Mettler-Toledo International Inc. Reports Fourth Quarter 2022 Results

Mettler-Toledo International Inc. (NYSE: MTD) today announced fourth quarter results for 2022. Provided below are the highlights:

  • Reported sales increased 2% compared with the prior year. In local currency, sales increased 9% in the quarter as currency reduced sales growth by 7%.
  • Net earnings per diluted share as reported (EPS) were $11.86, compared with $9.94 in the prior-year period. Adjusted EPS was $12.10, an increase of 15% over the prior-year amount of $10.53. 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, “We finished the year with excellent sales growth in the fourth quarter, and benefited from very good broad-based growth across geographic regions and product categories. We were particularly pleased with the strong execution from our team as we capitalized on our sophisticated sales and marketing programs and innovative product portfolio. Strong sales growth, combined with benefits from our margin initiatives and good cost control, contributed to excellent growth in Adjusted Operating Profit and Adjusted EPS, offsetting very significant currency headwinds.”

GAAP Results

EPS in the quarter was $11.86, compared with the prior-year amount of $9.94.

Compared with the prior year, total reported sales increased 2% to $1.058 billion. By region, reported sales increased 8% in the Americas, decreased 3% in Europe and decreased 1% in Asia/Rest of World. Earnings before taxes amounted to $325.0 million, compared with $286.0 million in the prior year.

Non-GAAP Results

Adjusted EPS was $12.10, an increase of 15% over the prior-year amount of $10.53.

Compared with the prior year, total sales in local currency increased 9% as currency reduced sales growth by 7%. By region, local currency sales increased 8% in the Americas, 9% in Europe and 9% in Asia/Rest of World. Adjusted Operating Profit amounted to $358.6 million, a 12% increase from the prior-year amount of $319.1 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 $38.41, compared with the prior-year amount of $32.78.

Compared with the prior year, total reported sales increased 5% to $3.920 billion. By region, reported sales increased 11% in the Americas, decreased 5% in Europe and increased 7% in Asia/Rest of World. Earnings before taxes amounted to $1.071 billion, compared with $949.4 million in the prior year.

Non-GAAP Results

Adjusted EPS was $39.65, an increase of 17% over the prior-year amount of $34.01.

Compared with the prior year, total sales in local currency increased 11% as currency reduced sales growth by 6%. By region, local currency sales increased 12% in the Americas, 6% in Europe and 13% in Asia/Rest of World. Adjusted Operating Profit amounted to $1.192 billion, a 13% increase from the prior-year amount of $1.058 billion.

Adjusted EPS and Adjusted Operating Profit are non-GAAP measures. Reconciliations to the most comparable GAAP measures are provided in the attached schedules.

Outlook

The Company stated that forecasting remains challenging. Management cautions that market conditions are dynamic and changes to the business environment can occur quickly. There is uncertainty in the economic environment today, including the risk of recession in some countries, and management acknowledges that market conditions are subject to change. Based on today's assessment of market conditions, management anticipates local currency sales growth for the first quarter of 2023 will be approximately 6%, and Adjusted EPS is forecast to be $8.55 to $8.65, a growth rate of 9% to 10%. Included in the first quarter guidance is an estimated 6% headwind to Adjusted EPS growth due to adverse currency.

For the full year, management anticipates local currency sales growth in 2023 will be approximately 5%, and Adjusted EPS is forecast to be in the range of $43.55 to $43.95, representing growth of approximately 10% to 11%. This compares with previous local currency sales growth guidance of approximately 5% and Adjusted EPS guidance of $42.00 to $42.40. Included in the 2023 guidance is an estimated 1% headwind to Adjusted EPS growth due to adverse currency.

While the Company has provided an outlook for local currency sales growth and Adjusted EPS, it has not provided an outlook for reported sales growth or EPS as it would require an estimate of currency exchange fluctuations and non-recurring items, which are not yet known.

Conclusion

Kaltenbach concluded, “I am very proud of the agility and execution our team demonstrated in 2022 as we faced unexpected challenges like the war in Ukraine, lockdowns in China, and significant supply chain and inflationary pressures. As we look ahead to this year, we expect continued uncertainty regarding the global economy and face challenging multi-year sales growth comparisons. I am confident that the diligent execution of our growth and productivity initiatives will again position us very well to gain market share and deliver solid financial results.”

Other Matters

The Company will host a conference call to discuss its quarterly results tomorrow (Friday, February 10) at 8:30 a.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/investors. The presentation referenced in 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 and long-term impacts of the COVID-19 pandemic and recent developments in Ukraine. In some cases, 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, customer demand, our competitive position, pricing, our supply chain, adequacy of our facilities, access to and the costs of raw materials, shipping and supplier costs, gross margins, planned research and development efforts and product introductions, capital expenditures, cash flow, tax-related matters, the impact of foreign currencies, compliance with laws, effects of acquisitions, and the impact of the COVID-19 pandemic and recent developments in Ukraine on our businesses. 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 the uncertain duration and severity of the COVID-19 pandemic and recent developments in Ukraine. See in particular “Factors Affecting Our Future Operating Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021 and other reports filed with the SEC from time to time.

METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share data)
(unaudited)
 

Three months ended

 

 

 

Three months ended

 

 

December 31, 2022

 

% of sales

 

December 31, 2021

 

% of sales

 
Net sales

$1,057,685

(a)

100.0

$1,037,239

100.0

Cost of sales

425,545

40.2

430,106

41.5

Gross profit

632,140

59.8

607,133

58.5

 
Research and development

45,942

4.3

45,615

4.4

Selling, general and administrative

227,586

21.5

242,445

23.4

Amortization

16,542

1.6

16,934

1.6

Interest expense

16,805

1.6

11,541

1.1

Restructuring charges

1,753

0.2

2,520

0.2

Other charges (income), net

(1,502)

(0.1)

2,102

0.2

Earnings before taxes

325,014

30.7

285,976

27.6

 
Provision for taxes

59,180

5.6

55,105

5.3

Net earnings

$265,834

25.1

$230,871

22.3

 
Basic earnings per common share:
Net earnings

$11.97

$10.08

Weighted average number of common shares

22,209,188

22,912,071

 
Diluted earnings per common share:
Net earnings

$11.86

$9.94

Weighted average number of common

22,407,796

23,220,331

and common equivalent shares
 
Note:

(a) Local currency sales increased 9% as compared to the same period in 2021.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT
 

Three months ended

 

 

 

Three months ended

 

 

December 31, 2022

 

% of sales

 

December 31, 2021

 

% of sales

 
Earnings before taxes

$325,014

$285,976

Amortization

16,542

16,934

Interest expense

16,805

11,541

Restructuring charges

1,753

2,520

Other charges (income), net

(1,502)

2,102

Adjusted operating profit

$358,612

(b)

33.9

$319,073

30.8

 
Note:

(b) Adjusted operating profit increased 12% as compared to the same period in 2021.

METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share data)
(unaudited)
 

Twelve months ended

 

 

 

Twelve months ended

 

 

December 31, 2022

 

% of sales

 

December 31, 2021

 

% of sales

 
Net sales

$3,919,709

(a)

100.0

$3,717,930

100.0

Cost of sales

1,611,667

41.1

1,546,377

41.6

Gross profit

2,308,042

58.9

2,171,553

58.4

 
Research and development

177,122

4.5

169,766

4.6

Selling, general and administrative

938,461

23.9

943,976

25.4

Amortization

66,239

1.7

63,075

1.7

Interest expense

55,392

1.4

43,242

1.2

Restructuring charges

9,556

0.2

5,239

0.1

Other charges (income), net

(9,320)

(0.1)

(3,106)

(0.1)

Earnings before taxes

1,070,592

27.3

949,361

25.5

 
Provision for taxes

198,090

5.0

180,376

4.8

Net earnings

$872,502

22.3

$768,985

20.7

 
Basic earnings per common share:
Net earnings

$38.79

$33.25

Weighted average number of common shares

22,491,790

23,129,862

 
Diluted earnings per common share:
Net earnings

$38.41

$32.78

Weighted average number of common

22,718,290

23,457,630

and common equivalent shares
 

Note:

(a) Local currency sales increased 11% as compared to the same period in 2021.

RECONCILIATION OF EARNINGS BEFORE TAXES TO ADJUSTED OPERATING PROFIT

 

 

Twelve months ended Twelve months ended
December 31, 2022 % of sales December 31, 2021 % of sales
 
Earnings before taxes

$1,070,592

$949,361

Amortization

66,239

63,075

Interest expense

55,392

43,242

Restructuring charges

9,556

5,239

Other charges (income), net

(9,320)

(3,106)

Adjusted operating profit

$1,192,459

(b)

30.4

$1,057,811

28.5

 

Note:

(b) Adjusted operating profit increased 13% as compared to the same period in 2021.

METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
 
 
December 31, 2022 December 31, 2021
 
Cash and cash equivalents

$95,966

$98,564

Accounts receivable, net

709,321

647,335

Inventories

441,694

414,543

Other current assets and prepaid expenses

128,108

108,916

Total current assets

1,375,089

1,269,358

 
Property, plant and equipment, net

778,600

799,365

Goodwill and other intangibles assets, net

966,224

956,072

Other non-current assets

372,482

302,003

Total assets

$3,492,395

$3,326,798

 
Short-term borrowings and maturities of long-term debt

$106,054

$101,134

Trade accounts payable

252,538

272,911

Accrued and other current liabilities

789,139

772,493

Total current liabilities

1,147,731

1,146,538

 
Long-term debt

1,908,480

1,580,808

Other non-current liabilities

411,391

428,031

Total liabilities

3,467,602

3,155,377

 
Shareholders’ equity

24,793

171,421

Total liabilities and shareholders’ equity

$3,492,395

$3,326,798

METTLER-TOLEDO INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)

Three months ended

 

Twelve months ended

December 31,

 

December 31,

2022

 

2021

 

2022

 

2021

 
Cash flow from operating activities:
Net earnings

$265,834

$230,871

$872,502

$768,985

Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation

11,783

11,542

46,784

44,982

Amortization

16,542

16,934

66,239

63,075

Deferred tax benefit

31,398

6,635

26,517

563

Share-based compensation

5,730

5,702

19,661

19,595

Increase in acquisition contingent consideration

-

6,849

-

6,849

Other

-

381

-

381

Increase (decrease) in cash resulting from changes in
operating assets and liabilities

(27,644)

(37,808)

(172,636)

4,395

Net cash provided by operating activities

303,643

241,106

859,067

908,825

 
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment

163

253

399

3,652

Purchase of property, plant and equipment

(32,028)

(37,784)

(121,241)

(107,580)

Proceeds from government funding (a)

1,000

-

29,670

-

Acquisitions

(12,363)

(27,475)

(37,951)

(220,862)

Other investing activities

(6,809)

2,123

(10,272)

10,682

Net cash used in investing activities

(50,037)

(62,883)

(139,395)

(314,108)

Cash flows from financing activities:
Proceeds from borrowings

786,195

789,198

2,307,256

2,427,519

Repayments of borrowings

(810,354)

(786,369)

(1,947,398)

(2,035,546)

Proceeds from exercise of stock options

13,756

5,549

33,216

20,463

Repurchases of common stock

(274,999)

(272,500)

(1,099,998)

(999,998)

Acquisition contingent consideration payment

-

-

(7,912)

-

Other financing activities

(31)

(123)

(1,203)

(2,987)

Net cash used in financing activities

(285,433)

(264,245)

(716,039)

(590,549)

 
Effect of exchange rate changes on cash and cash equivalents

5,657

914

(6,231)

142

 
Net increase (decrease) in cash and cash equivalents

(26,170)

(85,108)

(2,598)

4,310

 
Cash and cash equivalents:
Beginning of period

122,136

183,672

98,564

94,254

End of period

$95,966

$98,564

$95,966

$98,564

 
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
 
Net cash provided by operating activities

$303,643

$241,106

$859,067

$908,825

Payments in respect of restructuring activities

1,449

2,607

7,965

10,029

Proceeds from sale of property, plant and equipment

164

253

399

3,652

Purchase of property, plant and equipment, net (a)

(32,474)

(37,784)

(93,131)

(107,580)

Acquisition payments (b)

72

462

2,678

2,706

Transition tax payment

-

-

4,289

4,288

Adjusted free cash flow

$272,854

$206,644

$781,267

$821,920

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 will receive total funding of $35.8 million which will offset capital expenditures. For the three and twelve months ended December 31, 2022, funding proceeds of $1.0 million and $29.7 million, respectively, and related purchases of property, plant and equipment of $1.8 million and $28.1 million, respectively, are excluded from Adjusted free cash flow for the respective periods.

 

 

(b)

Includes $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, 2022.

METTLER-TOLEDO INTERNATIONAL INC.
OTHER OPERATING STATISTICS
 
 
SALES GROWTH BY DESTINATION
(unaudited)
 

Europe

 

Americas

 

Asia/RoW

Total

 

 

 

 

 

 

 

U.S. Dollar Sales Growth

 

 

 

 

 

 

 

Three Months Ended December 31, 2022

(3%)

 

8%

 

(1%)

 

2%

Twelve Months Ended December 31, 2022

(5%)

 

11%

 

7%

 

5%

 

 

 

 

 

 

 

Local Currency Sales Growth

 

 

 

 

 

 

 

Three Months Ended December 31, 2022

9%

 

8%

 

9%

 

9%

Twelve Months Ended December 31, 2022

6%

 

12%

 

13%

 

11%

 
 

RECONCILIATION OF DILUTED EPS AS REPORTED TO ADJUSTED DILUTED EPS

(unaudited)

 

Three months ended

 

Twelve months ended

December 31,

 

December 31,

2022

 

2021

 

% Growth

 

2022

 

2021

 

% Growth

 
EPS as reported, diluted

$11.86

 

$9.94

 

19

%

$38.41

 

$32.78

 

17

%

 
Purchased intangible amortization, net of tax

0.21

 

(a)

0.21

 

(a)

0.87

 

(a)

0.70

 

(a)

Restructuring charges, net of tax

0.06

 

(b)

0.09

 

(b)

0.34

 

(b)

0.18

 

(b)

Acquisition costs, net of tax

0.01

 

(c)

0.26

 

(c)

0.03

(c)

0.35

(c)

Income tax expense

(0.04

)

(d)

0.03

(d)

-

 

-

 

 
Adjusted EPS, diluted

$12.10

 

$10.53

 

15

%

$39.65

 

$34.01

 

17

%

Notes:

(a)

Represents the EPS impact of purchased intangibles amortization of $6.1 million ($4.7 million net of tax) and $6.3 million ($4.8 million net of tax) for the three months ended December 31, 2022 and 2021, and of $25.5 million ($19.8 million net of tax) and $21.6 million ($16.3 million after tax) for the twelve months ended December 31, 2022 and 2021, respectively.
 

(b)

Represents the EPS impact of restructuring charges of $1.8 million ($1.4 million after tax) and $2.5 million ($2.0 million after tax) for the three months ended December 31, 2022 and 2021, and of $9.6 million ($7.8 million after tax) and $5.2 million ($4.2 million after tax) for the twelve months ended December 31, 2022 and 2021, respectively, which primarily include employee related costs.
 

(c)

Represents the EPS impact of a $6.8 million charge ($5.5 million after tax) to increase the PendoTECH acquisition contingent consideration and related obligations for the three and twelve months ended December 31, 2021. Also includes acquisition transaction costs of $0.2 million ($0.2 million after tax) and $0.6 million ($0.4 million after tax) for the three months ended December 31, 2022 and 2021, respectively, and of $0.9 million ($0.7 million after tax) and $3.4 million ($2.7 million after tax) for the twelve months ended December 31, 2022 and 2021, respectively.
 

(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, and a $0.14 EPS benefit for the three months ended December 31, 2021 for the reduction in our annualized effective tax rate to 19.0% for the first three quarters of 2021.

 

Contacts

Adam Uhlman

Head of Investor Relations

METTLER TOLEDO

Direct: 614-438-4794

adam.uhlman@mt.com

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