01—Abstract
Summary
Summary of the 10-K filed March 13, 1998. Cited figures are marked; the original filing is the authoritative source.
Mettler-Toledo International Inc. filed its annual report on Form 10-K for fiscal 1997, shortly after its November 1997 initial public offering on the New York Stock Exchange under the symbol MTD.
The Company describes itself as the world's largest manufacturer and marketer of weighing instruments for laboratory, industrial and food retailing applications, and reports 1997 net sales of $878.4 milliona, derived 45% from Europe, 42% from North and South America and 13% from Asia and other markets. Adjusted Operating Income was $81.5 million, or 9.3% of net sales, compared with $63.1 million, or 7.1% of net sales, in pro forma 1996. The company acquired Safeline Limited in May 1997 for approximately $100.0 million plus contingent amounts, which added $28.5 million to 1997 net sales.
Reported 1997 results show a net loss of $65.1 millionb, or $2.06 per share, after a $41.2 million extraordinary charge tied to the refinancing and a $30.0 million purchased research and development charge from the Safeline acquisition. Before non-recurring items, net earnings were $19.1 million. Long-term third-party debt was $340.3 million at year end, and consolidated debt net of cash was $373.2 million.
Operating cash flow was $55.6 millionc in 1997. The Company has never paid dividends and its Credit Agreement restricts dividend payments.
The filing also notes a $20.4 milliond IRS proposed adjustment on intercompany interest deductions, which the Company says is indemnified by Ciba, and an environmental remediation matter at its Landing, New Jersey facility that management does not expect to be material. Management also flagged slowing growth in Southeast Asia and Korea, expected to slow Asian sales growth in 1998 with reduced margins.
02—Key points
Key Highlights
- 1997 net sales of $878.4 million, with 45% from Europe, 42% from North and South America and 13% from Asia and other markets
- Adjusted Operating Income of $81.5 million, or 9.3% of net sales, versus $63.1 million, or 7.1% of net sales, in pro forma 1996
- Net loss of $65.1 million ($2.06 per share) for 1997, including a $41.2 million extraordinary charge and $30.0 million of purchased research and development from the Safeline acquisition
- Net earnings before non-recurring items of $19.1 million in 1997
- Initial public offering in November 1997 at $14.00 per share, 7,666,667 shares sold, net proceeds of approximately $97.3 million used to refinance debt
- Long-term third-party debt of $340.3 million and consolidated debt net of cash of $373.2 million at December 31, 1997
- Operating cash flow of $55.6 million in 1997; the Company has never paid dividends and its Credit Agreement restricts payments
03—Questions
Frequently Asked Questions
What does Mettler-Toledo sell and where does it sell it?
The Company manufactures weighing instruments for laboratory, industrial and food retailing applications and holds top-three positions in several analytical instruments such as titrators, thermal analysis systems and pH meters. Following the Safeline acquisition it is also the largest maker of metal detection systems. Its laboratory products are sold in more than 100 countries, and its industrial products are sold in more than 100 countries and its food retailing products in 20.
Why was the 1997 net loss reported when operating results improved?
The net loss of $65.1 million included a $41.2 million extraordinary charge for debt extinguishments, a $30.0 million charge for purchased research and development from the Safeline acquisition, and other non-recurring items. The filing states that net earnings before non-recurring items were $19.1 million.
What risks did the Company identify for its Asian business?
The filing says growth in Southeast Asia and Korea, which together represent approximately 3% of 1997 net sales, has slowed. The Company anticipates that overall net sales growth in Asia will slow in 1998 and that margins will be reduced.
What is the status of the IRS matter and environmental exposure?
The Company received a Notice of Proposed Adjustment disallowing $20.4 million of intercompany interest deductions from 1994 and 1995. It is indemnified by Ciba under the acquisition agreement and intends to assist Ciba in contesting it. The Company also faces remediation litigation at its Landing, New Jersey facility, which it believes will not have a material adverse effect.
04—Continue