01—Abstract
Summary
Summary of the 10-K filed March 4, 2002. Cited figures are marked; the original filing is the authoritative source.
Mettler-Toledo International Inc. (MTD) reported net sales of $1.148 billiona for fiscal 2001, up from $1.096 billion in 2000, with net sales in local currency increasing 7%.
Net earnings rose to $72.3 millionb ($1.68 diluted EPS) from $70.1 million ($1.66 diluted EPS). Adjusted Operating Income increased 16% to $165.1 million, or 14.4% of net sales, after a $15.2 million restructuring charge tied to headcount reductions and manufacturing transfers. Before that charge, net earnings were $86.9 million, which the filing describes as a 21% increase over the prior year's comparable figure of $71.5 million.
The company describes itself as the world's largest manufacturer of weighing instruments and a leading provider of automated chemistry systems and metal detection equipment. It states that it holds approximately 50%c of the global laboratory balance market and that service revenue accounted for about 21% of 2001 net sales. Sales were 44% Europe, 43% North and South America, and 13% Asia and other countries.
The largest 2001 transaction was the November 2001 acquisition of Rainin Instrument, LLC for $294.2 milliond, paid about half in cash and half in common stock. Total equity rose to $388.2 million and long-term debt to $309.5 million, and net debt was $332.0 million at year-end. The company stated it had never paid dividends on its common stock and does not anticipate paying them.
It also disclosed that Dennis Braun would join as Chief Financial Officer in March 2002, succeeding William P. Donnelly.
02—Key points
Key Highlights
- Net sales of $1.148 billion in 2001, up from $1.095 billion in 2000; local-currency growth of 7%, while U.S. dollar-reported growth was 5%.
- Adjusted Operating Income rose 16% to $165.1 million, or 14.4% of net sales, versus 13.0% in 2000.
- Net earnings of $72.3 million ($1.68 diluted EPS), including a $15.2 million charge primarily for headcount reductions and manufacturing transfers; before the charge, net earnings were $86.9 million.
- Acquired Rainin Instrument, LLC in November 2001 for $294.2 million, adding pipetting solutions for life sciences; the filing estimates Rainin would have added about $65 million in pro forma sales.
- Shareholders' equity more than doubled to $388.2 million, driven by $144.3 million in shares issued for acquisitions and $16.8 million from option exercises.
- Net debt of $332.0 million at December 31, 2001, with the company stating it was in compliance with all covenants; net debt to EBITDA was 1.8 as cited in the filing.
- Cash from operations of $101.6 million in 2001, versus $84.7 million in 2000; the company has never paid dividends on its common stock.
03—Questions
Frequently Asked Questions
What is driving Mettler-Toledo's growth?
The filing attributes growth to its solutions approach, including demand for efficiency, integration of instrument data into management systems, regulatory compliance, and globalization. It cites Asia growing 18% in local currency in 2001, Europe 10%, and the Americas 1%, and it says acquisitions added about 2% to 2001 sales growth.
How profitable is the business and did margins improve?
Gross profit was 46.1% of net sales in 2001 versus 45.2% in 2000. Adjusted Operating Income rose to 14.4% of net sales from 13.0%, which the company attributes to cost-saving initiatives and higher sales levels. Selling, general and administrative expenses fell to 26.1% of sales from 27.1%.
Does the company pay dividends?
No. The filing states that Mettler-Toledo has never paid dividends on its common stock and does not anticipate paying cash dividends in the foreseeable future. The board intends to retain earnings, and the credit agreement restricts dividend payments.
What changes in management or accounting were disclosed?
The company announced that Dennis Braun, a former PricewaterhouseCoopers partner, will join as Chief Financial Officer in March 2002, replacing William P. Donnelly, who will become Head of Packaging Industry. The filing also says the company will adopt SFAS 142 in 2002, which will stop goodwill amortization and est. a $6.5 million annual net earnings benefit.
What are the main debt and liquidity considerations?
At December 31, 2001, the company had $332.8 million borrowed under its credit agreement, including $238.4 million under the revolver, and $162.2 million of remaining availability. Covenants include a fixed charge coverage ratio minimum of 3.25:1, a debt to EBITDA maximum of 4:1, and a minimum net worth of $300 million. The filing notes that a deterioration in performance could result in a covenant breach.
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