How did Mettler-Toledo perform financially in 2006?

Net sales rose to $1,594.9 million from $1,482.5 million, and net earnings increased to $157.5 million from $108.9 million. Diluted EPS was $3.86, compared with $2.52 in 2005. The filing attributes the improvement to sales volume leveraging fixed production costs, cost rationalization and a lower tax rate.

What are the company's main business segments and where does it sell?

The company reports five segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other. In 2006, 42% of sales came from Europe, 40% from North and South America and 18% from Asia and other countries.

Does Mettler-Toledo pay dividends, and how is it returning capital to shareholders?

The filing states the company has historically not paid dividends but will evaluate that policy periodically. Capital is returned through share repurchases: $265.9 million was spent on 4,141,559 shares in 2006, and $365.7 million remained authorized under the $900 million program through December 31, 2008.

What risks does the filing highlight?

Key risks include international operations and emerging markets, intense competition, currency fluctuations (particularly the Swiss franc), reliance on the pharmaceutical, food and chemicals industries' capital spending, acquisition integration, intellectual property, environmental regulation, goodwill impairment and debt covenants. The filing notes $432.9 million of goodwill and $102.8 million of other intangible assets at year-end 2006.

MTD 10-K FY2006 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed February 16, 2007. Cited figures are marked; the original filing is the authoritative source.

Mettler-Toledo International Inc. (MTD) reported net sales of $1,594.9 million^a for 2006, up from $1,482.5 million in 2005, with net earnings rising to $157.5 million from $108.9 million.

Diluted earnings per share were $3.86^b, compared with $2.52 in 2005. The filing states that net sales increased 8% in U.S. dollars and 7% in local currencies, and gross profit as a percentage of net sales improved to 49.6% from 49.3%. The company's 2005 results included a one-time $21.8 million litigation charge, and 2006 results included $8.2 million of share-based compensation expense and $8.0 million of net discrete tax benefits.

The company describes itself as a leading global supplier of precision instruments and services, with five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other. Sales were 42% from Europe, 40% from North and South America and 18% from Asia and other countries. Chinese Operations' segment net sales rose 15% in U.S. dollars to $201.4 million^c, and service represented about 23% of total net sales.

Cash provided by operating activities was $191.6 million^d, and the company spent $265.9 million repurchasing 4,141,559 shares during 2006. Balance sheet highlights at December 31, 2006 include cash of $151.3 million, total debt of $355.7 million, long-term debt of $345.7 million and shareholders' equity of $630.9 million.

The company has historically not paid dividends, and $365.7 million remained authorized under its $900 million share repurchase program. Management reported that its internal control over financial reporting was effective as of December 31, 2006.

02—Key points

Key Highlights

Net sales of $1,594.9 million in 2006, up from $1,482.5 million in 2005, with growth of 8% in U.S. dollars and 7% in local currencies.
Net earnings of $157.5 million in 2006 versus $108.9 million in 2005; diluted EPS of $3.86 versus $2.52.
Gross profit margin of 49.6% in 2006 versus 49.3% in 2005, with operating benefits from volume leverage, cost initiatives and pricing.
2006 results included $8.2 million of share-based compensation expense and $8.0 million of net discrete tax benefits; 2005 included a $21.8 million one-time litigation charge.
Cash from operations of $191.6 million in 2006; $265.9 million spent repurchasing shares, with $365.7 million remaining under the $900 million authorization.
Total debt of $355.7 million at year-end 2006 against cash of $151.3 million; the $450 million credit agreement had about $253.9 million available.
Chinese Operations net sales grew 15% in U.S. dollars to $201.4 million, and the company states it is shifting more manufacturing to China.

03—Questions

Frequently Asked Questions

How did Mettler-Toledo perform financially in 2006?
Net sales rose to $1,594.9 million from $1,482.5 million, and net earnings increased to $157.5 million from $108.9 million. Diluted EPS was $3.86, compared with $2.52 in 2005. The filing attributes the improvement to sales volume leveraging fixed production costs, cost rationalization and a lower tax rate.
What are the company's main business segments and where does it sell?
The company reports five segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other. In 2006, 42% of sales came from Europe, 40% from North and South America and 18% from Asia and other countries.
Does Mettler-Toledo pay dividends, and how is it returning capital to shareholders?
The filing states the company has historically not paid dividends but will evaluate that policy periodically. Capital is returned through share repurchases: $265.9 million was spent on 4,141,559 shares in 2006, and $365.7 million remained authorized under the $900 million program through December 31, 2008.
What risks does the filing highlight?
Key risks include international operations and emerging markets, intense competition, currency fluctuations (particularly the Swiss franc), reliance on the pharmaceutical, food and chemicals industries' capital spending, acquisition integration, intellectual property, environmental regulation, goodwill impairment and debt covenants. The filing notes $432.9 million of goodwill and $102.8 million of other intangible assets at year-end 2006.

04—Continue

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