declined 12%
to $935.0 million, and were impacted by shipping delays of
approximately $58 million with a new external European logistics
service provider. By region, reported sales decreased 6% in the
Americas, decreased 11% in Europe, and decreased 19% in Asia/Rest
of World. Earnings before taxes amounted to $232.6 million,
compared with $325.0 million in the prior year.
Non-GAAP Results Adjusted EPS was
$9.40, a decrease of 22% over the prior-year amount of $12.10.
Compared with the prior year, total sales in local currency
decreased 13% as currency increased sales growth by 1%. By region,
local currency sales declined 7% in the Americas, declined 16% in
Europe, and declined 18% in Asia/Rest of World. Adjusted Operating
Profit amounted to $281.8 million, a 21% decrease from the
prior-year amount of $358.6 million.
Adjusted EPS and Adjusted Operating Profit are non-GAAP
measures. Reconciliations to the most comparable GAAP measures are
provided in the attached schedules.
Full Year Results
GAAP Results EPS was $35.90,
compared with the prior-year amount of $38.41.
Compared with the prior year, total reported sales declined 3%
to $3.788 billion. By region, reported sales were flat in Europe,
decreased 1% in the Americas, and decreased 9% in Asia/Rest of
World. Earnings before taxes amounted to $973.7 million, compared
with $1.071 billion in the prior year.
Non-GAAP Results Adjusted EPS was
$38.03, a decrease of 4% over the prior-year amount of $39.65.
Compared with the prior year, total sales in local currency
decreased 3% as currency was neutral for the year. By region, local
currency sales decreased 1% in the Americas, decreased 2% in
Europe, and decreased 5% in Asia/Rest of World. Adjusted Operating
Profit amounted to $1.152 billion, a 3% decrease from the
prior-year amount of $1.192 billion.
Outlook
The Company stated that forecasting remains difficult.
Management cautions that market conditions are uncertain 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 first quarter of 2024 will
decline approximately 4% to 6%, and Adjusted EPS is forecast to be
$7.35 to $7.75, a decline of 11% to 15%. Included in the first
quarter guidance is an estimated 4% headwind to Adjusted EPS growth
due to adverse currency.
For the full year, management anticipates local currency sales
in 2024 will increase approximately 1% to 2%, and Adjusted EPS is
forecast to be in the range of $39.60 to $40.30, representing
growth of approximately 4% to 6%. Included in the full year
guidance is an estimated 2% headwind to Adjusted EPS growth due to
adverse currency. This compares with previous local currency sales
growth guidance of approximately flat and Adjusted EPS guidance of
$39.10 to $39.80.
The Company does not provide GAAP financial measures on a
forward-looking basis because we are unable to predict with
reasonable certainty and without unreasonable effort the timing and
amount of future restructuring and other non-recurring items.
Conclusion
Kaltenbach concluded, “We are preparing for challenging market
conditions to persist in the first half of 2024, while also
remaining agile to quickly capitalize on growth opportunities and
trends towards automation and digitalization, as well as customer
investments in faster growth segments. Over the past couple years,
we have continued to invest strongly in next-generation products
and solutions and have also enhanced our best-in-class corporate
programs by launching the next waves of Spinnaker and SternDrive.
This will help us further increase our competitiveness and put us
in an even more favorable position, especially once our markets
pick up again.”
Other Matters
The Company will host a conference call to discuss its quarterly
results tomorrow morning (Friday, February 9th) 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
investor.mt.com. 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, ongoing developments related to
Ukraine, and the Israel-Hamas war. 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, ongoing developments related to
Ukraine, and the Israel-Hamas war 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, ongoing developments related to Ukraine, and the
Israel-Hamas war. See in particular “Factors Affecting Our Future
Operating Results” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.”
METTLER-TOLEDO INTERNATIONAL
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(amounts in thousands except
share data)
(unaudited)
Three months ended
Three months ended
December 31, 2023
% of sales
December 31, 2022
% of sales
Net sales
$
934,992
(a)
100.0
$
1,057,685
100.0
Cost of sales
383,354
41.0
425,545
40.2
Gross profit
551,638
59.0
632,140
59.8
Research and development
46,435
5.0
45,942
4.3
Selling, general and administrative
223,427
23.9
227,586
21.5
Amortization
18,078
1.9
16,542
1.6
Interest expense
19,655
2.1
16,805
1.6
Restructuring charges
13,055
1.4
1,753
0.2
Other charges (income), net
(1,568
)
(0.2
)
(1,502
)
(0.1
)
Earnings before taxes
232,556
24.9
325,014
30.7
Provision for taxes
47,761
5.1
59,180
5.6
Net earnings
$
184,795
19.8
$
265,834
25.1
Basic earnings per common share: Net earnings
$
8.56
$
11.97
Weighted average number of common shares
21,593,616
22,209,188
Diluted earnings per common share: Net earnings
$
8.52
$
11.86
Weighted average number of common and common equivalent shares
21,687,577
22,407,796
Note:
(a) Local currency sales
decreased 13% as compared to the same period in 2022.
RECONCILIATION OF EARNINGS
BEFORE TAXES TO ADJUSTED OPERATING PROFIT
Three months ended
Three months ended
December 31, 2023
% of sales
December 31, 2022
% of sales
Earnings before taxes
$
232,556
$
325,014
Amortization
18,078
16,542
Interest expense
19,655
16,805
Restructuring charges
13,055
1,753
Other charges (income), net
(1,568
)
(1,502
)
Adjusted operating profit
$
281,776
(b)
30.1
$
358,612
33.9
Note:
(b) Adjusted operating profit
decreased 21% as compared to the same period in 2022.
METTLER-TOLEDO INTERNATIONAL
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(amounts in thousands except
share data)
(unaudited)
Twelve months ended
Twelve months ended
December 31, 2023
% of sales
December 31, 2022
% of sales
Net sales
$
3,788,309
(a)
100.0
$
3,919,709
100.0
Cost of sales
1,547,023
40.8
1,611,667
41.1
Gross profit
2,241,286
59.2
2,308,042
58.9
Research and development
185,284
4.9
177,122
4.5
Selling, general and administrative
904,106
23.9
938,461
23.9
Amortization
72,213
1.9
66,239
1.7
Interest expense
77,366
2.0
55,392
1.4
Restructuring charges
32,735
0.9
9,556
0.2
Other charges (income), net
(4,146
)
(0.1
)
(9,320
)
(0.1
)
Earnings before taxes
973,728
25.7
1,070,592
27.3
Provision for taxes
184,950
4.9
198,090
5.0
Net earnings
$
788,778
20.8
$
872,502
22.3
Basic earnings per common share: Net earnings
$
36.10
$
38.79
Weighted average number of common shares
21,848,122
22,491,790
Diluted earnings per common share: Net earnings
$
35.90
$
38.41
Weighted average number of common and common equivalent shares
21,971,528
22,718,290
Note:
(a) Local currency sales
decreased 3% as compared to the same period in 2022.
RECONCILIATION OF EARNINGS
BEFORE TAXES TO ADJUSTED OPERATING PROFIT
Twelve months ended
Twelve months ended
December 31, 2023
% of sales
December 31, 2022
% of sales
Earnings before taxes
$
973,728
$
1,070,592
Amortization
72,213
66,239
Interest expense
77,366
55,392
Restructuring charges
32,735
9,556
Other charges (income), net
(4,146
)
(9,320
)
Adjusted operating profit
$
1,151,896
(b)
30.4
$
1,192,459
30.4
Note:
(b) Adjusted operating profit
decreased 3% as compared to the same period in 2022.
METTLER-TOLEDO INTERNATIONAL
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(amounts in thousands)
(unaudited)
December 31, 2023
December 31, 2022
Cash and cash equivalents
$
69,807
$
95,966
Accounts receivable, net
663,893
709,321
Inventories
385,865
441,694
Other current assets and prepaid expenses
110,638
128,108
Total current assets
1,230,203
1,375,089
Property, plant and equipment, net
803,374
778,600
Goodwill and other intangibles assets, net
955,537
966,224
Other non-current assets
366,441
372,482
Total assets
$
3,355,555
$
3,492,395
Short-term borrowings and maturities of long-term debt
$
192,219
$
106,054
Trade accounts payable
210,411
252,538
Accrued and other current liabilities
778,452
789,139
Total current liabilities
1,181,082
1,147,731
Long-term debt
1,888,620
1,908,480
Other non-current liabilities
435,791
411,391
Total liabilities
3,505,493
3,467,602
Shareholders’ equity
(149,938
)
24,793
Total liabilities and shareholders’ equity
$
3,355,555
$
3,492,395
METTLER-TOLEDO INTERNATIONAL
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
Three months ended
Twelve months ended
December 31,
December 31,
2023
2022
2023
2022
Cash flow from operating
activities:
Net earnings
$
184,795
$
265,834
$
788,778
$
872,502
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation
12,545
11,783
48,951
46,784
Amortization
18,078
16,542
72,213
66,239
Deferred tax benefit
(8,918
)
31,398
(13,373
)
26,517
Share-based compensation
5,478
5,730
17,928
19,661
Increase (decrease) in cash resulting from
changes in operating assets and liabilities
69,528
(27,644
)
51,377
(172,636
)
Net cash provided by operating
activities
281,506
303,643
965,874
859,067
Cash flows from investing
activities:
Proceeds from sale of property,
plant and equipment
167
163
835
399
Purchase of property, plant and
equipment
(32,416
)
(32,028
)
(105,323
)
(121,241
)
Proceeds from government funding
(a)
3,498
1,000
6,094
29,670
Acquisitions
(5,198
)
(12,363
)
(5,811
)
(37,951
)
Other investing activities
(1,552
)
(6,809
)
(27,489
)
(10,272
)
Net cash used in investing
activities
(35,501
)
(50,037
)
(131,694
)
(139,395
)
Cash flows from financing
activities:
Proceeds from borrowings
556,824
786,195
2,126,797
2,307,256
Repayments of borrowings
(629,795
)
(810,354
)
(2,097,023
)
(1,947,398
)
Proceeds from exercise of stock
options
-
13,756
19,234
33,216
Repurchases of common stock
(176,002
)
(274,999
)
(900,000
)
(1,099,998
)
Acquisition contingent
consideration payment
-
-
(7,767
)
(7,912
)
Other financing activities
-
(31
)
(826
)
(1,203
)
Net cash used in financing
activities
(248,973
)
(285,433
)
(859,585
)
(716,039
)
Effect of exchange rate changes
on cash and cash equivalents
3,100
5,657
(754
)
(6,231
)
Net increase (decrease) in cash
and cash equivalents
132
(26,170
)
(26,159
)
(2,598
)
Cash and cash equivalents:
Beginning of period
69,675
122,136
95,966
98,564
End of period
$
69,807
$
95,966
$
69,807
$
95,966
RECONCILIATION OF NET CASH
PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
Net cash provided by operating
activities
$
281,506
$
303,643
$
965,874
$
859,067
Payments in respect of
restructuring activities
10,877
1,449
25,818
7,965
Proceeds from sale of property,
plant and equipment
167
164
835
399
Purchase of property, plant and
equipment, net (a)
(32,416
)
(32,474
)
(97,593
)
(93,131
)
Acquisition payments (b)
-
72
4,775
2,678
Transition tax payment
-
-
8,042
4,289
Adjusted free cash flow
$
260,134
$
272,854
$
907,751
$
781,267
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 has received funding of $35.8 million, which
offset capital expenditures. Funding proceeds of $3.5 million and
$1.0 million during the three months ended December 31, 2023 and
2022, respectively and the related purchase of property, plant and
equipment of $3.7 million for the three months ended December 31,
2022, are excluded from Adjusted free cash flow. Funding proceeds
of $6.1 million and $29.7 million during the twelve months ended
December 31, 2023 and 2022, respectively and the related purchase
of property, plant and equipment of $7.7 million and $28.1 million
for the twelve months ended December 31, 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 twelve months
ended December 31, 2023 and 2022, respectively.
METTLER-TOLEDO
INTERNATIONAL INC. OTHER OPERATING STATISTICS
SALES GROWTH BY DESTINATION (unaudited)
Americas Europe Asia/RoW Total U.S. Dollar Sales Growth
Three Months Ended December 31, 2023
(6
%)
(11
%)
(19
%)
(12
%)
Twelve Months Ended December 31, 2023
(1
%)
-
%
(9
%)
(3
%)
Local Currency Sales Growth Three Months Ended December 31,
2023
(7
%)
(16
%)
(18
%)
(13
%)
Twelve Months Ended December 31, 2023
(1
%)
(2
%)
(5
%)
(3
%)
RECONCILIATION OF DILUTED EPS
AS REPORTED TO ADJUSTED DILUTED EPS
(unaudited)
Three months ended
Twelve months ended
December 31,
December 31,
2023
2022
% Growth
2023
2022
% Growth
EPS as reported, diluted
$
8.52
$
11.86
-28
%
$
35.90
$
38.41
-7
%
Purchased intangible amortization, net of tax
0.23
(a)
0.21
(a)
0.93
(a)
0.87
(a) Restructuring charges, net of tax
0.49
(b)
0.06
(b)
1.20
(b)
0.34
(b) Acquisition costs, net of tax
-
(c)
0.01
(c)
-
(c)
0.03
(c) Income tax expense
0.16
(d)
(0.04
)
(d)
-
-
Adjusted EPS, diluted
$
9.40
$
12.10
-22
%
$
38.03
$
39.65
-4
%
Notes: (a) Represents the EPS impact of purchased intangibles
amortization of $6.5 million ($5.0 million net of tax) and $6.1
million ($4.7 million net of tax) for the three months ended
December 31, 2023 and 2022, and of $26.4 million ($20.5 million net
of tax) and $25.5 million ($19.8 million net of tax) for the twelve
months ended December 31, 2023 and 2022, respectively. (b)
Represents the EPS impact of restructuring charges of $13.1 million
($10.6 million after tax) and $1.8 million ($1.4 million after tax)
for the three months ended December 31, 2023 and 2022, and of $32.7
million ($26.5 million after tax) and $9.6 million ($7.8 million
after tax) for the twelve months ended December 31, 2023 and 2022,
respectively, which primarily include employee related costs.
(c) Represents the EPS impact of acquisition transaction
costs of $0.2 million ($0.2 million after tax) for the three months
ended December 31, 2022 and of $0.9 million ($0.7 million after
tax) for the twelve months ended December 31, 2022. (d)
Represents the EPS impact of the difference between our reported
and annual tax rate before non-recurring discrete items due to the
timing of excess tax benefits associated with stock option
exercises. Also includes a $0.16 EPS benefit for the three months
ended December 31, 2022 for the reduction in our annualized
effective tax rate to 18.5% for the first three quarters of 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240208516595/en/
Adam Uhlman Head of Investor Relations METTLER TOLEDO Direct:
614-438-4794 adam.uhlman@mt.com
Mettler Toledo (NYSE:MTD)
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