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Mettler-Toledo International Inc. Reports Fourth Quarter 2023 Results

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.

 

Contacts

Adam Uhlman

Head of Investor Relations

METTLER TOLEDO

Direct: 614-438-4794

adam.uhlman@mt.com

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