Mettler-Toledo International Inc. Reports Fourth Quarter 2023 Results

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The reported decline in sales and adjusted EPS by Mettler-Toledo International Inc. reflects a significant downturn in the company's performance. A 12% decrease in reported sales and a 22% decrease in adjusted EPS year-over-year are key indicators of the company's financial health and operational challenges. The shipping delays from their European logistics provider, although expected to recover in Q1 2024, have contributed to this downturn and signal potential vulnerabilities in the company's supply chain management.

From a financial perspective, the regional breakdown showing decreased sales across all regions with Asia/Rest of World being the most affected suggests a broad market contraction or loss of competitive edge. The strong cash flow generation despite these declines may provide some cushion, but investors may be concerned about the company's ability to navigate through economic headwinds, including the risk of recession in many countries as noted by management.

The company's cautious outlook for Q1 2024, with an anticipated decline in local currency sales and adjusted EPS, further compounds investor concerns. However, the projected increase in local currency sales for the full year 2024 indicates management's confidence in a potential market recovery or successful implementation of strategic initiatives.

The report highlights a challenging market environment for precision instruments and services, with Mettler-Toledo facing a notable decline in sales across all regions. This may reflect not only company-specific issues but also broader industry trends such as decreased demand in key sectors like life sciences, food and chemicals. The company's mention of trends towards automation and digitalization suggests that adapting to technological advancements is critical for maintaining competitiveness in this sector.

Investors should note the company's strategic focus on next-generation products and solutions and corporate programs like Spinnaker and SternDrive, which may position Mettler-Toledo favorably for future growth. However, the effectiveness of these initiatives in driving sales and profitability in a challenging economic climate will be a key area to monitor.

The forecasted decline in sales and adjusted EPS for the first quarter of 2024, along with the mention of an adverse currency headwind, suggests that Mettler-Toledo is not immune to macroeconomic factors such as currency fluctuations and potential recessions. The estimated 4% to 6% decline in local currency sales for Q1 2024 and the 2% headwind to adjusted EPS growth due to adverse currency for the full year underscore the importance of exchange rate movements on multinational corporations' financial results.

The company's assessment of the economic environment and caution about the risk of recession in many countries align with current global economic uncertainties. The ability of Mettler-Toledo to navigate these conditions, particularly in regions where sales have significantly decreased, will be critical for its financial stability and growth prospects.

02/08/2024 - 05:00 PM

COLUMBUS, Ohio--(BUSINESS WIRE)-- 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 9^th) 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

Source: Mettler-Toledo International Inc.

FAQ

What is the ticker symbol for Mettler-Toledo International Inc.?

The ticker symbol for Mettler-Toledo International Inc. is MTD.

What was the reported sales decline in the fourth quarter of 2023?

Reported sales declined 12% compared with the prior year.

What was the net earnings per diluted share in the fourth quarter of 2023?

Net earnings per diluted share were $8.52, compared with $11.86 in the prior-year period.

What is the forecast for local currency sales for the first quarter of 2024?

Management anticipates local currency sales for the first quarter of 2024 will decline approximately 4% to 6%.

What is the forecast for Adjusted EPS for the first quarter of 2024?

Adjusted EPS is forecast to be $7.35 to $7.75, a decline of 11% to 15%.

Mettler-Toledo International Inc. Reports Fourth Quarter 2023 Results

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What is the ticker symbol for Mettler-Toledo International Inc.?

What was the reported sales decline in the fourth quarter of 2023?

What was the net earnings per diluted share in the fourth quarter of 2023?

What is the forecast for local currency sales for the first quarter of 2024?

What is the forecast for Adjusted EPS for the first quarter of 2024?

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Mettler-Toledo International Inc. Reports Fourth Quarter 2023 Results

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What is the ticker symbol for Mettler-Toledo International Inc.?

What was the reported sales decline in the fourth quarter of 2023?

What was the net earnings per diluted share in the fourth quarter of 2023?

What is the forecast for local currency sales for the first quarter of 2024?

What is the forecast for Adjusted EPS for the first quarter of 2024?

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